Meeting Notice and Agenda
An Ordinary Meeting of the Bega Valley Shire Council will be held at Council Chambers, Biamanga Room Bega Valley Commemorative Civic Centre
In accordance with the resolution of Council 20 September 2017, this section of the agenda will be chaired by the Mayor
S.1 Container Deposit Scheme Refund Sharing Agreement........................................................... 4.
10 October 2018
S.1 Container Deposit Scheme Refund Sharing Agreement....................................... 4
Council 10 October 2018
Refund Sharing Agreement between Council and Re.Cycle Operations PTY Limited (ACT).
Director Assets and Operations
Recommended that Council endorse the refund sharing agreement reached with Re.Cycle Operations Pty. Ltd noting a 15% return to Council and no increase in gate fees.
Under Council’s waste collection services contract, Cleanaway are responsible for all costs associated with transport and sorting of kerbside collected recyclables. Cleanaway currently transport recyclables to a materials recovery facility (MRF) in Hume, ACT. Under both the ACT and NSW container deposit scheme (CDS), if Council and the MRF wish to access refunds from kerbside collected recyclables, Council must enter into an approved Refund Sharing Agreement (RSA) made directly between the MRF and Council.
RSA’s are intended as a transitional arrangement to ensure the value of eligible containers collected is distributed fairly between the MRF and Council in the early stages of the CDS. In the future, it is expected that the value of the CDS will be fully incorporated in gate fees offered by MRFs in a competitive market.
Council has been in negotiations with Re.Cycle Operations PTY Limited (the MRF) to negotiate ‘fair and reasonable’ terms, as set out in the Waste Management and Resource Recovery (Processing Refund Protocol) Determination 2018. Under the ACT CDS, the ACT Government must also approve any RSA between a NSW Council and the MRF. Council had until 28 September 2018 to register an RSA with the ACT Government or alternatively not have any refund in place. Given the timeframe available to reach an agreement the General Manager authorised an agreement to be put in place which provided the lowest risk option to Council with no potential negative budgetary impact.
RSA’s have become more complicated as a result of China’s National Sword Policy as there has been a significant increase in the gate fee per tonne for recycled material collected via the kerbside system to offset the losses due to sharply reduced commodity values. Cleanaway have indicated an intention to pass this significant gate fee increase through to Council, a situation that Council has indicated it will not accept. MRF operators recognising this and have looked at ways to offset the increased gate fee against the RSA.
A range of options were provided to Council by the MRF ranging from low to high risk, with low risk being the favoured option by Council. This option saw no increase in the gate fee for recycled material and offers Council a 15% return on eligible containers through the scheme.
The higher risk options included a higher return from the CDS coupled with an increased and variable gate fee for recyclable material. A gate fee increase would see Council entering into contractual negotiations with Cleanaway which may have become costly and drawn out. Furthermore, the gate fee increase would need to be recovered by way of increased waste charges.
Financial and resource considerations
Council has adopted waste charges within its 2018-19 Revenue Policy. There is therefore no ability to increase waste charges to recover the increased gate fee this financial year. An increase of $60 per tonne as previously indicated in correspondence from Cleanaway would require Council to recover approximately $250,000 annually through increased domestic waste charges. It was therefore considered more advantageous to fully offset this cost against the value derived from the CDS.
Council is bound by the Waste Management and Resource Recovery (Processing Refund Protocol) Determination 2018 for the duration that recyclables continue to be delivered to the ACT. Approval was granted by the ACT government for the RSA on 28 September 2018. This approval is subject to periodic review as is the agreement between Council & Re.Cycle Operations PTY Limited.
Impacts on Strategic/Operational/Asset Management Plan/Risk
Council’s draft waste management strategy “Recycle the Future” identifies the potential benefits of a local MRF. Obtaining better value from the CDS is one of those potential benefits.
Environmental / Sustainability
The RSA ensures that the kerbside recycling service continues to deliver sustainability benefits at no increased cost to the ratepayer.
Council has adopted a low financial risk approach in this instance, however it is intended that a better understanding of the value of the CDS will be obtained through kerbside recycling audits over the next twelve months to assist in future negotiations and decision making.
1⇩. IC17 0000075 2017.08.16 Council Report No 12 Container Deposit Scheme