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| TITLE: |
| Consideration and Adoption of Resolution No. 2023-28: A resolution of the Flagstaff City Council, approving an Intergovernmental Agreement between the City of Flagstaff and the City of Phoenix for recyclable materials processing. |
| STAFF RECOMMENDED ACTION: |
1) Read Resolution No. 2023-28 by title only
2) City Clerk reads Resolution No. 2023-28 by title only (if approved above)
3) Adopt Resolution No. 2023-28
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| Executive Summary: |
On May 4, 2023, the City of Flagstaff acquired the Materials Recovery Facility at 1800 N. Butler Ave as a result of a termination agreement with the third party contractor and operator, Norton Environmental. On May 8, 2023, the City of Flagstaff resumed collection of the community residential recycling materials and began utilization of the facility for a transfer tipping floor warehouse in a portion of the building to support the long haul truck loading logistics to send the recyclables to a Materials Recovery Facility owned by the City of Phoenix located at 30205 N. Black Canyon Highway. Once loaded onto semi-trucks the recyclables are delivered to the City of Phoenix North Gateway Materials Recovery Facility.
The Intergovernmental Agreement (IGA) formalizes our relationship and clearly articulates the terms and conditions required of all parties to extend the utilization of the facility for the benefit of the residents of the City of Flagstaff. |
| Financial Impact: |
Flagstaff will pay, or receive a credit from, Phoenix for each ton of Recyclables accepted and processed at the MRFs. The per ton Processing Fee that Flagstaff pays will be applied against the calculated Average Quarterly Outbound Blended Rate (AQOBR) per ton shipped by Phoenix from the MRFs. The AQOBR will be calculated quarterly using the blended rate at the North Gateway Transfer Station. If the AQOBR is higher than the Processing Fee, the excess revenue, net of the Processing Fee, will be 50% for the City of Flagstaff and 50% for the City of Phoenix. An AQOBR that is less than the Processing Fee will result in a charge to Flagstaff that will not exceed the Processing Fee.
For FY 2023-24, the Solid Waste Fund has $750,000 budgeted for the operation of the transfer station, transportation cost of the recyclables and the recycling processing cost net of any revenue offsets. The annual estimated cost of the transportation and recycling processing fee is between $850,000 and $1.7M. The Solid Waste Fund will be adjusting its budget for FY 2023-24 to absorb these additional costs.
The financial analysis of delivered recyclables is in evaluation and the City is working through multiple scenarios and alternatives that will not only yield the best practices of processing but a competitive fee structure to process. This IGA has been deemed financially acceptable and is clear, open, and fair to both parties. |
| Policy Impact: |
| This agreement is essential to continue the community recycling program and collection of recyclables. The MRF that is owned by City of Phoenix is a modern , high-functioning facility that performs well. Our recyclables after shipment are added to the tonnage for further processing and forwarded to secondary markets to be utilized in a future cycle of product. |
| Connection to PBB Priorities/Objectives, Carbon Neutrality Plan & Regional Plan: |
| CNP Strategy SC-3 - Divert more waste from the landfill |
| Has There Been Previous Council Decision on This: |
| No |
| Options and Alternatives: |
1. Secure alternative locations for the community recyclables with other government of private providers.
2. Landfill the collected recycle product after collections |
| Community Benefits and Considerations: |
| This IGA allows for an efficient means of processing the community collected recyclables. The cost to build a smaller local facility is very high and it has been demonstrated that the financial solvency of such a plant operation is not in the best interest of the City. The scale and large volume processing at the Phoenix facility has resulted in continued investment in technology and plant operations creating a best case scenario. In addition to the high quality processing, the volume of commodity post-processing likely results in a stronger market return and will meet community substantiality goals more effectively. |
| Community Involvement: |
| While there has not been community involvement in this IGA agreement, Public Works recognizes the high level of interest and community desire to participate in a meaningful way as we transition to a regional transfer station model supported by trucking to a larger high production facility. One area of improvement requiring strong community involvement and continued education will be to reduce initial consumption and setting more aggressive diversion rates while reducing overall contamination. This effort will require a strong commitment by the entire community and Public Works will be working closely with Sustainability to chart the best path to success with measurable results. |
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