On April 28, 2016, the City of Plano entered into an Interlocal Agreement (ILA) with the North Texas Municipal Water District (NTMWD) to be the contractor to process yard debris and produce sellable compost and mulches under the Texas Pure Products brand. The original agreement established a tipping fee of $23.27 per ton received from each member city of Allen, Frisco, McKinney, Plano, and Richardson. This tipping fee rate increases were based on CPI but capped at a 3.5% maximum rate adjustment per year. Additionally, the quarterly rebate received from the Texas Commission on Environmental Quality (TCEQ) was distributed to each city based on the contributing tonnage delivered to the program.
The Texas Pure Products compost operation is the lowest cost alternative for processing yard debris for the City of Plano. The program receives residential yard waste through curbside pickup and drop-offs and then processes the material into compost and mulch that is sold to generate revenue. The alternative to a composting program would involve the collection and landfilling of yard debris without any revenue source other than increased residential rates to cover the collection and landfilling costs.
With the increase in fuel and other costs over the last several years, the rate structure was falling behind the cost of operation. In order to correct the balance, City of Plano staff negotiated a modification of the agreement with NTMWD and the other four member cities, prior to the term completion, to increase revenue to the composting program.
This First Modification of the ILA includes the following:
- The yard waste processing fee increases from $27.57 per ton in FY2023 to $35.80 per ton in FY2024 for full participation of all five Member Cities and $37.95 per ton for full participation of less than all five member cities. The processing fee for food waste disposal at the 121 Regional Disposal Facility will decrease from $8.89 per ton in FY2023 to $7.50 per ton in FY2024.
- Rates will be adjusted annually to meet Plano’s anticipated financial needs of the compost program by removing the 3.5 percent cap on yearly rate increases. Instead, yearly rate increases will be capped at a higher limit of 3.5 percent of the prior year rate or the percentage increase in the September Consumer Price Index for All Urban Consumers in the Dallas Fort Worth metropolitan area compared to the prior September.
- Effective October 1, 2023, Plano will receive 100 percent of any applicable TCEQ quarterly compost rebate instead of all five Member Cities which will increase revenue by approximately $70,000 per year.
- Profit/Revenue share component will continue.
- The agreement will be retroactively effective October 1, 2023 when executed.
Failure to approve this modified Interlocal Agreement between the City of Plano and the North Texas Municipal Water District in combination with the modified Memorandum of Understanding between the City of Plano, the North Texas Municipal Water District, and the four member cities of Allen, Frisco, McKinney, and Richardson, presented as a separate Agenda Item, will result in less revenue to the compost operation and higher costs to the City of Plano.