C5438 Amendment 3 Executed.pdf

AMENDMENT NO. 3

TO

CONTRACT NO. 5438

DATED

1 July 2011 Between

TOWN OF GREENWICH

and

City Carting, Incorporated

This is an Amendment attached to, made part of, and incorporated into Contract No. _5438_ made on 3 March 2020 between the Town of Greenwich (TOWN) and City Carting, Incorporated (CONTRACTOR) providing loading, hauling and disposal of Municipal Solid Waste and Management services.

WITNESSETH:

WHEREAS, the TOWN has reviewed the proposal dated 7 February 2020:

The contract shall be amended as follows :

Under Article VI, Section 6.1, Paragraph C, the contract shall be amended as follows:

Effective 04/01/2020, the Town shall pay the contractor a Base Processing Fee (BPF) in the amount of $65.00 per ton for removal of single stream recyclable material.

This BPF amount of$65.00 per ton shall remain in effect through the remainder ofthe current 5-year option (said term being 07/01 /2016 through 06/30/2021).

The Town may exercise its right to extend this contract for one additional 5-year option for the period of07/01 /2021 through 06/30/2026. The BPF amount for the period from 07/01 /2021 through 06/30/2026 shall be $85 .00 per ton in year one with a 3% escalation annually.

If the commodity price for recyclable materials exceeds the base processing fee, the Town and the Contractor agree to a "shared reward" basis for compensation. Under the shared reward program, the Town will receive a credit for 80% of the commodity price above the base processing fee.

The fee used to calculate the shared reward program shall be based upon the commodity pricing as reported in the Market Index obtained from the RISI Pulp & Paper News (Northeast Pricing) - "mixed paper grade".

Under shared reward, the Town shall retain 80% of the commodity value over the base processing fee and the Contractor shall retain 20% of the commodity over the base processing fee.

Under the shared reward program, the total net fee payable to the contractor shall be calculated as follows:

The BPF (base processing fee) will be subtracted from the MR (market rate) and will be multiplied by 80% (0.80) resulting in the Shared Reward Value (SRV).

The SRV will then be deducted from the BPF resulting in the Total Net Fee to be paid to the Contractor.

EXAMPLE: $100.00 (MR)- $65.00 (BPF) = $35 x 0.80 = $28.00 (SRV)

$ 65.00 (BPF)- $28.00 (SRV) = $37.00 (TNF)

As of04/01 /2020, the Town and the Contractor agree to institute a pilot food composting program at no cost to the Town.

All other terms and conditions of Article VI, Section 6 remain the same.

The TOWN and CONTRACTOR agree that this constitutes the entire amendment to the contract.

The TOWN and CONTRACTOR agree that all the original terms and conditions set forth in the contract (No. 5438) dated 1 July 2011 remain intact and in effect.

IN WITNESS WHEREOF, the parties hereto have made and executed this Amendment No.3 as of , 20.

TOWN OF GREENWICH

Commissioner of Public Works

Witness

Ke in alton:#J>resident City Carting, Incorporated

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CJJrf Carting & Recycling ..:;

February 7, 2020

Amy J. Siebert, P.E.

Commissioner of Public Works Greenwich Town Hall 101 Field Point Rd, Greenwich, CT 06830

Dear Amy, Further to our presentation to you in December and the subsequent communications and conversations with yourself and Bill McCormick, please find attached some talking points f rationale for our request to amend the current agreement.

As has been widely publicized for the past several years, the recycling commodities markets have been in a significant downturn since China stopped accepting material. Subsequently, the rest of the Asian markets began to decrease their tolerability for accepting even small percentages of contamination; resulting in the recyclables being shipped to the mills at less than a 2% contamination factor.

These factors, along with other global influences, have driven the value of many of the recyclables to unprecedented depths and in many instances the costs of processing and transportation outweigh the dollar value of the product. This does not mean that the material is transported for disposal; just that the value of the product is a net negative.

As mentioned during our meeting, we believe that the points we discussed will provide for a measure of cost certainty now, which will most likely not exist in July 2021 when the contract between Greenwich and City Carting comes up for price renewal.

1. Recyclables

a. $65/ton charge effective April1, 2020

b. $85/ton charge effective July 1, 2021

I. Maximum of 3% per year based on the CPI index- Urban Wage Earners and Clerical Workers

2. MSW

a. We did not specifically discuss MSW pricing for a new cost proposal effective July 1, 2021 We will address this item in due course, nearer to the expiration date of the current agreement

3. Food Waste

a. A pilot program using 32 gallon toters to collect food waste at the transfer station will be implemented with the following pricing: .

