6. Reconsider decision to Cancel Recycling Contract •
I , CITYOF
or CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900
' MEMORANDUM
TO: Don Ashworth, City Manager �,�J--��---1�
FROM: Jo Ann Olsen, Senior Planner <)w
DATE: October 17 , 1989
' SUBJ: Waste Management Curbside Contract
On October 23 , 1989 , the City Council will be reconsidering the
cancellation of Waste Management' s Curbside Recycling Contract.
Waste Management has offered to provide services for November and
December of 1989 at 87 per household with the condition that the
City enter into a contract with Waste Management for 1990 , at
$1 . 35 per household through June, 1990 and $1 . 60 per household
for the remainder of the year. As a condition of Waste
' Management' s offer, the 1990 contract will not include a 30 day
notice of cancellation .
On October 16 , 1989 , the City Council discussed the recon-
sideration of Waste Management' s Curbside Recycling Contract. It
was discussed whether or not Waste Management would agree to a
1990 contract which would have an early release clause. The
contract would still be for $1 . 35 per household through June,
1990 and $1 . 60 per household for the remainder of the year but
would allow the City to cancel the contract and reimburse Waste
Management ( at an average monthly cost) for the number of months
of service which was provided. Such a clause in the contract
will allow the City to get out of the contract with a penalty
' fee.
Waste Management and staff have been working with the proposed
early release clause for the 1990 contract. It has been deter-
mined that the average cost using . 87, $1 . 35 and $1. 60 would be
$1. 39/household/month. Attachment #1 is a chart listing the
early release fee as compiled by Waste Management. The fourth
column provides the cumulative fee which the City would have to
pay in addition to that month' s fee if the City chooses to use
the early release clause. The fifth column provides year to date
expenditures so that after each month it can be seen how much the
City would have spent to that date. The 1990 contract will
result in a total cost of $68 , 040 . With the money budgeted for
the 1990 recycling fund, the City would be able to pay for the
service through April , 1990. Funding for advertising, public
education, containers , etc. would not be available without using
general funds .
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IIMr. Don Ashworth
October 17, 1989
Page 2
' Carver County is currently receiving quotes from recycling com-
panies for costs to provide once a month curbside recycling for
the City of Chanhassen. In speaking with Mike Lein and Rick
Schneider from Carver County the low bid for once per month pick
up for curbside recycling in Chanhassen will be presented to the
Carver County Board as a basis for determing the amount of money
that should be funded for Chanhassen. The cost to provide curb-
side recycling to the City of Chanhassen on a once per month
basis should not be too much less than the cost to provide ser-
vice twice a month or once every other week. Therefore, the City
might receive money that would cover a portion of the costs to
maintain the existing curbside recycling service to the citizens
of Chanhassen but that full cost is not guaranteed and may not
be available until mid year 1990.
If the City Council wishes to maintain and improve recycling ser-
vice in Chanhassen, staff feels that other options need to be
pursued to remove the burden of funding the recycling program
solely from the City' s general fund. Even if the 1990 contract
is accepted between Waste Management and the City of Chanhassen,
' the City should have a means to pay for the contract rather than
relying on monies from Carver County and the possibility of
having to release from the contract mid-year 1990 and pay a
penalty fee.
The following is a review of recycling options that the Recycling
Committee and the City Council should be considering. While
considering these options, keep in mind the short term goal of
continuing recycling pick-up and long term goals of removing the
cost from the City' s general fund.
1. Organized colllection. The City would contract with one
hauler for the entire city or several haulers with the city
divided into districts. The hauler(s) would bill the city
and the city would then bill the residents for the cost of
the trash pick-up. As part of the solid waste contract, the
hauler(s) would be required to collect recyclables as deter-
mined by the City the same day as refuse collection. The
city could also still contract out for the curbside
recycling. The additional cost to provide curbside pick-up
of recyclables would be added to the solid waste bill which
would be billed by the city to the residents .
During the past meetings with the Recycling Committee, it
' appears that the ultimate goal for the city to pursue would
be to continue service and to reduce the number of haulers in
Chanhassen. Currently, there are 16 licensed haulers in
Chanhassen. Organized collection would reduce the number of
haulers in the city. This will be seen as a negative to haulers
who are displaced. By being in charge of billing the city
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Mr. Don Ashworth
October 17, 1989
Page 3
would also have the opportunity to provide immediate and con-
sistent
benefit to residents who do recycle, such as pro-
viding a rebate or reduction in the solid waste bill for
those who do recycle.
Pros I
°Reduce the number of trucks on city streets '
°Remove cost of service from city budget
°Allow incentives for recycling '
°Provide same day pick-up
°Leaves money available for containers, public education, etc. 1
Cons
°Result in displacement of existing haulers
°Longer time to implement '
°Political
°Require city to administer waste collection (billings,
complaints, etc. )
2. Require Collection of Recyclables. The city would amend the 1
solid waste ordinance to require all haulers licensed in
Chanhassen to collect recyclables on the same day as solid
waste collection and to collect recyclables as determined by
the city. The hauler would still be responsible for all
billing and any increase cost for provision of curbside
recycling. Several cities have implemented such a program
(Eden Prairie and Burnsville) with success. The implemen-
tation of such a program was not objected to from the resi-
dents or the haulers since they keep their same haulers and
contracts.
