TAMRMS#: B06
9.1
REQUEST FOR DECISION
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EPR Agreements - CAO Authority
Presented by: Tim Saunders, Director, Public Operations
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RECOMMENDED MOTION(S)
recommendation
That the Chief Administrative Officer to authorized to execute compensation agreements with Producer Responsibility Organizations on terms acceptable to the Chief Administrative Officer.
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SUMMARY
Alberta’s Extended Producer Responsibility (EPR) Regulation came into force on November 30, 2022. EPR shifts the physical and financial burden of collecting, sorting, processing and recycling materials to the producer and away from local governments and taxpayers. The Alberta Recycling Management Authority (ARMA) is the designated organization that is providing oversight of EPR systems. A producer responsibility organization (PRO) is a business established to contract with producers to provide collection management and administrative services.
The City of St. Albert negotiates with the PRO to establish agreements that shift the burdens away from ratepayers to place this responsibility on producers in accordance with legislation. The agreement with the PRO provides financial compensation to the City to cover the City’s cost to deliver service and transfers the financial liability from rate payers to the producers.
The recommended motion will authorize the Chief Administrative Officer (CAO) to execute compensation agreements with PROs on terms acceptable to the CAO, to include imminent agreements and those in the future pertaining to EPR.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
N/A
BACKGROUND AND DISCUSSION
Alberta’s Extended Producer Responsibility (EPR) Regulation came into force on November 30, 2022. EPR shifts the physical and financial burden of collecting, sorting, processing of recycled materials to the producer and away from local governments and taxpayers. EPR systems will be operational on April 1, 2025 for registered communities, which had existing service as of November 30, 2022. This applies to the City of St. Albert.
At implementation on April 1, 2025, Alberta will have 2 EPR systems:
1. single-use products, packaging and printed paper products (PPP)
2. hazardous and special products (HSP).
PPP includes the following materials from the residential sector:
• paper products such as newspapers, packaging, cardboard, printed paper and magazines
• plastics (both rigid and flexible)
• metal and glass containers.
Alberta’s EPR framework does not include PPP from the industrial, commercial and institutional sectors. PPP materials regulated under existing regulated stewardship programs (beverage containers, tires, paint, electronics and used oil materials) are not included in EPR PPP to avoid duplicating requirements.
HSP products include:
• consumer-sized solid, liquid, and gaseous products that are flammable, corrosive, and toxic
• batteries
• pesticides.
The system does not include HSP products sold in industrial sizes. HSP materials regulated under existing regulated stewardship programs (beverage containers, tires, paint, electronics and used oil materials) are not included in EPR HSP to avoid duplicating requirements.
Alberta is focused on the successful implementation of the PPP and HSP systems at this time. Additional materials may be considered for EPR in the future.
The Alberta Recycling Management Authority (ARMA), which has managed regulated recycling programs for used oil, paint, tires and electronics in Alberta for more than 30 years, is the designated organization that will provide oversight of Alberta’s new PPP and HSP EPR systems.
A producer responsibility organization (PRO) is a business established to contract with producers to provide collection management and administrative services to help producers meet their regulatory obligations under the Regulation.
While the EPR legislation has the ability to transfer the physical burden of the PPP and HSP systems to the producers and ultimately the PROs, the defined minimum service levels of the legislation do not align with current services defined with the City’s service level inventory. In order to maintain services defined within the service level inventory, Administration has elected to remain responsible for completing the requirements of the recycling of products within the PPP and HSP systems, both internally and through existing contracted service providers, but will receive financial compensation through the PRO, to transfer the financial liability from rate payers to the producers.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
N/A
IMPACTS OF RECOMMENDATION(S)
Currently, the City of St. Albert has chosen to remain in control of recycling collection by opting-in and using existing contracts to collect curbside recycling. The PRO will compensate the City for the costs of providing this service at the negotiated rate and by using their compensation methodology in order to remain consistent with all partners, ensuring neither side is subjected to a financial burden. Should we enter into a new agreement with a service provider at the end of the current agreement, the PRO has advised that it should be no longer than 2.5 years with an option for an additional 1-year extension.
Financial:
Should the new agreement with a service provider be higher than anticipated, the additional costs will not be covered by the PRO. Should the costs be lower, the contract with the PRO will be amended with lower costs.
Some of these agreements will exceed $100,000 therefore the CAO will have the authority to collect revenue over $100,000.
Compliance & Legal:
Agreements with PROs are categorized as “revenue contracts.” The Chief Administrative Officer Delegations Council Policy C-CAO-01 authorizes the CAO to enter into revenue contracts, exclusive of grant or rebate type agreements, provided that the anticipated annual revenue to the City does not exceed $100,000. The value of the EPR agreements with PROs is expected to be higher than $100,000 per year; therefore, the CAO is required to receive approval from Council to enter into these agreements on behalf of the City of St. Albert.
Negotiations with the PROs are ongoing. If Council would like to receive specifics about the ongoing negotiations, it is recommended that this discussion take place in camera on the basis of sections 23(1)(a), 24(1)(a), and 24(1)(c) of FOIP. An in camera motion is recommended as follows:
That Council move in camera to discuss a matter pursuant to sections 23(1)(a), 24(1)(a), and 24(1)(c) of the Freedom of Information and Protection of Privacy Act.
Program or Service:
None at this time.
Organizational:
None at this time.
Risks
The agreement with the PRO indicates that they will not cover higher costs of providing service should our supplier increase costs. While this risk is low, this overage would be covered by the utility rate payer. Should the cost of providing service decrease, compensation from the PRO would also decrease. Both the City and the PRO are considered non-profit, so the agreement is intended to keep both parties whole.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
N/A
ALIGNMENT TO SERVICE DELIVERY
C.4.1 Solid Waste Collection - weekly collection of recycling
IMPACTS OF ALTERNATIVES CONSIDERED
ALTERNATIVE 1: Do nothing.
The City chose the ‘opt-in’ option to ensure current service levels are maintained. An ‘opt-out’ option was also available which would see all costs facilitated by the PRO; however weekly service was not guaranteed. Should the CAO not be authorized to sign the agreement with the PRO, the economic cost of the recycling collection program would remain with the utility rate payer.
Financial:
The utility rate payer would continue paying the recycling rate until such time as the rate is removed.
Compliance & Legal:
None at this time.
Program or Service:
The service level of weekly collection cannot be assured. Dates of service may also differ, any communication with residents would be facilitated by Circular Materials, City would have no input.
Organizational:
None at this time.
Risks
None at this time.
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Report Date: November 19, 2024
Author(s): Tim Saunders
Department: Public Operations
Department Director: Tim Saunders
Managing Director: Diane Enger
Chief Administrative Officer: Bill Fletcher