1D, Eureka Contract Payment Terms Discussion

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~ ~~HILLS MEMORANDUM DATE: March 30, 2009 TO: Mayor & City Council FROM: James Lehnhoff, Community Development Director SUBJECT: Eureka Contract Payment Terms Discussion Action ReQuest Review the recycling contract with Eureka and provide direction to staff on a proper course of action regarding the payment terms. Back2:round In January 2008, the City signed a new contract with Eureka Recycling to provide residential curbside recycling services from March 1, 2008, to March 1, 2011. The previous contract with Waste Management expired at the end of February 2008. The contract with Eureka provides residential curbside recycling services to all single family homes (Hunter's Park condos, Parkshore apartments, Cottage Villas, and Arden Manor contract separately for recycling services). The program is funded through an annual fee included with the property tax statement and supplemented by the SCORE grant from Ramsey-County. The contract includes provisions for a monthly fee per household and for revenue share. A recent and steep drop in market prices for recyclable materials has brought to light a difference between Eureka and the City on the payment terms in the contract. Payment Terms Section 6 of the Eureka Contract describes the payment terms (page 7 of Attachment A). The payment terms are subdivided into two parts: 6.1 Compensation to Contractor and 6.2 Materials Sales Revenue Share. The first line of section 6.1 states the "City Agrees to pay Contractor $2.95 per residential dwelling unit per month in 2008 for weekly curbside collection, processing City of Arden Hills City Council Meetingfor March 30,2009 \\Ahdocsl\ah\AHdata\Planning\Recycling & Garbage\2009\033009 - CC Report - Eureka Contract Discussion.doc Page 1 of 4