This option would provide a more smooth transition for
continuing to provide curbside pick-up and can be drafted to
reduce the number of trucks on city streets. The ordinance
can be amended to grandfather in the existing 16 haulers but
also provide for a maximum of 4 haulers to be licensed. As
existing haulers stop servicing Chanhassen, no new haulers
would be permitted until the number of haulers is below 4 and
then the maximum of haulers licensed would be 4. It will
take time to reduce the number of haulers, but it will be
done so that the hauler is giving up the business and the
city is not taking it away. The amendment could require
volume base rates which would benefit residents who recyle by
not having as much volume of "garbage" .
i
#Item #6 - Pa: Lssing e•
Mr. Don Ashworth Four this pae frcan
October 17, 1989 report. Please insert in your
' Page 4 packet. Sorry for the
inconvenience.
Pros
°Easy to implement/smooth transition
°Result in reduction of trucks on city streets
°Remove cost of service from city budget
°Allows incentive for recycling
°Does not displace haulers or change residential contracts
°Not as objectionable to haulers and residents
°Provide same day pick-up
I °Leaves money available for containers , public education, etc.
' °City does not take on administrative responsibility and
billing
' Cons
°Does not immediately remove number of trucks using streets
3. Direct Billing of Residents. The city would draft an ordi-
nance which would allow the city to bill each resident a
determined amount for recycling services . The city would
' continue to contract with one company to provide curbside
collection of recyclables and existing waste haulers would
continue with their current contracts. The city would have
to establish a billing system which would take at least two
months and have to administer the billing and recycling
contract. The city will have to establish a fee which would
cover the cost of the recycling contract and administrative
' fees. Such a separate bill may be objectionable to residents
especially to those who do not participate. The city can
reduce the billing or provide rebates as incentives to those
' who recycle.
4. Joint Bid with the City of Chaska for Once a Month Curbside
Recycling. At the October 16, 1989, special City Council
meeting, the option of providing only once a month curbside
pick up of recyclables was discussed as a means to provide
recycling services at a lower cost to the city. It is
questionable whether or not we would receive bids to provide
once a month pick up since a company that does bid for such a
service has to be able to utilize the trucks and employees
for the remaining weeks in the month. Therefore, the City
Council suggested that staff review having a joint bid with
the City of Chaska to provide each city with once per month
pick up of curbside recyclables. Staff spoke with Kevin Maus
II 'Mr. Don Ashworth
October 17, 1989
' Page 5
from the City of Chaska to determine if they would be
interested in pursuing such an option. Kevin Maus stated
that their Council may be interested in a joint contract with
Chanhassen but their current agenda is to find a new site for
their drop off center. Currently, Chaska has a very succ-
' cessful drop off center which is being relocated and that is
where most of their time and effort is going to at this time.
' If the city choses to pursue a recycling contract for a once
per month curbside pick up, it would have to be provided in
conjunction with a drop off center. Chaska has stated that
they would be willing to work with Chanhassen to possibly
provide a joint recycling drop off center located in a loca-
tion convenient to both Chaska and Chanhassen residents.
If the city chose to do so, such a program could even be
turned completely over to Carver County since they are
required to provide at least once a month pick up for curb-
side recycling to the cities of Chanhassen and Chaska by
October 1, 1990. If such a program is turned over to Carver
County, the city would lose all control and the service would
not begin until October 1, 1990. The city would still have
to pay for the drop off center.
Pros
°Reduces number of truck trips
Cons
°Minimal service
°Difficult for residents who actively participate
r °A step back from what is currently provided
' °Have to coordinate with Chaska and Carver County, who have
not taken such an active stance
5. Continue to Fund Recycling Program Solely through Chanhassen
Budget.
Cons
r °Cannot afford without using general fund
' Summary
The decision before the City Council at the October 23, 1989
meeting is to determine whether or not the City should continue
' with the curbside recycling contract with Waste Management. As
proposed by Waste Management, the City would continue to pay 874
per household per month for November and December with increased
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Mr. Don Ashworth II October 17, 1989
Page 6
rates in 1990. The contract will contain a clause that would
II
allow an early release from the recycling contract with a set
penalty fee. Using the average monthly rate and penalty fee pro-
posed by Waste Management, the City would be able to fund the II curbside recycling contract through April, 1990. Any additional
money for public education, containers, etc. , would not be
available without using monies from the general fund. In
speaking with other cities and reviewing the criteria as pre-
11
sented by the Recycling Commission and City Council, staff is
recommending that the City Council pursue the option to require
licensed waste haulers in Chanhassen to provide curbside I
recycling and that until this option is in place (Jan./Feb. ,
1990) the City Council continue the contract with Waste
Management. Reasons for pursuing this option are as follows: I
1. An amendment to the Solid Waste Ordinance requiring
licensed haulers in Chanhassen to provide curbside
recycling would be fairly easy to implement and could be I
in place within a few months (January/February, 1990) .
