title
Resolution Authorizing an Extension to the Interlocal Agreement Between the City of Wilmington and New Hanover County for the Processing of Recyclable Materials Collected by the City of Wilmington [Budget Impact to Recycling and Trash Services Annual Operating Budget]
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Department: |
Public Works |
Meeting Date: |
6/3/2025 |
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Contact Name: |
Rick Porter |
Public Hearing: |
No |
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Contact Phone: |
910-341-0081 |
Advertising Date/Advertised By: |
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Attachments: |
Resolution, Wilm-NHC ILA with pricing schedule |
PURPOSE:
This purpose of this resolution is to authorize a 5-year extension to the Interlocal Agreement (ILA) with New Hanover County for processing recyclable materials collected by the Recycling and Trash Services Division.
BACKGROUND:
The city collects ‘single stream’ (unsorted) recyclable materials from City Recycling and Trash customers and delivers it to the Materials Recovery Facility (MRF) for sorting, processing and reuse. The city also collects ‘separated’ materials, primarily from the downtown area, that is delivered to the MRF for processing. This ILA defines the pricing structure for single stream and clean/separated materials used in the monthly billing process.
Recycling & Trash Services began using the New Hanover County Materials Recovery Facility for the processing of collected recyclable materials on July 1, 2015 and the current extension expires on June 30, 2025. The MRF is operated by Sonoco Products Company which uses recycled materials in their packaging products, sells the remaining materials, and must dispose of contamination in the landfill.
The single stream pricing structure is linked to the market weighted average price (WAP) of the materials. The WAP varies monthly based on indices by commodity and the composition of materials generated by citizens and the MRF system. New Hanover County will use the same pricing structure for City processing that they are charged by Sonoco and is determined by using a base cost for processing the materials. The baseline processing fee is $118.45 per ton effective July 1, 2025, and will be increased annually by using the Consumer Price Index-Urban Consumers, Garbage and Trash Collection, published by the US Bureau of Labor Statistics, not to exceed 3.5% annually. In the event the CPI adjustment in any given year is less than 3.5%, the actual CPI will be applied. The processing cost is then reduced by the monthly weighted average price (WAP) of the materials. This pricing structure is updated for the purposes of the agreement extension.
Separated/clean Cardboard or ‘Old Corrugated Containers’ (OCC), primarily collected in downtown, is either received at no cost to the city or provides a rebate. A monthly market index determines the rebate rate, which has ranged from $30 per ton to $70 per ton in FY25. The total separated cardboard rebate received by the City through March of FY25 is $6683. This pricing structure remains unchanged from the current agreement.
Similarly, separated glass, primarily collected in downtown, can result in a rebate in positive markets. $1950 has been realized in FY25. Unlike cardboard, glass may result in a charge when markets (or transportation costs) dictate. This pricing structure remains unchanged from the current agreement.
The MRF located in the immediate area of New Hanover County is an asset to the City’s residents, New Hanover County, and our neighboring counties, and since 2015 has diverted more than 67,000 tons of recyclables from the New Hanover County Landfill.
budget
BUDGET IMPACT:
The variability of the market indexes, facility operations and transportation expenses can cause swings in the costs of recycling processing. The recycling industry has moved away from the pricing caps available in past contracts. It is possible that market fluctuations could cause undesirable effects, such as higher than budgeted processing costs. A monthly WAP below $66.45 would result in a disposal cost higher than the landfill disposal cost (currently $52/ton).
recommendation
RECOMMENDATION / ACTION REQUESTED:
Staff requests that City Council authorize the City Manager to enter into an ILA with New Hanover County for a term of five (5) years, at a per ton processing rate to be adjusted monthly based upon commodity pricing as set forth in Exhibit A of this resolution.