Loading...
Discuss the Renewal of Hopkins Recycling Contract with Waste Management\Work Session Memo 03.08.16 Memorandum To: Honorable Mayor and Members of the City Council From: Pam Hove, Solid Waste Coordinator Cc: Mike Mornson, City Manager Date: March 8, 2016 Subject: Discuss the Renewal of Hopkins Recycling Contract with Waste Management Staff would like to discuss renewing our recycling contract with Waste Management, and will seek approval of this renewal at the March 15, 2016 Council Meeting. The term of this agreement will be from April 1, 2016 through March 31, 2021. Staff recommends renewing the contract for the following reasons: 1. Waste Management has provided reliable, good service to the City for over 25 years 2. By renewing the contract, residents will continue to receive seamless recycling services The renewal proposed is a five-year contract extension. Most aspects of this contract are a continuation of the existing agreement. The proposed changes to note are: 1. They have proposed a fixed 2.5% increase for years two, four and five making the price per household as follows: a. April 1, 2016 – March 31, 2017 – $3.20 per household (this is our current rate) b. April 1, 2017 – March 31, 2019 – $3.28 per household c. April 1, 2019 – March 31, 2020 – $3.36 per household d. April 1, 2020 – March 31, 2021 – $3.44 per household. 2. To compare, we have been absorbing a 1.8% rate increase each year for the existing 5-year contract, which states the adjustment will be based on the percentage of increase in either the Consumer Price Index or 3%, whichever is less. This has resulted in the following price increases: a. April 1, 2011 – March 31, 2012 – $2.99 per household b. April 1, 2012 – March 31, 2013 – $3.04 per household c. April 1, 2013 – March 31, 2014 – $3.09 per household d. April 1, 2014 – March 31, 2015 – $3.15 per household e. April 1, 2015 – March 31, 2016 – $3.20 per household 3. Waste Management has removed the diesel fuel table since they’ve transitioned away from diesel trucks to compressed natural gas trucks. This is a monthly fuel surcharge itemized on monthly invoices. Public Works Department \Work Session Memo 03.08.16 4. Waste Management has removed the recyclable material offset as well. This was an itemized line on the invoice, reflecting the cost of processing recyclables minus 80% of the revenues from the materials. As the market fluctuated, it has appeared as a credit, or in the case of the last 12 months, a charge, totaling in $11,272.30 last year. Staff would like to take this opportunity to provide an update on the state of Organics in Hopkins. Why doesn’t Hopkins have a residential curbside program? Unlike many other communities in the metro, the City provides the refuse service in Hopkins. In order to provide an Organics service, one of three things would need to happen: 1. Hennepin County would need to be willing to accept a product called Blue Bags with our regular refuse collection that we currently bring to their Brooklyn Park Transfer Station (BPTS). Blue Bags were formerly a product of Randy’s Sanitation and have been used in surrounding communities like Wayzata for several years. Randy’s Sanitation sold Blue Bags and it is now known as Organix Solutions. Because Minnesota State Statute defin es Organics as a recyclable, all Hopkins refuse customers would be enrolled in the program as part of the existing recycling service. Likely, a small increase in the recycling rate (currently $5.00) would be instituted to cover the cost of this program. Participation would be voluntary and residents would need to enroll with the City. Annually, the Solid Waste Coordinator would provide names and addresses of participants to Organix Solutions so they could mail a year’s supply of bags to each participating residence directly. Residents would put their Organics in these bags, put the bags in their garbage cart, the City would collect refuse as usual, tipping our hauls at the BPTS. Blue Bags would be picked off the tipping floor and hauled by Specialized Environmental Technologies (SET) to one of their commercial composting facilities. While this option was in heavy negotiations early last summer and a likely possibility, Hennepin County has decided not to move forward at this time. 2. Same scenario as above, but we end our relationship with Hennepin County and take our refuse loads to a private transfer station that accepts co-mingled Organics and MSW . We can anticipate the tipping fees for mixed loads at a privately held transfer station to be higher, but with the proposed increase in the recycling rate as well as additional SCORE funds available to us, we could compensate for this expense. Effective January 1, 2016 Hennepin County raised t heir tipping fees from $49 per ton to $55 per ton. This is competitive to other area and privately held transfer stations. For example, if we were to begin going to the Dem-Con transfer station in Shakopee who accepts co-mingled loads and is only 3-4 miles further than the BPTS, they charge $55 per ton, plus an $8 processing fee per ton. \Work Session Memo 03.08.16 Prior to January 1, 2016, the difference in cost between Hennepin County’s BPTS and a privately held transfer station who would accept Organix Blue Bags was $14 per to n. Now that Hennepin County has adjusted their fee to align with other area transfer stations, it makes moving to a transfer station who accepts co-mingled loads more within our reach. 3. We contract the service with an outside hauler. For 5 years the City of Hopkins benefitted from a unique agreement with the City of Minneapolis to haul Organics collected at our municipal buildings. The City of Minneapolis charged Hopkins $0.13 per cart to drive here, pick-up and haul our Organics away. With the County now requiring residential curbside Organics pick-up, and Minneapolis being the first tier city, this relationship came to a close on June 12, 2015. They needed all their trucks, carts and manpower available to service their own community. To compare, Waste Management provided a quote of $5.00 per cart to add a weekly residential curbside Organics service to our existing contract. The cost is too high to justify at this point in time. This scenario would also require residents to find space for a third cart, and would bring an additional truck and weekly route down our streets and alleys. In 2011 State Statute defined Organic material as a recyclable, and therefore mandated that cities have a residential curbside collection program. This is bei ng rolled out in tiers, with the City of Minneapolis being the first tier city in Hennepin County, starting their curbside program in 2015. It is realistic to expect that Hopkins won’t be required to have such a program before 2017 but possibly as late as 2020. Staff intends to further explore Option 2 in 2016 and intends to visit with Council in the fall to update and discuss the future of Organics in our community. Lastly, staff would like to share their intention to meet and discuss with the restaur ant community the possibility of a polystyrene ban in Hopkins. Minneapolis, St. Louis Park and Edina have or are in the process of implementing a polystyrene ban. As Hopkins has a large number of restaurants, staff feels it’s worth exploring for our community. Staff will update the Council as that research develops.