2022-006 Waste Hauler Agreement Status Update and Landfill StrategyDate: January 21, 2022 Report No. 2022-006
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Waste Hauler Agreement Status Update and Landfill Strategy
BACKGROUND:
The City of Denton Landfill, located at 1527 S. Mayhill, opened and began accepting waste from
Denton residents and regional customers in 1984. In October 2019, the City of Denton entered into
Wholesale Waste Hauler Agreements with six (6) entities to ensure adequate disposal capacity at
the City of Denton Landfill in exchange for a guaranteed revenue stream. These type of agreements
are used by landfill operators to ensure a guaranteed revenue stream that helps subsidize
operational fixed costs and minimize the risk of potential revenue shortfall. The landfill seeks to
receive guaranteed, predictable tonnages of solid waste for both revenue and management
purposes. To date, the contracts have realized revenue of approximately $10,000,000 to the Solid
Waste Enterprise Fund.
The existing Waste Hauler Agreements expire in October 2022. Each of the companies, as well as
a few additional regional waste collection companies, expressed an interest in extending the
agreements. As the City looks toward the completion and implementation of its Comprehensive
Solid Waste Management Strategy, it anticipates that it could potentially use the waste hauler
agreements as a mechanism to drive waste diversion across the north Texas region.
DISCUSSION:
North Texas is one of the fastest-growing regions in North America. In the last decade, the
population of Denton has increased by over 30%, which is consistent with population growth in
the North Texas area. As the population of the region grows, so will the need to ensure adequate
and appropriate disposal activity coupled with a robust diversion program generated waste.
Prior to October 2019, the City of Denton provided a preferred disposal rate to four private
companies and one municipality providing 110,000 tons of waste and generating $2.7 million in
revenue annually, accounting for approximately 1/3 of the volume received at the City of Denton
Landfill for disposal. In FY2020/2021, the City of Denton received 198,800 tons of waste from
our contract haulers, generating $4.4M in revenue, accounting for approximately 45% of all the
material brought to the landfill for disposal. The increased revenue realized by contracts allowed
the City to offset long-term debt allowing a rate reduction for residential customers. The total
volume of material brought to the City of Denton Landfill by city forces, waste haulers, and direct
haul customers, including members of the public, increased by approximately 56% due to regional
growth and the reduction of disposal capacity in north Texas over the past two (2) years.
The City of Denton is committed to the diversion of waste from ultimate disposal. Currently, the
City diverts approximately 28% of material collected from residential and commercial customers
in the City, consisting of single stream material (paper, plastic, metal containers, and cardboard)
and yard waste. As the City looks to increase its diversion potential with the creation and
Date: January 21, 2022 Report No. 2022-006
implementation of the Comprehensive Solid Waste Management Strategy (CSWMS), staff will
examine opportunities to increase diversion across the scales through incentives, partnerships, and
contracts.
Anecdotally, staff are aware that most, if not all, of the communities serviced by the Contracted
Waste Haulers also support a residential curbside recycling program. Staff does not have current
information, however, related to how much waste is diverted from these communities. As the City
evaluates opportunities to increase community diversion, it is believed that renewed contracts,
coupled with financial incentives to drive increased regional waste diversion as well as provide a
guaranteed revenue stream for the Solid Waste and Recycling Department (SWR). Should Council
direct, a part of this potential revenue could be earmarked to implement and support programs
envisioned within the CSWMS.
Future contract provisions could include:
a limited volume of waste to be sold at the incentivized rate
o diverted material volumes could be “added” to a contractor’s volume commitment
as an offset
a higher minimum rate for inclusion in the program
incentive rates for diverted material
o program recyclables
residential and commercial
yard waste
o increased cost for commercial and demolition waste disposal
Similarly, SWR would like to include performance provisions in the waste hauler agreements that
would allow staff to assess administrative penalties, up to and including potentially cancel
contracts, for servicing commercial and roll-off accounts. This activity is currently prohibited by
the City of Denton Code of Ordinances, but is difficult to enforce.
SWR will continue to provide updates as we work to continue discussing contracts with future
haulers. Lastly, the overall financial impacts of the agreements will be discussed during the
FY 2022-23 budget process.
STAFF CONTACT:
Brian Boerner, Solid Waste
REQUESTOR:
Staff Initiated