Title
Consider/Discuss/Act on Authorizing Amendment No. 2 to the License Agreement with Waste Connections, Lone Star, LLC.
Summary
COUNCIL GOAL: Operational Excellence - 2B: Balance Available resources to accommodate the growth and maintenance needs of the city.
MEETING DATE: May 4, 2021
DEPARTMENT: City Manager’s Office
CONTACT: Steve Tilton, Assistant City Manager
RECOMMENDED CITY COUNCIL ACTION:
• Approve ordinance
ITEM SUMMARY:
• The ordinance would approve a 2nd amendment with the City’s refuse & recycling carrier, Waste Connections. Upon completion, the amendment will allow for the following increases to three (3) different components of the agreement:
o Residential Collection: $1.60 increase per month per home
o Commercial Collection: 25% increase over three-year period (10%, 10% and 5%)
o Downtown Collection amended as follows:
• Low - $63.30
• Moderate - $279.84
• High - $583.49
• Waste Connections will be required to increase their performance bond from $1,000,000 to $2,000,000.
• Waste Connections will no longer be required to make a minimum recycling revenue payment to the City.
BACKGROUND INFORMATION:
• Relationship with original company (IESI/Progressive Waste Solutions) dates back to 1996. (Through subsequent mergers and acquisitions, parent company is now Waste Connections.)
• Current contract agreement executed in 2008 with termination in September 2017, amended in 2013 extending expiration date to September 30, 2024.
• Since 2008, eight (8) contract service fee increases approved based on CPI-U (*).
• McKinney has not increased its collection rate ($15.36) to residents since Oct. 1, 2006.
• 2016 - Waste Connections merged with Progressive Waste Solutions and Waste Connections took over management of the agreement.
• 2018 (Feb.) - City receives request from Waste Connections for rate increases. (Similar request made to Frisco, another full-service customer of Waste Connections)
• 2018 (March) - Per Council direction, City retains services of Burns & McDonnell to analyze the request and provide a market perspective/recommendation.
• 2018/2019 - Staff and BKD (Audit Firm) conduct financial review/assessment.
FINANCIAL SUMMARY:
• As part of the amendment, the City will make a one-time payment to Waste Connections in the amount of $705,922. Funds for this payment will be drawn from the City’s Solid Waste Fund.
BOARD OR COMMISSION RECOMMENDATION:
• N/A