It requires approval by the City Council with a first and
second reading and staff would recommend a 60 day period I
before its enforcement to allow the haulers time to
prepare.
2. It would result in minimal disruption to the current
II
situation and provide curbside recycling to Chanhassen
residents without funding the program through the City' s
general fund. I
3. The amendment would require recycling to be picked up on
the same day as garbage, resulting in a program easier
II
for residents to remember and participate in. The amend-
ment to the ordinance could also require same day pickup
for solid waste throughout the City which would prevent
having garbage pick up and recycling pick up occurring
II
five days a week.
4. The amendment would allow the current sixteen licensed II haulers in Chanhassen to be grandfathered in but not allow
any new haulers and set a maximum of four licensed
haulers so that as existing haulers leave Chanhassen, new
ones cannot be added until the number of grandfathered
II
haulers is lower than four. This would work toward the
goal of reducing the number of haulers within the City.
5. The cost of the program becomes part of the present solid II
waste bill from one hauler and the City does not have to
establish a billing system which would result in addi-
tional administrative costs.
6. The ordinance could also require the contractors to pro-
Ivide a volume base rate which would directly benefit
residents who do recycle.
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Mr. Don Ashworth
October 17, 1989
Page 7
7. This option would take the cost away from the City and
allow the City to use monies towards public education,
purchasing of containers, provision of special pick up
days such as a city-wide pick up of all materials
including white goods, batteries, oil, etc.
Staff is recommending that the contract with Waste Management be
continued to maintain curbside pick up of recyclables and
provide lead time that is necessary to implement the recommended
alternative for providing recylcing service to the residents.
*Note - Waste Management is aware of staff' s proposal to require
licensed haulers to pick up recyclables, does not object
to it and would still wish the city to continue their
contract.
Manager's Comments : This report is literally fresh off the
press to meet the Council' s desire to determine whether
"reconsideration of cancellation" is warranted. As such, the
attorney has not reviewed this and will have to give his opinion
Monday evening.
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EARLY RELEASE FEE II
Final Month Average Monthly (1.39) Cumulative Year To Date
of Service Rate Minus Paid Rate* Fee Expenditures
1989 November $ 1,815 1,815 4,860 II
December 1,815 3,630 9,720
1990 January 135 3,765 14,580
February 135 3,900 19,440 I
March 135 4,035 24,300
April 135 4,170 29,160
II
May 135 4,305 34,020
June 135 4,440 38,880 I
July (740) 3,700 43,740
II
August (740) 2,960 48,600
September (740) 2,220 53,460 I
October (740) 1,480 58,320
November (740) 740 63,180 I
December (740) 0 68,040
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* .87 - 3,045 per month 30 day notice I
1.35 - 4,725 per month 14 month contract
1.60 - 5,600 per month Average monthly rate is
1.39 - 4,860 month $4,860 ($1.39 per home)
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City Council Meeting - August 14, 1989
11 Councilwoman Dimler: Mike has wersh'
50 0 owership.
1 Councilman Boyt: He just gave us the dock right? If we want it, you're going
to give it to us?
II Mike Wegler: I gave you the dock under good pretenses that it was going to be
grandfathered in there and it was going to be secure for kids. My kids and kids
down the road and I have no reassurance tonight that that's going to happen.
IICouncilwoman Dimler: No you don't.
Councilman Boyt: It's like any piece of park property.
IIMike Wegler: There we go again. We gave it to you for a $1.00
ICouncilwoman Dimler: Grandfather them in.
Roger Knutson: You can grandfather them in.
IICouncilwoman Dimler: Yes.
Roger Knutson: You can write the ordinance to grandfather them in.
IICouncilman Johnson: But we have to hold the hearing on the ordinance.
ICouncilwoman Dimler: Fine. Then I'll go along with it.
Mayor. Chmiel: Something so simple always becomes a big problem.
II Councilman Johnson: So how are we going to notice this ordinance? Are we going
to spend $1,000.00? I think we ought to publish it in the newspaper and I move
we publish this ordinance in the newspaper including wording about
II grandfathering.
Mayor Chmiel: Is there a second?
IICouncilman Workman: Second.
I Councilman Johnson moved, Councilman Workman seconded to publish the swimming
raft public hearing notices in the newspaper. All voted in favor and the motion
carried.
Ilk _
0 OSCUSSION OF CURBSIDE RECYCLING CONTRACT.
Ir. Jo Ann Olsen: Waste Mangement has contacted staff requesting that additional
billing or they're requesting additional monies for their monthly payments and
if they cannot receive those, then they would have to use the option in the
I contract that they would give 30 day notice to remove from the contract so we're
bringing it up to the Council to see what they would like us to do with that.
k-7
If they would like to have that additional money for the contract. Do they want
to tell than to go ahead and use that 30 day option. Whatever. A
I
60
II
City Council Meeting - August 14, 1989
representative from Waste Management is here to g ive th e background '
need that additional money. I'm sure she'd like get achance to speak after
sitting here.