I. Effective April1, 2020 the cost of the program will be included in the $65/ton proposed pricing for recyclables processing

II. Effective July 1, 2021 the cost of the program will be included in the $85/ton proposed pricing for recyclables processing

• If the recyclables processing fee is not accepted, the program may still be implemented with the following pricing:

• $100 per service day +$6 per toter ser:viced

CITY CARTING & RECYCLING 8 Viaduct Rd., P.O. Box 17250 Stamford, CT 06907 Phone: 203.324.4090 Fax: 203.359.8426 Toll Free: 888.413.3344 www.citycarting.net crrJY Carting & Recycling ,!;

4. The market index to be used for the 'shared reward' is the "mixed paper" grade of the RISI Pulp & Paper News {Northeast Pricing) .

The Town shall pay as compensation to the Contractor, the Market Index less the base processing fee quoted {initially $65/ton effective April1, 2020).

At no time will the Town pay more than the base processing fee.

The Town shall retain 80% and the Contractor shall retain 20% of the amount over the base processing fee.

Example ... if the market rate for mixed paper is $100/ton ... the Town will pay to the Contractor a net fee of $37 /ton.

The fee is arrived at as follows:

• $100/ton market rate

• {$65/ton) base processing fee

• =$35 o $35 x 80% = $28 {shared reward)

• $65/ton charge- $28/ton shared reward

• = $37 /ton net fee

Please reach out to me with any questions, comments or concerns.

Kevin, Kevin Walton Vice President of Operations kwalton@citycart.net {917) 560-8892 cell {203) 973-9012 direct City Carting & Recycling 8 Viaduct Road Stamford CT 06907 {203) 324-4090 main

CIJFJY

Carting & Recycl ing •!}

The following excerpts :fi:om regional publications highlight the current state of the recycling industry:

Recycling is becoming so expensive that some towns don't know what to do By David Abel Globe Staff, January 11, 2020, 4:56 p.m.

• Boston, for example, is now paying nearly $5 million to have recycling collections carted away, up from just $200,000 in 2017.

• ... whether they can still afford to collect bottles, cans, plastics, and paper, which have so plummeted in value that in some cases they have become effectively worthless.

• The crisis began two years ago when China announced ...

o That decision has sent tremors through the recycling industry, leading to steep declines in the value of paper, plastic, and other recyclables. The value of cardboard has plunged 70 percent and it now costs more to recycle glass than the company can make selling it.

• "With current commodity prices at historic lows, the sale of those commodities does not cover the cost of processing," said a spokesman for Waste Management, "As a result, new contracts for processing recyclables are typically written to cover the cost

• Municipalities with programs that do not separate their recyclables, so-called single-stream collection, will have to pay on average about $150 a ton over a three-year contract ... those where residents separate paper and plastic into different bins will have to pay nearly $100 a ton over a five-year contract.

Recycling 'crisis' costing Connecticut communities By Christine Stuart, CTNewsJunkie.com

Published 3:12 pm EDT, Thursday, October 24, 2019

• "Municipal officials believe that this recycling crisis will not be resolved quickly," say officials from the Connecticut Conference of Municipalities.

• " ... it's a myth to consider recycling to be a revenue generator,". "Recycling is a great cost-avoidance strategy so long as recycling is less expensive than the cost of disposal."

State recycling efforts struggling as costs rise By Ken Dixon Nov. 28,2019 Updated: Dec.l2, 20191:32 p.m.

• Connecticut's once state-of-the-art recycling system is in disarray ...

Over the last two years ... from to cost centers ...

• Big cost shift due to worldwide collapse of recyclables market o Bridgeport - $130,000 in profits to $394,000 in expenses.

o Stamford -- Now paying $700,000 to process materials, compared to $95,000 in revenue last year.

o Waterbury- Shifting from $15,022 in revenues to $330,000 in expenses.

o Fairfield - A $50,000 profit center last year is now a $525,561 cost.

o Milford - Shifting from $85,000 in revenue to $250,000 in costs.

o Stratford -- A $64,000 profit center is now a $121,000 cost.

o Wilton -- Previously received $20 per ton for recycles and now will have to pay $65 a ton - that is an

$85 per ton swing from a revenue item to and expense item.