To approve a modification to the Memorandum of Understanding between the North Texas Municipal Water District and the Cities of Allen, Frisco, McKinney, Plano, and Richardson regarding the operation of the Regional Composting Program; and authorizing the City Manager to execute all necessary documents. (Modification No. 1) Approved

On April 28, 2016, the City of Plano entered into a Memorandum of Understanding (MOU) between the North Texas Municipal Water District and the Cities of Allen, Frisco, McKinney, and Richardson to accept and process yard debris and produce sellable compost and mulches under the Texas Pure Products brand. The original agreement established a requirement for all four member cities and the City of Plano to deliver all acceptable material collected in their respective cities to a NTMWD compost program facility.  Additionally, the tipping fee could not exceed 85% of the rate charged for the acceptance of solid waste.  Lastly, 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 to offset costs.  The alternative to the compost 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 addition, the Custer Transfer Station is nearing capacity.  Partial member city participation was added to allow member cities to send their curb side yard debris to another provider while still allowing Texas Pure Products to operate at NTMWD facilities.  In order to increase revenue and allow for less truck traffic to the Custer Transfer Station, City of Plano staff negotiated a modification of the agreement with NTMWD and the other four member cities prior to the term completion.

This First Modification of the MOU includes the following: 

• Clarifies that any applicable compost rebate for September 1, 2023 through September 30, 2023 will be distributed to all five Member Cities based on each Member Cities’ percentage by weight delivered to the compost program.

• Defines “Full Participation” as Member City utilizes Custer Road Facility for both deposits of curbside collected yard debris and residential drop off of yard debris.

• Defines “Partial Participation” as only the Member City residents utilize the Custer Road Facility for drop off of yard debris and the City’s curbside collection is taken elsewhere.

• For a Member City to withdraw from Full Participation, requires Plano and NTMWD be provided at least ninety (90) days’ advance written notice to allow Plano to resource accordingly.

• For a Member City to re-enter the compost program under “Full Participation” requires Plano and NTMWD be provided at least one hundred twenty (120) days' advance written notice.

• From October 1, 2023 through December 31, 2023, McKinney will be allowed to deliver some, but not obligated to deliver all, of its yard debris to a NTMWD compost facility.

• Beginning January 1, 2024, McKinney will be a Partial Participant until providing re-entry notice.

• The agreement is retroactively effective October 1, 2023 once executed.

This is a contract where the five (5) member cities of Plano, Allen, Frisco, McKinney, and Richardson agree to increase the tipping fee rate for yard debris delivered to Texas Pure Products. The change will increase expenses to the City of Plano, but will ultimately result in positive net revenue received by Texas Pure Products. The anticipated annual net revenue impact of this item is FY 2023-24 $256,840, FY 2024-25 $256,840 and FY 2025-26 $149,823. All future year expenditures will occur within council approved appropriations.

Approval of this agenda item supports the City's Strategic Plan Critical Success Factor of Excellent, Innovative, and Accountable City Government.