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Home My WebLink About15.F.2. 2003 Refuse Processing Refund IS'. F. J-. City of Shakopee CONSENT Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Tracy Schaefer, Assistant to the City Administrator SUBJECT: 2003 Refuse Processing Refund MEETING DATE: March 16, 2004 Introduction City Council is asked to approve distribution ofthe state-processing rebate to Shakopee residents serviced through the City refuse contract with Dick's Sanitation with a one-time rebate on each customer's bill. Background As part ofthe garbage contract, Dick's must process (bum) refuse collected within the city. In order to keep the processing costs lower, since it is more expensive than to landfill, the city negotiated a separate processing agreement with Hennepin County. The Hennepin County contract names the city as the hauler rather than Dick's Sanitation to take advantage of certain state laws/programs. One of the state programs gives haulers (not necessarily the city) $5/ton for garbage that is processed rather than land filled in an attempt to reduce the amount of land filling in the state. Shakopee has taken advantage of this program for 2 years now. In 2003, each resident received $2.28 for 2002 season. In2003 for Shakopee's efforts in processing, its residents (8,379 homes) have received $21,520.07 in processing rebates. (Attached is a copy of the 4th quarter processing fees the city of Shakopee has received for 2003.) ALL proceeds must go back to the residents, so these funds cannot be used to offset city programs like Clean Up Day. Due to the large number of residents, the decision was made in 2002 to collect all the checks (see attachment) and refund the residents annually. If Council concurs with staff's recommendation, the rebates will appear on resident's April/May Dick's refuse bills. Staff has not recommended lowering the "overall" contract refuse rates, due to the uncertainty of state programs and budget cuts. Budget Impact No budget impact will occur, since the state allows for administrative costs for refund distribution to be taken from the rebate money. Dick's Sanitation will charge the city $500 to rebate the money to the residents, since this was not included as part of the refuse contract. The city or SPUC do not have the ability to refund the money to the residents as easily or cost effectively as Dick's. 1 Action City Council is asked to approve distribution of the state-processing rebate to Shakopee residents serviced through the City refuse contract with Dick's Sanitation with a one-time rebate on each customer's bill. . 2 * rr~' SCOTT COUNTY v:~ COMMUNITY DEVELOPMENT DIVISION 'Scott ENVIRONMENTAL HEALTH DEPARTMENT GOVERNMENT CENTER A-104 200 FOURTH AVENUE WEST SHAKOPEE, MN 55379-1220 March 3, 2004 Tracy Schaefer Management Assistant City of Shakopee 129 Holmes St. S. Shakopee, MN 55379 Dear Ms. Schaefer: The 2001 Legislature has created a Mixed Municipal Solid Waste Processing Payment Program for counties in the state that process waste. Processing is defined as mixed municipal solid waste that has been burned for energy recovery or processed into useable compost or refused derived fuel. The language that was enacted into law as Special Session 2001 Chapter 2, section 124 reads: Sec. 124 [115A545] [MIXED ~UNICIPAL SOLID WASTE PROCESSING PAYMENT] Subdivision 1. [DEFINITION] For the purpose of this section, "processed" means mixed municipal solid waste that has been: (1) burned for energy recovery; or (2) processed into usable compost or refuse derived fuel. Subd. 2. [PROCESSING PAYMENT] (a) The director shall pay counties a processing payment for each ton of mixed municipal solid waste that is generated in the county and processed at a resource recovery facility located in Minnesota. The processing payment shall be $5 for each ton of mixed municipal solid waste processed. I am enclosing a check for the period of October, November, and December of 2003 in the amount of $7,419.89. All funds received must be used to reduce the cost of solid waste collection and cannot be used for any other purpose. For instance, the enclosed check must be receipted to the same account that pays for t~e waste hauling contract currently in place within your municipality; rather than this check being applied to ~ny other purpose or expense. If you have any questions, please feel free to contact me at (952) 496-8473. SF~ (; ~ ,.. , ' I.. !~ J~eGt~~r enclosure An Equal Opportunity/Safety Aware Employer City of Shakopee Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Tracy Coenen, Assistant to the City Administrator SUBJECT: State Processing Rebate MEETING DATE: January 15,2002 Introduction City Council is asked to approve distribution of the state-processing rebate to Shakopee residents serviced through the City refuse contract with Dick's Sanitation. Background Dick's is required by the City garbage contract to process (bum) garbage, rather than landfill it. Although processing was more expensive, the previous City Council felt processing was more environmental sound, and would help avoid future lawsuits to clean up the landfills. In an effort to reduce processing fees, the previous City Council entered into a 5-year processing agreement with Hennepin County for a lower ($611ton rather than $63/ton) tipping fee. Tipping fees are what Hennepin County charges Dick's Sanitation (city customers) to process garbage at the Hennepin County Processing facility. City staffbecame aware that the state approved legislation to reduce tipping fees $5/ton ($61/ton to $56/ton) for refuse that is being processed over the next 5 years. Although the state thought that it could provide a $5/ton reduction for each ton of garbage that is processed, in the current light of the state budget, city staff is not sure if the processing rebate money will exist in the future. City staff applied for the money and has already received $2,940. We believe that the City will receive another comparable check for the remainder of2001, thus giving the City roughly $6,000 to return to Shakopee residential garbage customers. After reviewing the legislation with the state and attorneys, staff has become aware that the money can ONLY be used to reduce tipping fees (customer's bills). It cannot be used for items like Clean Up Day or other city projects. Recommendation Rather than permanently reducing the 5,172 Shakopee customer's garbage bills, due to the uncertainty of the state legislature, city staff recommends that the City Council reduce each customer's bill with a one-time rebate. After speaking to Dick's Sanitation, Dick's can reduce the amount on each customer's bill, thus reducing the administrative costs of ~ 1 mailing a separate check. If City Council concurs with staffs recommendation, Dick's would let staff know the total administrative cost to issue the rebate, and that amount would be deducted from the amount returned to the residents. If the processing rebate survives the cuts of the state legislature, city staff would recommend that the City Council issue a one-time yearly rebate on each customer's bill each year if that is available, thus avoiding having to increase customer's bills if the money is not made available to the City. Action Requested City Council is asked to approve distribution ofthe state-processing rebate to Shakopee residents serviced through the City refuse contract with Dick's Sanitation with a one-time rebate on each customer's bill. Tracy Coenen Assistant to the City Administrator 2