2009-02-24_PWETC_AgendaPacket - Laserfiche WebLink

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Revenue Share Summary and Markets Update The amount of revenue that the City of Roseville received in 2008 was significantly higher than in 2007 and over 35% higher than in 2006. The total amount of revenue in 2008 was much higher than projected at the onset of the contract with Eureka Recycling. When Roseville entered into a recycling service contract with Eureka Recycling in 2006, the city began receiving revenue share from th.e sale of the materials collected in their recycling program. for the first time. Since 2006, Roseville has received $336,358.15 in revenue from recycling to continue to invest in the city's recycling or other environmental programs. 200fi Rev 2007 Rev 2~~{1S F~~v 1st uarter $21.,165.32 $22,749.81 $33,159.16 2nd uarter $23,403.59 $27,992.48 $39,090.85 3rd uarter $19,483.86 $30,002.00 547,928.25 4th uarter $22,661.14 $34,551.08 514,170-61 Total $86,713.91 $115,295.37 $134,348.87 2008 Market Review The values of recyclable materials were at historic highs for the first three quarters of 2008. However, significant changes to th.e global economy took effect in the last quarter of 2008. Beginning in October 200$ anal continuing through the beginning of 2009, Eureka Recycling began to see the impact the troubled economy was having on the prices being paid for recycled material. Worldwide demand for recycled cor~~m.odities has decreased by at least one-third and the value of recycled commodities has decreased by about two-thirds across the board. A convergence of weak economies, damaged financial institutions, and an expected market correction led to the price downturn in the last quarter of 2008 which continues in 2009. When and to what extent the recycling markets will recover is difficult to predict. Industry experts do expect that the recovery will be slow as it mirrors the economy. Furth.erm.ore, commodities are not expected to rebound to as high as levels reached in October 2008 because recycling commodity prices were at unsustainable highs at that time and were already trending downward to more sustainable levels. The current state of recycling is not an issue about the viability of recycling. It is a much bigger issue about the economy. The cun-ent recycling economic downturn parallels those of nearly every other industry worldwide including auto manufacturing, housing, construction, publishing, and consumer products. 1n the late 1980s and again in the 1990s the recycling industry sufl•^ered a different kind of economic downturn that lasted a year or less and market demand rebounded: These previous downturns were caused more because the recycling industry had not grown to the point where it was fully integrated into the larger manufacturing market. In those cases, gluts in the amount of material waiting to be recycled caused sharp and sudden price drops