Councilman Workman: Can I make a comment?
Mayor Chmiel: Go ahead Tom.
Councilman Workman: We interviewed the candidates this evening for our
recycling committee. My question to the candidates was a negative question and
that question sort of went like this. We basically don't have a contract in
that it's pretty liquid to get in and out of. There's same question as to what
really is being picked up. Cardboard is no longer being picked up. They
wouldn't take my soup cans and tuna cans one day. They're taking newspaper
mainly because they have to. Aluminum they can make money. Glass because it is
recycleable. 25% participation in the City I understand is an accurate figure.
The cost is increasing. At this stage, in the middle of the game, why recycle?
Are we doing any good?
Councilman Boyt: The State requires it. '
Jo Ann Olsen: Are you asking me that question?
Councilman Workman: I was asking the people and it's a question that well you
have to. We have to and I agree and I want to. Why did we bid the process?
Councilman Boyt: The State requires us to recycle. We have to have a plan to
recycle 25% of our solid waste.
Councilman Johnson: The County does. I
Jo Ann Olsen: Yes, and the County doesn't have that control.
Mayor Craniel: The County has that jurisdiction. '
Councilman Workman: Then let me rephrase. If in fact only 25% of us are
recycling, it seems to me that we could find something that might be as
efficient because we have a recycling company going all over our City to only
pick up at one fourth the homes. Obviously what the candidates for this
committee, heavy education backgrounds and that's a word that could get
redundant in all this. As a person who's recycled for a long time, I'm really,
really disappointed. I left a huge box of cardboard out there. I do a good job
at that. One day, next Thursday, the day after, it was in the trash. I can't
dictate the markets and all of that but I guess I can voice my concern that I'm
disappointed in that for how hard we are trying, I don't know that it's working.
And I'd like to hear from our recycling representative.
Lynn Morgan: I haven't been that involved with your contract but a couple of
thoughts. You're education committee or your recycling committee I think will
hopefully help you get more people involved. 25% is kind of low but it's not
that far off for a program that runs every other week. Normally we would expect
a program like that to be somewhere in the range of 27% to 35% tops so it's just
kind of on the low end of what would be standard for a program like that and to
have 1 in 4 households participate in something, on a voluntary basis with no
61 '
, City Council Meeting - August 14, 1989
direct benefit to themselves or with not necessarily a monetary interest in it,
more of an alturistic doing the right thing kind of feeling, is probably a
better participation rate than you maybe get for wearing seatbelts or maybe even
not driving drunk. So yes, it sounds real low but is it really that abisnal? I
think you should work to increase it and to get it up around 35%.
Councilman Hoyt: Could you tell us something about your rate increase please?
Lynn Morgan: Yes. It is a big increase. 'There's no doubt about that. We're
basically looking at a 48 cent increase taking the City up close to $1.35. The
recycling market has changed a lot in the last couple of months and it's going
to change even more in the months to come. Everybody here is probably familiar
with the newspaper articles about one recycling contractor that happened to have
a 50% market share in the metro area. A lot of households under contract,
380,000- 400,000 households by sane accounts, that almost went out of business
and left a lot of cities hanging out there because they couldn't make it. We've
re-examined same of our contracts and feel that some of than are very, very low.
Unfortunately Chanhassen's is one that is very low for us and that we are losing
money on. When we came out here and started the program, it was kind of a cold
start in that the City didn't know exactly what would happen. How many
residents would participate. How easy the City would be to service and we
didn't necessarily know the answers to all those questions either but in the
process of serving this city, we found out that it does cost us a little bit
more than we had thought. In part because there are some almost rural areas
with a very low housing density and it takes those trucks a long time to get out
there. We've also had a dramatic change in the newspaper market. We've
recycled virtually every ton of newspaper that we've picked up. We've managed
to do that. Lost same sleep over it. We actually export some newspaper to
Korea now. Some of our newspaper goes to Wisconsin. Some of it will be going
to the west coast very shortly and same of it stays closer to home in the Twin
' Cities where it's made into Wheaties boxes and Pillsbury cake mix boxes and all
the things that our local industries produce but nonetheless, that newspaper had
been generated revenue for people and has now dropped as has the aluminum so
it's these factors that has led us to seek the increase. I know the numbers are
kind of shocking in terms of an increase but by way of comparison I would call
to your attention for example the City of Shorewood which is a very comparable
contract and which is a Waste Management contract at $1.90 per household per
month. Another very comparable city would be the City of Mound which just
recently signed up a contract with one of our major competitors and I'm led to
understand that that contract is at $1.45. That contract is actually for
' service on a first and third day of the month type basis which amounts to fewer
collections per year than yours actually does so I think it's very, very much in
the range of what is appropriate given what's happened out there with the market
' place and what we now know about the City.
Councilman Workman: Are fewer collections, does that make it more economical?
Lynn Morgan: Not necessarily. If you look at the incremental cost of say
going from every other Friday or every other Wednesday collection, to going to a
weekly collection, you actually, it's not double the amount for example. It's
I actually a smaller amount in addition. What you do find is that on the less
frequent programs, although you can have a lower per household cost, you
generally have a very high per ton cost. When you take that whole city figure
and you divide it out by the number of tons recycled, it's less convenient for.
