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HomeMy WebLinkAbout5.4 A Resolution authorizing the Mayor to execute an amendment to the Solid Waste Contract Page 1 of 3 Agenda Item Details MeetingMar 05, 2019 - REGULAR MEETING OF THE MOUNT PROSPECT VILLAGE BOARD - 7:00 p.m. Category5. CONSENT AGENDA Subject5.4 A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE SOLID WASTE CONTRACT FACILITATING PARTICIPATION IN THE SOLID WASTE AGENCY OF NORTHERN COOK COUNTY RECYCLING INCENTIVE PROGRAM. AccessPublic TypeAction (Consent) Preferred DateMar 05, 2019 Absolute DateMar 05, 2019 Fiscal ImpactNo BudgetedNo Budget SourceN/A. Recommended Pass a resolution authorizing the Mayor to execute an amendment to the solid Actionwaste contract facilitating participation in the Solid Waste Agency of Northern Cook County Recycling Incentive Program. Public Content Information During the past year, staff has met with representatives of the Village's solid waste hauler, Republic Services (Republic), to discuss the viability of recyclable materials markets. Republic reports that sales of recyclable materials continue to yield a negative revenue stream. The loss of profitability in the consumer recycling sector appears to be industry-wide and attributable to import restrictions implemented by China. On January 1, 2018, China initiated a complete moratorium on all inbound mixed paper. The moratorium included an array of other recyclables ranging from auto parts to old ships. On March 1, 2018, China reduced the allowable contamination limit on sorted paper and all plastics from 3% to 0.5%. Between May 4 and June 4 of last year, China closed pre-processing inspection stations and did not accept any imported recyclable materials. For decades, China has been a primary destination for U.S. recyclables and trash. As much as 30% of the U.S. recyclables stream was shipped to China annually. The restriction of this market has resulted in stockpiled recyclables in many developed countries, including the U.S. Needless to say, denial of the Chinese market has adversely impacted the economics of the recycling business. The Village's contract with Republic grants the firm title to recyclable materials upon collection. Republic retains all revenue from the sale of recyclables. Page 2 of 3 Unlike refuse (residential), Mount Prospect recycling is not obligated to the Solid Waste Agency of Northern Cook County (SWANCC). Rather, Republic is permitted to market recyclables and sell them to recycling facilities that offer the best prices. This income stream supplements the comparatively low household recycling rate Republic garners from our contract. Republic asserts that continued unprofitability in the recyclable materials market is not sustainable. Notably, their business model is predicated on a positive revenue stream from the sale of recyclable materials. In addition, the cost of processing and recycling this material is escalating and approaching the landfill disposal rate. It is feasible that soon it may be less expensive to landfill recyclables rather than process them. SWANCC confirms Republic’s reports that the net value of recyclable materials has dropped from $16.83/ton in April 2017 (income) to -$24.47/ton in April 2018 (expense). Presently, it costs $36.63/ton (-$36.63) to process recyclables. For reference, the cost to tip refuse at SWANCC’s Glenview Transfer Station is presently $46.77/ton. Since curbside recycling will likely behave as an expense rather than income into the foreseeable future, participation in the SWANCC recycling program has become an attractive alternative. Staff has offered Republic an opportunity to participate in the SWANCC Recycling Incentive Program. This program is limited to SWANCC members and administered by Groot Industries. All recyclables collected in Mount Prospect will be delivered to the Groot recycling facility in Elk Grove Village. There is no cost to the Village (or to Republic) to take our recyclable materials to SWANCC. Village membership obligates SWANCC to accept our recyclables. Republic will not receive any revenue from the SWANCC program. However, it will avoid financial losses from processing recyclables. Participation also holds potential for the Village to realize revenue sharing in the event recycling markets turn and resume profitability. In addition, it provides assurance that recyclables will continue to be properly processed and limits the potential that recyclables will be landfilled. However, shipments could be subject to surge pricing if capacity of the Groot recycling facilities are exceeded and recyclables have to be shipped to non-local facilities for processing. To date, Groot has never invoked surge pricing for SWANCC members. To participate in the SWANCC program, written notice is required. Staff drafted a letter to SWANCC Executive Director David Van Vooren (copy attached) formally initiating the Village’s participation effective July 1, 2019. SWANCC rules require 120 days advanced notice and commitment to a 2-year term. Staff and Republic will revisit terms and disposition of recyclable materials prior to culmination of the 2-year term. To mitigate the possibility of surge pricing, and participate in some cost savings garnered by joining the SWANCC program, Republic has agreed to an upfront payment to the Village of $50,000 in July 2019 and $55,0000 in July 2020. Attached is a proposed amendment to the existing exclusive solid waste contract facilitating modifications necessary to participate in the SWANCC Recycling Incentive Program. Also attached is a resolution authorizing the mayor to execute this amendment. Alternatives 1. Pass a resolution authorizing the Mayor to execute an amendment to the solid waste contract. 