This item was discussed with the Finance Committee on August 19, 2019 and with Council at the August 26, 2019 Work Session.
Recycling values for the City haven't been positive since July 2017. Prior to implementing the recycling commodities charge in 2018 (Ord. 2018-14), commodities costs were not felt directly by customers because the City’s Sanitation Fund absorbed the costs through garbage rates; however, with the collapse of the recycling commodities market in 2017, that approach was not sustainable. The 2018 surcharge ($3.30/month) went into effect on August 1, 2018, as rate payers had to recover costs from January 1 through July 31, as well as the costs from August 1 to December 31, 2018. For 2019, the costs were expected to be distributed out over a 12-month period instead of 5-months.
The monthly surcharge for 2019 (Ord. 2018-50) was calculated by estimating the cost for recycling each month, divided by the average number of recycling units. The calculation for 2019 was therefore: The average monthly tonnage (125 tons/month) * the average monthly cost per ton ($86.91/ton) / the average number of accounts (9,000 accounts) = $1.21 per month.
Contamination continues to be an issue contributing to high monthly costs, both in unit pricing and the tonnage collected. Reducing contamination at the local level will have little effect on unit pricing because the unit cost is driven by much larger market forces than Walla Walla controls. However, reducing the amount of contamination would reduce tonnage therein reducing monthly costs. It is with that interest that staff prepared a contamination reduction plan. This plan is in general alignment with that required by House Bill 1543 (see highlights below in the policy section). Additionally, on August 8 staff submitted a grant funding request to the Department of Ecology to assist in funding activities identified in the proposed plan. Staff has been notified of award of this grant. It will provide $60,000 to be spent over a 2-year period in support of the Contamination Reduction Plan. However, for the foreseeable future, the cost of recycling commodities will continue to require a surcharge.
PROPOSED "TIPPING POINT” COST-CONTAINMENT STRATEGY
As discussed at the August 26 work session, this strategy proposes to put in-place a “tipping point” for Recycling Commodities costs for 2020 wherein if the per ton cost of recycling exceeds the cost to landfill the material, it will be landfilled. If the cost will be at or below landfill costs, it will be processed for recycling.
As of September, the per ton cost for recycling will be $119 and the cost to landfill $91.90 (2019 rate), a $27.10 per ton difference . If Council choses to adopt this tipping point cost-containment strategy, the following process/steps would occur:
- Staff will notify the Department of Ecology that due to “unreasonable cost impacts on the ratepayer” (see RCW 70.95.090 in the policy section below) the city will be implementing a “Tipping Point” Cost Containment Strategy effective January 1, 2020.
- Monthly, Pioneer Recycling (the city’s MRF) will notify the City of the monthly cost per ton for processing. If the monthly cost exceeds Sudbury Landfill's general refuse disposal cost/ton, BDI will be directed to take all curbside recycling directly to the Landfill and continue disposal in that manner until the Pioneer cost/ton for recyclables processing drops below the Landfill's rate.