Ann Arbor Retains RecycleBank Contract

At its Sept. 19, 2011 meeting, the Ann Arbor city council considered but did not approve a resolution that would have ended its 10-year contract with RecycleBank, a company that organizes a program to provide incentives to residents to set out their single-stream recycling carts for curbside collection. The contract has been in place for a year.

Instead, a substitute resolution was put forward directing the city administrator to negotiate a contract revision offered by RecycleBank that would reduce the per-household charge by about one-third, from $0.52 to $0.35 – which translates into a monthly payment reduction from $12,400 to $8,371. Under the new to-be-negotiated contract, if the tonnage of recyclables collected increases above current levels, RecycleBank could earn an additional $50 per ton, for each ton collected above existing levels. There would be a cap of $150,000 per year.

The resolution to cancel the contract had been postponed from the council’s Aug. 4 meeting. The cancellation resolution indicates termination would have given savings to the city of $149,167 per year on that contract. RecycleBank would have been entitled to $120,000 for the depreciated cost of equipment in recycling trucks as part of this program.

The impetus for canceling the contract had been based in part on skepticism that the first year’s worth of data really showed a measurable positive impact on recycling in Ann Arbor due purely to ReycleBank’s coupon incentives.

The interest in canceling the contract was also based in part on a desire by some councilmembers to find replacement revenue to fund a $107,042 annual increase in the contract with Recycle Ann Arbor (RAA), the company that the city hires to empty the curbside recycling carts. That increase was seen as necessary due to the financial stress under which RAA was operating, exacerbated in part by the lower-than-expected value of the contract with the city. The city deployed fewer curbside carts citywide than projected, and because RAA’s contract was based in part on the number of carts deployed, it received less revenue than had been forecast.

The financial stress at RAA may have played a role in the replacement a few weeks ago of its CEO, Melinda Uerling. The RAA website now lists Kirk Lignell in that position.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]