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Allied Waste Presentation 06-18-18Recycling is Broken The need for change… Annual Request for Price Increase Update on Cart Audit Area Price Comparison 2 •China Sword −Explained −Impact •Requested Price Increase •Additional Recycle Cart Request •Area Price Comparison Today’s Agenda Replacing a fundamentally broken business model with a durable and transparent partnership 3 China Sword Reductions took effect in March 2018, and drive costs and changes at most recycling facilities in the country to meet new standards •A significant reduction in acceptable contamination levels (From ~3% to 0.5%) in any recovered paper and plastic grades. •Additionally, China banned all mixed paper from import, regardless of contamination levels.(20% of historical stream). For decades, China has been the largest importer of the world’s recycled commodity, and the U.S. was 40% of the inbound stream. In 2017, China announced efforts to clean up the country, which included dramatic changes for acceptance criteria of imported recyclables. 4 Market Impacts of China Sword 5 China Sword Immediate Impacts While we continue to process mixed paper and old newsprint, we are proactively evaluating the need to dispose of excess material that deteriorates beyond the point of commercial value, or poses safety risks •Actively exploring other domestic and international markets −Many are flooded by the global industry shifting away from China Jan 2018 –Processed bales in Northwest, without market buyers, deteriorated by weather •Adjusted processing speeds to improve quality of sorted material −As a result, some facilities are unable to handle daily material volume •Adding human resources to our sort lines, and increasing self-inspections to further reduce contamination •Exploring investments in newer, more accurate sorting technology (in select markets) 6 Long Term -Public Education 1.Public Education –WHAT to Recycle Paper Plastic CardboardMetal Glass ALWAYS Recyclable NEVER Recyclable Diapers Garden Hoses Plastic Bags Shoes/ Clothing Food Waste Yard Waste Empty. Remove any remaining food or liquid contents from your recyclable item before placing it in a recycling container; Clean. Lightly rinse the recyclable item to remove any remaining residue; and Dry. Gently shake out excess water or let the recyclable item air dry before placing it in a recycling container. SOMETIMES Recyclable (Select Markets) 2.Public Education –HOW to Recycle 7 Long Term -Reassessment of Accepted Materials Recycling programs must focus on Sustainable Materials Management, not simply diverting material that may have no beneficial use •Municipalities need to shift program focus to Sustainable Materials Management-based views, which looks at the overall benefits of each accepted material in the stream. Some packages have evolved to less marketable materials •Programs have drifted to focus on total diversion rates, rather than what materials are truly beneficial to recycle •Some collected materials are recyclable, but lack local end markets, or have a negative recycling value. These realities render the processed materials unmarketable ($10) Glass has a negative value to recycle 8 Collection •Cost to provide truck, driver, container and scheduled collection service on contracted basis •Collected material transported to processing facility Processing •Capital & labor intensive process •Comingled material sorted into separate products, removing contamination •Clean products baled and prepared to ship Residual •Contaminated or non- recyclable material •No marketability •Must be transported and disposed at landfill for a cost Commodity Sales •Processed material transported and sold to end markets •Subject to quality standards •Product mix and quality drives value •Some material may have negative value The Cost of Recycling New Recycling Business Model Monthly Collection Charge Net Processing Fee (Commodity sales –processing costs –residual cost) The cost of a recycling collection program is the sum of the Collection Charge and the Net Processing Fee + 9 CHINA SWORD IMPACT 1.The decades old recycling model is no longer executable or viable. 2.Recycling costs are increasing. 3.Immediate partnering is needed, as well as a new business model. 4.Implement Public Education Outreach with Communications Dept. to inform residents what to recycle and how to recycle –clean up the contamination in the stream. 10 Contract Status and Price Increase History •Current 5 year contract extension approved by Ordinance 756 in December 2015; Expires December 2020. •Contract allows for a 3% increase each year beginning January 1, 2018 (subject to Council Approval) −Last increase at contract renewal January 1, 2016 Solid waste and Recycling Rates Solid Waste Recycling Total % Increase 2001 $7.00 $1.75 $8.75 2008 $8.00 $2.75 $10.75 23% 2016 $8.40 $2.89 $11.29 5% 2018 $8.65 $3.89 $12.54 11% 11 $11.29 $12.54 $11.76 $12.63 $11.86 $13.87 $12.00 $14.53 $12.51 $14.94 $11.91 $18.92 $25.77 $27.00 $13.30 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 Westlake Current Westlake Proposed Bedford Colleyville Euless Grapevine Hurst Argyle Roanoke Trophy Club Keller Highland Park University Park Westlake Hills Southlake 0% 2% 4% 6% 8% 10% 12% 14% Solid Waste and Recycling Rate Comparison Trash Recycle Franchise Fee 12 Price Increase Drivers Solid Waste •Disposal •Carts •Trucks •Steel for Containers •Fuel (sometimes) Recycling •Cart Audit reflects 398 additional recycle carts. •Shortfall due to collection costs no longer covered by commodity revenues-need $1.00 increase to recycle rate. •Cart costs increase annually Westlake Residential Solid Waste and Recycling 467.54 408.28 513.42 468.68 212.25 198.7 285.7 277.91 0 100 200 300 400 500 600 2014 2015 2016 2017 Resi Trash Resi Recycle T o n n a g e 14