62
City Council Meeting - August 14, 1989
II
people to recycle on an every other week basis. It's more convenient to recycle
on a weekly basis so you do get more participation and more visibility through I
weekly type programs and that helps get the tonage up which drops the cost per
ton for the program.
Councilman Johnson: If we get the tonage up, would that help with the costing? '
In other words, if you made more money selling more aluminum and more glass.
Lynn Morgan: Would that drop off? 1
Mayor Chmiel: The cost.
Lynn Morgan: No, I don't know the answer to that. I'm sorry. I don't know I
the answer to that question. Aluminum is a money maker for a recycling program.
In fact if you look at the contribution to the overall revenue, aluminum is
generally a very healthy chunk. Unfortunately for where we're all sitting,
II
although we're factoring in some more annual type numbers, aluminum right now is
pretty much at a seasonal low too. It's totaling somewhere around 47-48 cents
per pound. Glass is about $45.00-$50.00 a ton but newspaper is what you tend,
II
as you increase participation to get more and more of and newspaper is a cost
item for most contractors right now.
Mayor Chmiel: Just in that same vein. The market being very soft right now. I
If the market were to pick up and the cost become, your cost become better,
because there's a better dollar volume as far as paper, glass, tin, whatever, is
there a chance that the cost would came back down? I
1 Lynn Morgan: Yes. There is that chance. In fact, if you wanted to, I don't
know how far a want to
yo go tonight. I guess we're hoping to get enough of a
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signal from you that we can all continue this program, at least through the
contract because believe me, we don't, it's not easy to come here and tell
somebody we might have to stop service. That's not something we like to do but
we could for example specify some numbers. What becomes hard is determining a
market indicator for paper. If we wanted to do that for aluminum, we could do
that very easily by identifying, recognize almost Dow Jones type of statistics
that we could all reference but with newspaper, there's no type of number like
II
that. What you would see as the newspaper market improves and as people begin
to generate revenue off of newspaper again is you would see the prices metrowide
for recycling begin to drop again. I hope that when that happens, that people
will remember what happened when people had programs that relied 100% on revenue II
and when the bottom fell out, and look more to revenue sharing type of
arrangements or ones that do reference market indicators so that people don't
get held over a barrel again.
II
Mayor Chmiel: I know that that situation happened to Ramsey County with Super
Cycle going out of the business.
I
Councilman Johnson: I'd like to, if we approve the increase, I'd like to
somehow. I would assume this meets your corporate desires for profitability
which is what everybody works for is profitability. You don't work to lose II
money is what my boss keeps telling me. But this would make you profitable at
the soft part of the market. If the market changes, there is some way that we
can share in that. That there is some fixed part of this contract that we share
II
in gains in the market. Someway that we know how many tonage of aluminum you're
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II . , City Council Meeting - August 14, 1989
1 picking up and how much tons of newspaper and how much tons of glass and what
the revenues you are gaining fram those are. When those revenues over cost
start to, the revenues minus cost start to increase, that we share in that
II increase and it doesn't go to excess profit to develop you into the largest
waste corporation, I think you are.
Lynn Morgan: Which is hard to feel sympathetic for right?
Councilman Johnson: Yes. It's hard to feel sympathetic for a 6 billion dollar
II a year corporation.
Lynn Morgan: i understand the concept of what we call a revenue sharing. I
know you have a different context for that but we call it a revenue sharing type
II contract.
Councilman Johnson: Sounds like a good idea.
IILynn Morgan: In fact, one of our flagship contracts, one of the most famous
contracts in the nation is a program that runs in San Jose, California and
' provides service to about 180,000 homes. It's considered the Cadillac type
program for recycling and under our contract with that city, we do share in, we
specified a range of revenue and when the revenues exceed that range, the city
II participates in that additional revenue. When the revenues fall below a certain
range, the City also participates in that risk. The only concerns I have, and
they're very, they're rooted in...a formula that we use with the City of
Brooklyn Park. A contract that we just started so I'm speaking from a realsitic
II point. It's very hard to allocate to one city their recycleables and the cost
of managing those recycleables. It's very difficult. If we allocate...
Councilman Johnson: Don' t you weigh the trucks?
I Lynn Morgan: Yes. The trucks are weighed and cx3 y v
our city does receive monthly
recycling reports that show you the tonages that were recycled. Those are not
I weighed out by material. In other words, we don't weigh the multi-compartment
truck by newspaper and glass and cans. What we do is we take all of the
recycleables from all of our programs and we say well this month 75% of our
II tonage was newspaper and 13% was glass and this much was tin and so on. Then we
say therefore, that percentage, that proportion applies to all of our contracts.
That's where we get into some real sticky record keeping and we're not 100%
comfortable with the adminstrative energy that is required to sustain a contract
II like that and to document it and keep it all straight.
Councilman Johnson: If you're using those straight formulas like that, I would
Ithink it would be fairly simple to go back to the tonages.
