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l�'�, Jy REQUEST FOR COUNCI L ACTI ON Department Approval I tem Descri pti on: D i scuss a Recycl i ng Contract F�ctensi on Date: 2/08/10 Item No.: 13.f Ci ty M anager A pproval � / BACKGROUND Rosevi I I e' s f i v�year contract wi th Eureka Recycl i ng eacpi res at the end of 2010. The contract has been very benef i ci al to the Ci ty both f i scal I y and envi ronmental I y. Eureka Recycl i ng has offered to eactend the contract for two ye�ars unti I the end of 2012 under substantial ly the same terms. I n June 2009 Eureka Recycl i ng approached the City a�lci ng to modify the terms of the contract i n order to share the burden of pl umme�i ng commodi ty pri ces. M arkets for recycl ed materi al s dropped preci pi tousl y begi nni ng i n October 2008, hi t thei r nadi r i n January 2009 and have been ri si ng si nce. Currentl y pri ces for most commodi ti es are about 50-65% of thei r pr�drop l evel s, some have remai ned constant and two have ri sen. H owever, the sky hi gh pri ci ng was wel I above I ong-term pri ci ng trend I i nes and were cl e�arl y unsustai nabl e. Commodi ty pri ces conti nue to trend upward over the past 15 ye�ars and current mark�s appe�ar to be stabi I i zi ng. Rosevi I I e revi e�ved Eureka Recycl i ng' s June proposal and asked for addi ti onal benef i ts to the Ci ty i n exchange for any concessi ons. Eureka Recycl i ng has offered to extend the contract to providestability to Roseville, and to formally agreeto partnerwith Rosevilleon additional envi ronmental programs and i ni ti ati ves. The current mark� does not appe�ar to be a good ti me to be sol i ci ti ng proposal s for recycl i ng servi ce (see Attachment A and Attachment F). I n 2009 four m�ro are�a ci ti es i ssued RFPs for recycl i ng servi ces and two si gned contract eactensi ons. Pri ces went up — some dramati cal I y; and the wi nni ng bi dder' s rate was si gni f i cantl y I ess than any other proposers. So where do we sit? Our col lection rates remai n comp�itive and ne�ar the low end for metro are�a citieswith weekly collection (seeAttachment B). Our revenuesharing has incre�ased substanti al I y si nce i t hi t bottom i n January 2009 (see Attachment C). Our 2% annual col I ec;ti on cost i ncr� i s the I owest rate of any ci ty i n the m�ro area. Si nce June mark� pri ces have been more stabl e, and Eureka Recycl i ng has worked out contract amendments wi th A rden H i I I s, M apl e�vood, St. L oui s Park, and St. Paul . These events have provi ded Eureka Recycl i ng w i th the f i scal stabi I i ty i t was seeki ng when i t f i rst approached Rosevi I le. As a result Eureka Recycl i ng has dropped most of its requests for contract modi f i cati ons — modi f i cati ons that have been accepted by i ts other contract ci ti es. Page 1 of 3