Title
Intergovernmental Agreement with City of Flagstaff to Accept and Process Recyclable Materials (Ordinance S-49770)
Description
Request to authorize the City Manager, or his designee, to enter into an Intergovernmental Agreement (IGA) with the City of Flagstaff to accept and process recyclable materials collected in the City of Flagstaff and delivered to the City of Phoenix's Material Recovery Facilities (MRF). Further request to authorize the City Council to grant an exception pursuant to Phoenix City Code section 42-20(B), inclusion of mutual indemnification language that otherwise would be prohibited by Phoenix City Code section 42-18(A) and (B). Additionally request to authorize the City Treasurer to accept, and for the City Controller to disburse, all funds related to this item.
Report
Summary
The City of Flagstaff has requested to enter into an Intergovernmental Agreement with the City of Phoenix to accept and process its recyclable material. The City of Phoenix can accept these materials with terms to address changing market conditions resulting in lower commodity prices and increased processing costs from contamination in the recyclables. This IGA will authorize the City of Phoenix to charge a processing fee to the City of Flagstaff for recycling tonnage processed at the City MRFs, which is designed to ensure all costs associated with processing recyclables are recovered by the fee. The terms of this IGA include:
- In a market with low recycling commodity prices, the City of Phoenix will charge a processing fee to the City of Flagstaff, and no revenue share to Flagstaff will be available.
- In a market with high recycling commodity prices, the City of Flagstaff will pay a processing fee and will receive 50 percent of the net revenue share, and the City of Phoenix will receive the remaining 50 percent.
Annually, the City of Flagstaff will deliver up to 12,000 tons of recyclable materials to City of Phoenix facilities.
Contract Term
The one-year term of this IGA will begin on or about June 1, 2023, and conclude on or about May 31, 2024. Provisions of the IGA include four, one-year options to extend the agreement.
Financial Impact
The City of Flagstaff will be paying Phoenix to accept recyclables to cover all expenses associated with proper handling of the materials. If recycle market prices increase during the term of the agreement, Phoenix and Flagstaff would share the additional revenue at a 50/50 split. Funds for the revenue share payments to the City of Flagstaff are available in the Public Works Department's budget.
Location
North Gateway Material Recovery Facility, 30205 N. Black Canyon Highway.
27th Avenue Material Recovery Facility, 3060 S. 27th Ave.
Council Districts: 2 and 7
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Works Department.