Lynn Morgan: It would if all of our markets paid the same but we're using
1 multiple markets now. What we don't want is we don't want to get a call from
any one newspaper outlet or any one metals outlet that says, hi Lynn. Guess
what? If you want to stay in business, next month you're going to pay me $50.00
II a ton or Lynn guess what? I just had a fire and I'm shutting the gates so do
what you can. You know punt. Those are the calls we don't want to get anymore
and that's why we're using a diverse range of markets each of which has it's own
[::
cost associated with it or it's own revenue associated with it and they not only
IIhave costs associated in what they either invoice us or the check they write us
11 64
City Council Meeting - August 14, 1989 11
I
but we have our internal cost of loading the vehicles and delivering them to
market and that's different for every market we use. That's why I'm saying it's
II
a very, internally it's complicated to document a program like that back to you.
I'm not saying we can't do it by any means but in the way that we would
structure it, I guess that would be our concern would be to keep it simple
enough that we could fulfill it completely with you.
II
Councilman Johnson: I see this town and the people I know in this town being
very environmentally conscience and when the program is going, the education
II
gets going, the committee gets going, I think we'll beat 35% easy at which time
what does that mean to Waste Mangement? Does that mean more profits to them at
$1.45 or whatever it is? I
Councilman Boyt: 35.
Councilman Johnson: $1.35. How does us putting money into the education
I
program to increase the recycling that we want to do and our citizens want to
do, how does that affect you as the supplier of that service? Does it take your
desireable profit margin and make it larger or does it hurt you because you're
II
in a negative situation?
Lynn Morgan: I have to clarify that although it seems incredible that the new
numbers we're talking about are very, very close to break even for us. The II
other work that we've written more recently, for example again Shorewood at
$1.90 and then you look at same of our weekly contracts like Wayzata at $2.35 or
a very, very large contract, the Minnetonka, Golden Valley, Plymouth grouping I
that we signed up recently is at $1.85. As you increase your participation a
couple of things will happen. Your cost per ton will go down: You'll recycle
more and come closer or do more in terms of meeting the County and State and Met
II
Council goals. From our perspective, I think that in the range we're talking
about, we would not see huge differences in our cost. Right now I think we
spend roughly pretty close to 8 hours per collection day in the City of
Chanhassen and then it's 2 days so it's basically 16 hours a week I think. What II
happens right now is that basically the fellas drive past maybe 7 out of 10
houses and stop at 3. As you increase participation, he'll stop at more so his
time out on the street will increase and his truck will fill up faster so he'll
have to spend over, in your case, over 6 months or so, he'll make additional
trips to the processing center that he would not have otherwise of necessarily
made. So those are basically cost increases and will also add newspaper which
is not a profit item.
II
Councilman Boyt: Can I take a minute?
Mayor Chniel: Go ahead Bill. II
Councilman Boyt: This probably isn't to direct any questions your way. I think
you've done a nice job of sharing some things. I think we'd all agree that your
business has a right to make a profit. However, if I read your figures right,
if we have 25% participation, if it's $1.35 a household, that means for each
house you pick tip, it costs $5.45. I would maintain that we can't afford it. I II would suggest that for $56,400.00, which is a close estimate of the annual'cost
given that nothing changes, and we know that's not going to happen, the City can
run maybe a drop off program with a full time person doing nothing but working
II
on recycling of various things in our community and still came out spending less
65
II
IICity Council Meeting - August 14, 1989
money than that and I would propose that we possibly agree to pay the higher
rate for 2 months. In that period of time we gather as much information as we
can including the possibility of hiring a person to do it. Not do actual
pick-up but do education. Every month we extend this, we spend close to
$1,700.00. I'd much rather put that money in an intern doing a study. I think [-
we've had an interesting 4 month experiment and that it has basically said that
we can't afford this type of recycling. I think you're very justified in asking
for enough money to cover your expenses and that should be a clear signal to us
that our city can't afford this. We have too much area with too few people to
run this kind of a recycling program.
Councilman Johnson: We also need to apply for some more grants and stuff to
help us pay for this.
Councilwoman Dimler: I guess I'll go ahead and comment. I did talk to Jo Ann
about this today and I guess I was looking at alternatives too because I thought
it was, although I really have enjoyed the recycling. We've participated in it
and it's been a lot of work but a lot of fun. I think our kids are getting a
real good view too of what they need to do in the future. But again, I think
the increase is too much and I do see Council as being a watchdog over the
citizens' pocketbook but I do want to continue the recycling efforts. One of my
suggestions was that we look for help from the County. Perhaps get on the
agenda for the County Board. Go back to a drop off.
Councilman Workman: More centralized drop off?
Councilman Johnson: Over at the Public Works? Then we drop back to 10%.
Councilman Boyt: I would suggest that t yf we had somebody working on education,
that we may be able to come up with a way to have neighborhood drop offs.
Mayor Chmiel: I think we have sane people that are proposing for the committee
that have education backgrounds that I think would do a good job.
