AGENDA ITEM REPORT
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A MOTION TO AUTHORIZE A BUDGET TRANSFER IN THE AMOUNT OF $250,000 FOR EXPENDITURES RELATED TO RECYCLING PROCESSING FEES AND HOUSEHOLD HAZARDOUS WASTE COLLECTION EVENTS FROM GENERAL FUND ACCOUNT 0199-9901 - CONTINGENCY TO GENERAL FUND ACCOUNT 0173-4815 - RECYCLING PROGRAM.
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BACKGROUND:
In past years, the City received revenue from the sale of collected recyclable materials that offset the costs associated with processing the materials. With the recent contamination restrictions implemented by China, the disposal options and market demand has been greatly reduced, causing an increase in processing costs and a decrease in revenues received for the recyclable materials collected. These factors will result in a shortfall in the account to cover program related costs.
The current agreement with Waste Management to process recyclables requires the City to pay approximately $100 per ton for processing. This cost is mitigated by the value of the commodities delivered (currently +/- $35 per ton). It is important to note that the value of the recyclable materials changes monthly based on the international commodities market. Whereas, the City used to make enough money on the materials to offset the processing costs, the current conditions are such that the City is now paying a net of roughly $65 per ton ($100 - $35) for processing.
The City now delivers roughly 250 tons per month to the recycling facility. Based on the aforementioned net processing cost of $65 per ton, it is estimated that the annual cost for processing recyclable materials will be approximately $195,000 (250 tons X $65 per ton X 12 months). Combined with the annual cost of the City's Household Hazardous Waste Collection program ($50,000 to $55,000 per year), it is estimated that $250,000 per year will be necessary to cover the costs associated with the City's Recycling and Household Hazardous Waste Collection programs. With the rollout of the new recycling prog...
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