2. Action at discretion of Village Board. Staff Recommendation Page 3 of 3 Staff recommends that the Village Board pass a resolution authorizing the Mayor to execute an amendment to the solid waste contract facilitating participation in the Solid Waste Agency of Northern Cook County Recycling Incentive Program. LETTER TO SWANCC_RIP PARTICIPATION.pdf (42 KB) Republic SWANCC signed amendment.pdf (82 KB)swancc res.pdf (14 KB) Administrative Content Executive Content All items under Consent Agenda are considered routine by the Village Board and will be enacted by one motion. There will be no separate discussion of those items unless a Board member or member from the audience so requests, in which the item will be removed from the Consent Agenda and considered in its sequence on the agenda. Motion & Voting (not specified) Motion by Richard Rogers, second by Colleen Saccotelli. Final Resolution: Motion Carries Yea: William Grossi, Eleni Hatzis, Paul Hoefert, Richard Rogers, Colleen Saccotelli, Michael Zadel touta Prospect Director Deputy Director Sean P. Dorsey Jason H. Leib Mount Prospect Public Works Department 1700 W. Central Road, Mount Prospect, Illinois 60056-2229 February 15, 2019 Mr. David Van Vooren Executive Director Solid Waste Agency of Northern Cook County 77 Hintz Road Suite 200 Wheeling, Illinois 60090 Dave: Please accept this letter as formal request by the Village of Mount Prospect to participate in the Solid Waste Agency of Northern Cook County (SWANCC) Recycling Incentive Program effective July 1, 2019 and extending for a term of two (2) years. The Village agrees to all of the rules, terms, and conditions presently required for participation including a 120-day advanced notice, a 2-year commitment, reciprocal curbside inspection program, and responsibility for surge or "trans-load" charges. If you have any questions, or would like to discuss this matter in further detail, please contact me at your convenience. Sincerely, n P. Dorsey Public Works Director Phone 847/870-5640 Fax 847/253-9377 www.mountprospect.org First Amendment to Residential Solid Waste Services Contract Specifications This First Amendment(the "Amendment") to Residential Solid Waste Services Contract Specifications is entered into this 15t day of March, 2019 between the Village of Mount Prospect, Illinois ("Village") and Allied Waste Services of North America, LLC d/b/a Republic Services of Mt. Prospect, ("Republic" or"Contractor"). Recitals A. The Village and Republic entered in that certain Residential Solid Waste Services Contract Specifications effective September 5, 2017. B. The Village is a contract member of SWANCC. As a member of SWANCC, the Village has the option to participate in SWANCC's Recycling Incentive Program. C. Pursuant to Section F. (Miscellaneous Contract Requirements) of the Contract, the Village and Republic agree to modify the terms of the Contract as described herein. Agreemcnt NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree to the following terms and conditions: I. Article VIII is amended as necessary to allow the Village to participate in the SWANCC Recycling Incentive Program. 2. The Village shall provide a one-hundred-twenty (120) day advanced notice to SWANCC that the Village shall participate in SWANCC's Recycling Incentive Program. 3. That the Village shall participate in the SWANCC Recycling Incentive Program for a minimum of two (2) consecutive years. 4. The two-year (2) commitment shall begin on the first date that Republic shall be permitted by SWANCC to deliver Recyclable Materials to SWANCC (the "Delivery Date").. 5. Notwithstanding Section VIII(A)(8) of the Contract, legal title to Recyclable Materials shall remain with the Village until such Recyclable Materials are accepted for delivery at the Groot processing facility in Elk Grove Village. b. To offset any and all potential costs and expenses that may be borne by the Village as a result of this Amendment, Republic shall remit $50,000 to the Village within 30 days of the Delivery Date and shall remit an additional $55,000 to the Village at the one (1) year anniversary of the Delivery Date. 7. Republic shall implement a satisfactory point of collection inspection process in the event that SWANCC or Groot informs the Village and/or Republic that it requires a collection inspection process. S. Republic shall collect all recyclables deliver them to to Groot's processing facility in Elk Grove Village. 9. The terms and conditions of this Amendment shall automatically renew every two (2) years from the Delivery Date unless Republic and the Village agree in writing to new terms and conditions at least 160 calendar days prior to the conclusion of the two (2)-year term; provided however that for each renewal term, the annual payments provided in paragraph 6 shall increase at a rate escalated 2.25% per year. D. The terms of this Amendment shall supersede any conflicting terms of the Contract. The terms of this Amendment shall only apply to those conflicting terms in the Contract. All other terms of the Contract that are not in conflict shall remain in full force and effect. E. The effective date of this Amendment shall be the date executed by the Village President, and attested by the Village Clerk. IN WITNESS WHEREOF, the parties acting under the authority granted by their respective governing bodies have caused this Contract and its Amendment to be duly executed, in several counterparts, each of which shall constitute an original, all as of the date and year written. Allied Wast Services of North America, LLC by: date: �- title: IL- Attest: date: ��f title: Village of Mount Prospect an Illinois Municipal Corporation by: date: Arlene A. Juracek Village President Attest: date: Karen Agoranos Village Clerk RESOLUTION NO. A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE SOLID WASTE CONTRACT FACILITATATING PARTICIPATION IN THE SOLID WASTE AGENCY OF NORTHERN COOK COUNTY RECYCLING INCENTIVE PROGRAM WHEREAS, the Village of Mount Prospect and Allied Waste Services of North America, LLC (Republic Services of Mount Prospect) entered in that certain Residential Solid Waste Services Contract Specifications effective September 5, 2017; and WHEREAS, the Village of Mount Prospect, as a contract member of the Solid Waste Agency of Northern Cook County(SWANCC), has the option to participate in SWANCC's Recycling Incentive Program; and WHEREAS, pursuant to Section F (Miscellaneous Contract Requirements) of the Residential Solid Waste Contract, the Village of Mount Prospect and Republic Services of Mount Prospect agree to modify the terms of the Contract as described in the amendment attached hereto as exhibit "A". NOW THEREFORE BE IT ORDAINED/RESOLVED BY THE MAYOR AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: That the Board of Trustees do hereby authorize the Mayor to execute an amendment to the Solid Waste Contract facilitating participation in the Solid Waste Agency of Northern Cook County Recycling Incentive Program. SECTION TWO: That the Mayor is authorized to sign the amendment attached and made part of this Resolution as Exhibit "A " SECTION THREE: That this Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. AYES: NAYS: ABSENT: PASSED and APPROVED this day of March, 2019. Arlene A. Juracek, Mayor ATTEST: Karen M. Agoranos, Village Clerk