Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Second Modification of Memorandum of Understanding Between the North Texas Municipal Water District and the Cities of Allen, Frisco, McKinney, Plano, and Richardson Regarding the Amended and Restated Regional Composting Interlocal Agreement
Summary
COUNCIL GOAL: Operational Excellence
(2.1: Balance available resources to accommodate the growth and maintenance needs of the City);
Enhance the Quality of Life on McKinney
(5.3: Develop sustainable quality of life improvements in the City of McKinney; 5.4: Promote environmental stewardship initiatives)
MEETING DATE: February 17, 2026
DEPARTMENT: Public Works
CONTACT: Steve Tilton, Assistant City Manager
Ryan Gillingham, Public Works Director
Eric Hopes, Sr. Environmental Services Manager
RECOMMENDED CITY COUNCIL ACTION: Approval of Resolution
ITEM SUMMARY:
Resolution authorizes the City Manager to Execute a Second Modification of Memorandum of Understanding between the North Texas Municipal Water District and the Cities of Allen, Frisco, McKinney, Plano, and Richardson regarding the Amended and Restated Regional Composting Interlocal Agreement.
BACKGROUND INFORMATION:
• The City of McKinney coordinates the composting of yard waste with the North Texas Municipal Water District (NTMWD) and the Cities of Plano, Richardson, Frisco, and Allen. McKinney’s contractor collects yard waste and delivers it for composting primarily to Living Earth (LETCO) in Celina. Residents may also drop off yard waste at Texas Pure, located at the Custer Road Transfer Station, or at LETCO.
• The City of Plano, acting as a contractor to NTMWD, operates Texas Pure, which collects yard waste and composts the material for resale to residents and the general public.
• The City of McKinney entered into its initial MOU with NTMWD in April 2003. The agreement was amended and restated on April 24, 2016, and again on October 1, 2023, and is currently in effect through April 30, 2026.
• On November 21, 2023, the City entered into an agreement with LETCO to process yard waste collected by the City’s contractor. As a result, most of McKinney’s yard waste is now processed at this facility, though residents may continue to use the Texas Pure drop-off location.
• With the agreement set to expire on April 30, 2026, the five member cities and NTMWD are proposing to amend and renew the agreement through September 30, 2030.
• The highlights of the changes to the MOU are as follows:
o The agreement is extended through September 30, 2030, which aligns with the end of the City’s agreement with Living Earth.
o NTMWD and Member Cities agree to participate in and complete negotiations by September 30, 2028, for any future operational changes to the Program.
o The increase in the drop-off rate is limited to the lesser of CPI or 5%.
o At the conclusion of each fiscal year, Plano will compare total Program revenues to total expenditure.
§ If revenues exceed expenditures (year-end surplus):
• Plano will calculate the surplus and report the amount to the Member Cities.
• Plano and the member cities will work to identify the appropriate use of the surplus funds.
§ If expenditure exceeds revenues (year-end deficit):
• Plano will calculate the deficit and allocate the shortfall among the Member Cities on a pro rata basis, based on each city’s Acceptable Material (by weight) delivered to the Facility during the fiscal year.
FINANCIAL SUMMARY:
• Since the City utilizes LETCO for most of its composting needs, the financial impact of the proposed modified MOU on the City of McKinney is minimal. The current processing rate at LETCO is $33.08 per ton, compared to $40.03 per ton at Texas Pure.
• Funding is available is account 007-4405-503-8516
BOARD OR COMMISSION RECOMMENDATION:
• N/A