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Update on recycling contract; Stadlerr � \ � Public Works CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Date: Subject: PURPOSE Pam Hove, Solid Waste Coordinator January 12, 2021 Update on recycling contract with Waste Management and status of residential curbside organics Staff would like #o update the Mayor and City Council on the city's contract with Waste Management for residential curbside recycling services, which expires March 31St, as well as the forecast for residential curbside organics collection. INFORMATION The City of Hopkins has contracted with Waste Management to provide for residential curbside recycling since 1990. The current rate per household per month is $3.20. Residents are currently charged $5 per month for this service. The City of Hopkins entered into this last contract extension with Waste Management in April of 2016. Waste Management has submitted a 5 year contract extension proposal, to take effect April 1, 2021. The proposal is as follows: Monthl Re clin Rates Per Household Year Rate April 1, 2021thru March 31, 2022 $ 5.15 April 1, 2022thru March 31, 2023 $ 5.36 April 1, 2023thru March 31, 2024 $ 5.57 April 1, 2024thru March 31, 2025 $ 5.79 April 1, 2024thru March 31, 2026 $ 6.02 Waste Management's explanation for the sharp increase is: 1) Decrease in commodity value of recyclable materials. Example: mixed paper, which constitutes 45% of single-sort recycling fetched a price per ton of $87.50 in March of 2017. In March 2018 it had dropped to $5 a ton; and in March of 2019, it actually cost $2.50 a ton to get rid of. 2) Shrunken rate of acceptable contamination by end markets. In January of 2018 China, who had previously been the world's leading market for the sale of recyclables, implemented severe restrictions on acceptable contamination rates of imported recyclables. It dropped from 5-10% to 0.5%. No Materials Recovery Facility (MRF) in the U.S. operates at this near zero-tolerance level, making it extremely difficult for MRFs to find a buyer for their materials. However, in an effort to reach that goal, Waste Management has "slowed down their line" to better remove contaminants. This is done by hand and reduces their output each day. 3) Increased disposal costs from the increased volume of contamination. Waste Management was asked about the negotiability of the proposed prices in the contract extension. Their response was that the only flexibility in the proposal would involve removing the services they provide in waste removal during the Raspberry Festival and the two annual bulk drop off events. This is not desirable to the City. Staff surveyed 25 cities in Hennepin County to discern if this is an accurate price point moving forward in this market as contracts are renewed. See attachment for a complete summary of information collected. The responses were fairly consistent for those who have renewed recently or are approaching renewal; the cost of recycling is going up. As you can see, three companies dominate municipal residential curbside recycling contracts in Hennepin County: Randy's Sanitation, Republic Services, and Waste Management. In October of 2020, Republic Services purchased Randy's Sanitation, essentially reducing the marke4 to two haulers. FUTURE ACTION Staff will be requesting a proposal from Republic and a revised proposal from Waste Management. Proposals will be due February 17, 2021. StafF intend to award the contract at the first or second Council meeting in March. On January 1, 2022, Hopkins will be required by Hennepin County to "make available the collection of residential curbside organics". Staff are researching the best approach to meet this requirement. Factors to be considered are: cost, how to best distribute said cost, the toll of additional truck traffic, and the limited space for storing additional carts. Current options seen as potential pathways to fulfill that requirement are: 1) Contract with independent hauler to service residents who opt in for curbside organics collection. a. Cost of that contract is offset by an additional, though nominal fee applied to all City of Hopkins recycling customers. Those residents who opt-in pay an additional fee to more fully meet the actual cost of the service. b. Cost of that contract is equitably applied to all recycling customers whether they choose to participate or not. Example: the current $5 per month recycling fee. There are some, although very few, residents who do not want to recycle. However, they do pay the same as everyone else for the service to be available. 2) The City collect co-mingled solid waste and organics via the product Blue Bags. This would require the City to terminate its delivery agreement with Hennepin County to deliver refuse loads to the Brooklyn Park Transfer Station, since the County does not accept co-mingled loads. Unfortunately, at this time staff have been unable to locate a transfer station in the area that does accept co-mingled loads from independent haulers. This may change as the deadline approaches. � +, � Q .a u� � L O � � 'n j, � O � N � �S � A . � � � c�a v � � N � 3 � C � 3 'p � V f6 pp � � L' ++ N � � v 0 +�_+ VL- � o � o � �3 � � � � � 3 � a, � + p` o°',o � -a >. � N C U � �y d N � � lC � � i� � � � `y ++ O .N � U � � � �, v� ++ +' N ' �s., v v v +� `n 'C � 'i � p � 0 � a�' o v 3> � ^ N N N N in v� � O �f 1� O N O O tD t1') ai O 1� O ' O t�t �� R� �� i� O N M tt9 tf) O r-I t0 M Q1 O t� O � N a� vf 0�' 00 �!]A aF OA aF i/1� V? V} '(/} t/)� t/'Y� t/� '(/} '(/} i/} i/} t/� t/? i/'� � O N a� N s� N a� Gi C£ tLa O r�a O� O �/} V�? 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