TO: Mayor and City Commission
FROM: Cale Curtis, City Manager
DATE: June 17, 2020
Title
AN ORDINANCE OF THE CITY OF MARGATE, FLORIDA, AMENDING ORDINANCE 2015-6 TO APPROVE SECOND AMENDMENT TO THE FRANCHISE AGREEMENT FOR SOLID WASTE AND RECYCLING COLLECTION SERVICES WITH WASTE MANAGEMENT, INC. OF FLORIDA; PROVIDING FOR SUSPENSION OF DELIVERY OF RECYCLABLE MATERIALS TO THE DESIGNATED RECYCLABLES PROCESSING FACILITY; PROVIDING FOR DISPOSAL COSTS; PROVIDING FOR REPEAL; PROVIDING FOR SEVERABILITY; PROVIDING FOR INCLUSION IN THE CITY'S CODE OF ORDINANCES BY REFERENCE; AND, PROVIDING FOR AN EFFECTIVE DATE.
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BACKGROUND: Under two separate agreements, the City contracts with Waste Management for the hauling and processing of recyclables. The recyclables processing agreement defines a cost structure for the processing of recyclables based on market value and the level of contamination. The Average Market Value (AMV) is based on the material composition and the resulting value in the marketplace in a particular month. For Fiscal Year 2018, the average AMV was $84.11 per ton; for 2019, the average was $48.85 per ton. The Year to date for Fiscal Year 2020 is $18.07, with May coming in at $16.69 per ton. Contamination has risen to all-time highs. Despite best efforts by staff and an aggressive marketing campaign, contamination continues to climb. Some projections show contamination rates exceeding 50-60%.
Per Contract, Waste Management is required to receive their processing fee from the value of the recycled material. When the value of those recyclables exceeds the cost of processing, the City receives revenue. However, as is the case now, when the value falls below the cost of processing, the City must pay the shortfall. For example, the current processing fee is $99.20 per ton. The AMV for April, after factoring the 47% contamination rate, was $13.68; a shortfall of $85.52 per ton. Deliveries to the Waste Management Materials Recycling Facility in April consi...
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