Councilman Boyt: The biggest generator of material for recycling is industry,
not the individual household. What we're dealing with here is really an
education as sort of a sense of participation. We're not dealing with people
that are really, at this point, capable of generating a great deal of material
that's recycleable. I think we're seeing that so maybe we're all sensing this.
That for $56,400.00 we need to do a very careful study of where do we get the
' biggest return, recycling return? I think probably everybody in the Council
recycles every other Wednesday or Thursday, depending on the day but only 1 out
of 4 is doing it.
' Councilman Johnson: trill Carver County is like the only county in the metro
area to make it's goal and primarily made it based on Chanhassen's businesses
and a lot of Chanhassen businesses recycling couldn't be counted because it was
already being done before they set the goals so anything that was already being
recycled couldn't set it so our businesses in this town do a tremendous good and
profitable recycling business. When you look at the printing industry we've got
here in town. They recycle a tremendous amount of paper and Class A grade paper
' versus newsprint. Just to emphasize your point. I'm not sure if I'm ready.to
drop curbside recycling. Eventually it's going to, it's being required. The C
State is requiring communities o'itstate to do curbside recycling as part of
66
City Council Meeting - August 14, 1989 11
their comprehensive planning in the outstate. It's coming. If we're doing it
now, we're going to be required in the future. I think the County may be
willing but they're pretty tight on their budgets, to bring us some money but
they are receiving monies from some of the set asides that are going. I agree.
I may say 3 months instead of 2 months. I think we need to keep this going. I
think we'll get a lot of citizen support for it but it is a lot of money.
Mayor Chmiel: Yes it is, no question. I agree I think I
g with you Jay. 3 months
I think would be more of a time period that I would like to see this done only
because of the committee that we're getting established for them to formulate
and pull together things which could give a good sense of direction for the
City. I think too, educationally wise, this has to be started within the
schools themselves right now. Start talking so the children understand what
it's all about. That message brought home to the parents a little bit more too
of those that are not participating. As you say, there's 3 or 4 that are not
participating for everyone that is. Maybe this is the way we can activate that
to get it going. The other hand I was looking at was going back to our public
safety aspect. Doing what we did before and have the recycling down at our
shop. I just don't see people taking that time out to take it and haul it down
there which is the problem. I
Councilman Workman: Not with 6 limited hours.
Councilman Johnson: No. It'd have to be full time. 1
Mayor Chmiel: So I think I would have tendencies to agree that 3 months I'd
like to sec it continue yet rather than just the 2 because it would just give us
a little better time frame.
Jo Ann Olsen: Fromm August though? August through October? '
Mayor Chmiel: Yes.
Councilman Boyt: The recycling committee and maybe it will be different but I
think most committees take several months to get really rolling. We're not
going to see anything out of them for 6 months in terms of a real active kind
of... 1
Mayor Chmiel: Bill, you didn't meet those people today. They're enthusiastic
as all get out. They know what it's about. They've been there. They've been
recycling for as many years as one had said, for the past 10 years. Strong
advocates on it.
Councilman Boyt: Well I'd like to ccc us go more than a month because I think ,
that's basically cancelling the contract and I think at 2 months we've got time
to come back and extend that if we desire to do that. It's $1,700.00 a month
above what we're paying now. I'd hate to see us commit ourselves to anymore
time than we have to. If we come back in 2 months and say let's stick with it,
okay. But I'd like to think that in 2 months we can get enough information to
make a decision. '
Mayor Chmiel: I don't think we can get that committee to really move that•
quickly within the 2 months to cane up with things.
67
II ' City Council Meeting - August 14, 1989
Councilman Boyt: I don't think the-committee is oin to make the g g th decision for
us and I didn't interview then.
' Mayor Chmiel: But we'll get proper direction from that committee I think [-
because of the positions that they're taking.
1 Councilman Boyt: If we give them 3 months, they'll sure as heck take it. If we
give them 2 months, maybe we'11 have an answer in 2 months.
Councilman Johnson: I've got one more question. Did you figure into your
$1,685.00 recycling, the newspapers within the County as far as there may be a
mandate that all your newspapers are taken to the Co unty newspaper facility?
Lynn Morgan: For newspaper shredding or something like that?
' Councilman Johnson: Right.
Lynn Morgan: No. That's not reflected there.
Mayor Chmiel: And the County is looking at that aspect.
Councilman Johnson: The County is buying the equipment and putting that in and
I believe under certain laws they can say all newspaper from all recycling
programs shall come to us as when the garbage collecters, when they put in the
composting plant. All garbage from the City of Chanhassen will go down to Scott
County and be composted. I'm not sure whether that's going to happen or not.
Lynn Morgan: I don't know myself. I can see why that would be a concern from
your perspective and I guess one option we would have is to write an amendment
of some sort. I don't know if we need a contract amendment or what have you for
what we're talking about doing here tonight anyway but we could write a clause
that would basically say that if that came to pass, that the price would revert
to x which would be a lower price than the increase we're seeking today. So
' that if that reality kicked in and the County did offer that repository, you
wouldn't be locked into a contract with us that was based on a higher cost
assumption you know.
