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has dramatically changed since 2005 and the City should expect higher costs in the future. The City has essentially two options to consider, including: 1) extending the current contract with Waste Management, or 2) pursuing an RFP for recycling services. The following is a brief discussion of each option. Option 1: Extending Current Contract Staff met with Waste Management to obtain quotes for a contract extension. As an aside, the current contract price is $1.70, which has been adjusted for inflation and a fuel escalator. Waste Management provided the following pricing for 2010 which includes a base price and the addition of an RMO (Recycling Materials Offset fee) used in order to recoup the cost of sorting in a down market: Dual Sort: $1.78 plus a 6% environmental charge, plus RMO (Recycling Materials Offset fee) for a total cost of $2.50 per household. No additional bins or carts would be required. Single Sort: $2.01 plus a 6% environmental charge, plus RMO for a total cost of $2.63 (City Carts) per household. This number assumes that the City would purchase the rolling carts from Waste Management ($55 per cart x 6,300 carts = • $346,500). Single Sort: $2.70 plus a 6% environmental charge, plus RMO for a total cost of $3.41 (WM Carts) per household. This number assumes that Waste Management provides the rolling carts to residents. Waste Management has stated they now charge a 6% environmental fee in order to recoup fees charged by the State and County for processing. Waste Management also incorporates an RMO, recycling materials offset, fee which is charged depending on the market price of materials. When materials reach a price point, roughly $60.00 per ton, the RMO would be removed and the base price plus the 6% environmental charge would be our true cost. If we did negotiate with Waste Management to extend the contract for another year our hope would be that price points for recyclables would be over $60 by the end of the year. This would eliminate the RMO and keep our recycling fee down. New Brighton also has the option for a RFP in order to gage what other prices and options are available. Staff believes we will not find a better price at this time due to the down market than Waste Managements. Option 2: Pursuing an RFP The City may also do an RFP to see what types of services and pricing would be offered. The City could ask for both single -sort and dual -sort proposals. If the City did HARecycling info\Recycling Contract Worksession racmo (GF Final Edits),doc