3. Memo - Recycling Contract Renewal Concerns 12-7-2022Page 1 of 2 City of Scandia 14727 209th St. N., Scandia, Minnesota 55073 Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com
DATE:
Tuesday, December 7, 2022 FROM: Ken Cammilleri, City Administrator
TO: Staff RE: Household Recycling Collection Contract Concerns
Background The City has long maintained a contract with SRC. Inc. to provide community-wide household
recycling collection services. The City pays $27,846 for this service as part of a flat rate fee. The City budget provides for the full costs towards the service costs. This rate has seen relatively little change, as SHR leveraged this service expense by mostly securing most of the City’s refuse hauling
services. (The previous version of this memo in last month’s packets inaccurately suggested that this cost was
subsidized by Washington County Municipal Recycling Grant. This was not correct. The City only uses the grant towards its eligible purposes including public education related to recycling, support for eligible uses, such as event and public space recycling containers, education on recycling related
issues, and other recycling related projects as deemed eligible under grant agreement.) The City’s recycling program has a history that goes back to 1994. Since that time, Washington County has maintained their recycling grant program to help reduce the County’s reliance on solid waste disposal facilities and to implement environmentally responsible waste management practices. More importantly the program assured that all households in the City received recycling and, indirectly, refuse collection services.
The Issue SHR, Inc. was recently purchased by Waste Management, Inc. Since the sale of the business closed, the new owners have set out to implement significant changes to hauling service rates. Currently, they have provided customers with notice of their rate changes and have indicated that they will continue to honor the existing recycling collection service agreement with the City through
the remainder of the contractual term of December 31st. Their new rate proposal is nothing short of a dramatic price shift. The newly proposed rates are not one flat service rate, the agreement is for 5 years rather than one, and, are unprecedented, based on our experience with SRC.
Here is Waste Management’s proposed new rate structure per household per year: 2023 2024 2025 2026 2027 $177.06 $185.90 $195.26 $204.88 $215.28
4.76% Change over PY 4.89% Change over PY 4.7% Change over PY 4.83% Change over PY
Page 2 of 2 City of Scandia 14727 209th St. N., Scandia, Minnesota 55073 Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com
To put this expense into total perspective, we can apply Met Council’s estimated 2021 household
count 1582: 2023 2024 2025 2026 2027 $280,108.92 $294,093.80 $308,901.32 $324,120.16 $340,572.96
Next Steps
Addressing this recycling issue is an obligation to ensure continued eligibility to receive grant funding, and most importantly, to sustain continued recycling within our community. Staff is currently working to get better data to understand how many customers are being served by Waste Management and SRC, when it was independent. More information will be provided as it becomes available. In the meantime, the current proposal as it stands is not financially viable for the City to continue. We are moving closer to looking into regulatory options to address this issue and the overall affordability of waste hauling services. In the meantime, Max Dalton, Washington County’s Environmental Specialist assigned to advise on these types of issues has been invited to this evening’s meeting to answer any questions you or the community may have. He can also provide a brief explanation of other similar issues that have faced or are still facing communities in our county. Please find a copy of the rate proposal included in your packets for reference.