Councilman Johnson: You're saying if that did happen, it would be a lower cost
to us?
Lynn Morgan: If that did happen, that would result, and if it did result in a
lower cost for us, in other words, it would depend on, I wouldn't know yet if
I the County was going to open the doors and say there was going to be a charge
and you had to bring it there but we could write these things in and say that if
these conditions attain, the County offered the site and there were no charge or
the charge were some very small amount and if we could deliver there without
incurring additional costs, then we could revert the price back too. I wouldn't
have a problem with that at all. That's fair.
' Councilman Johnson: Because that may be open shortly. Like next month. They
may be accepting as early as next month. They may be accepting paper down :;,n
[E7
Chaska for that. They've got the building and the equipments' on order. The
County Board has approved the money. If that becomes a reality and that's
actually a cost savings, maybe that will help.
1 68
City Council Meeting - August 14, 1989 -' II
II
Lynn Morgan: That's fair.
Councilman Johnson: But any approval, I think we should have it contingent on, II if it ends up being a cost increased to you, you know we have to have that
within our minds also. Of course that's not the plan of the County to make it
more expensive.
II
Councilman Workman: The way I understand it, a bale of this paper is going to
cost more than straw. I
Councilman Johnson: Yes. It will cost more than a bale of straw. It will
absorb 50% more than straw and you know, economically you have to use 50% less.
A bale of this also will, on a pound for pound basis, it absorbs more than straw II
on a pound per pound basis. A bale of this weighs 50% mote than a bale of
straw. When it gets on down to it, your actual cost is about half of what straw
is according to the studies in Wisconsin, if you can trust than Wisconsin... I
Lynn Morgan: I was born and raised in Madison so I'm really getting it tonight.
Councilman Workman: I'll tell you what Jay, if curbside is stopped and I'm in II
Chaska a lot, there's a place in Chaska. The Guardian Angel's shed off of 1st
Street, down by the dyke, they are paid plenty for their newspaper because those
IIgentlemen down there sort it. It is clean and they are paid for a semi load of
newspaper. People are getting paid for it. Maybe we need that kind of
initiative and that money goes to the church and those guys love it. So there's
ways of doing things I think.
II
A_ Councilman Johnson: What do they do with the glossy stuff?
Councilman Workman: Chuck it. But what's being done with it when it goes into I
our recycling? Are they mixing that all in?
Lynn Morgan: It depends on where it goes. The box board mill, Waldorf at I
Cretin off 94 for example throws it all in the soup. Into a hydropalper which
is sort of like the ultimate blender. They don't have a problem with glossy in
there but those clay coatings do come out as a contaminant out of the system.
II
The newspaper from the United States that goes to Korea or goes to Mexico is
generally put on sorting tables or sometimes just on the floor and people do
pull out that coating material and discard it.
II
Councilman Workman: I'd be interested to find out if the newspapers that do
business in our fine city are using recycleable paper.
Councilman Boyt: From that standpoint, the City ought to be using recycleable II
paper when you get down to it.
Councilman Workman: The City of Chaska does. They have a recycling program. II
Mayor Chmiel: Okay, what's your pleasure?
Councilman Boyt: I would make a motion that the City Council approve I
motion Y pprove a c6ntract
at the higher rate to extend through October.
II
69 I
City Council Meeting - August 14, 1989
11 Councilman Workman: I'll second that.
Councilman Johnson: Are you going to put anything in there about the cost
changes if Carver County requires within that time period- that...
Councilman Boyt: I think it's going to be pretty miriTmal.
Mayor Chmiel: It might not be bad to have in there. Whatever is minimal.
' Councilman Boyt: Okay. I'll accept it.
Councilman Workman: Second.
1
Councilman Boyt moved, Councilman Workman seconded to accept the price increase
for curbside recycling from Waste Management through October with a clause which
will indicate that the City of Chanhassen will receive any cost benefits
resulting from using the new plant which will be opening in Scott County. All
voted in favor and the motion carried.
COUNCIL PRESENTATIONS:
' COMMUNITY SURVEY, COUNCILMAN BOYT.
Councilman Boyt: This should be fairly quick. There's a survey and a cover
letter that I passed out to you.
Mayor Chmiel: Which we've not had a chance to really look at.
Councilman Boyt: No. And all I'm proposing is that we put this on a future
agenda. That you look it over and see if you like the questions. I think
there's some good reasons for doing this and I think we'd be good at it so. I
pretty much laid those out in the memo. I don't think there's a need to take
time to go through it all.
Councilman Johnson: I was just sitting here correcting your typing.
Councilman Boyt: Yes, there's plenty of that.
Councilman Workman: Are you suggesting that we're dividing up the city?
I Councilman Boyt: What I'm suggesting is that the Council would, we'll pick some
neighborhoods and some dates and the 5 of us would go out and hit the
neighborhood.
Councilman Workman: Together?
Councilman Boyt: Yes. We're good at that. Well we wouldn't all go to the same
house. I mean that would be a little overwhelming.
Mayor Chmiel: It'd be amazing to see what the answers would be and how the ,
questions are posed.
1 70