TO: Mayor and City Council
THROUGH: Krishna Namburi, Interim City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
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Primary Funding Agreement with Circular Action Alliance which allows City of Salem to access funding linked to the implementation of the Oregon Plastic Pollution and Recycling Modernization Act.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Natural Environment Stewardship; Safe and Healthy Community; Safe, Reliable and Efficient Infrastructure; Strong and Diverse Economy; Welcoming and Livable Community.
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SUMMARY:
summary
Recycling Modernization Act requires local governments to improve recycling services beginning July 1, 2025. To receive funding for eligible recycling service improvements, local governments must submit the Primary Funding Agreement (Attachment 1) to Circular Action Alliance. Up to $532,701 is available for contamination reduction programming for the City of Salem in FY 2026.
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ISSUE:
Shall City Council authorize the Interim City Manager to sign and submit the Primary Funding Agreement and any related addenda and amendments with Circular Action Alliance Oregon LLC?
RECOMMENDATION:
recommendation
Authorize the Interim City Manager to sign and submit the Primary Funding Agreement and any related addenda and amendments with Circular Action Alliance Oregon LLC.
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FACTS AND FINDINGS:
The Oregon Plastic Pollution and Recycling Modernization Act, also known as the Recycling Modernization Act (RMA) requires local governments to improve recycling services beginning July 1, 2025. Certain required recycling service improvements will be funded by the Producer Responsibility Organization (PRO) - Circular Action Alliance Oregon (CAA) - approved by the Oregon Department of Environmental Quality (DEQ) to implement the RMA. New local government requirements are funded by CAA through fees paid to CAA by producers of packaging, printing and writing paper, and food serviceware.
To receive funding for eligible recycling service improvements, local governments are required to submit the Primary Funding Agreement (PFA) to CAA. The PFA defines the terms for disbursement of funds through payment or reimbursement, use of funds, reporting and records, and other standard contract language.
Recycling service improvement categories include:
1. Transportation,
2. Contamination Evaluation,
3. Contamination Reduction Programming,
4. Recycling Service Expansion, and
5. Purchase of Recycling Collection Containers.
Recycling improvements for most of these categories will be fulfilled by the City’s franchised haulers (#4 and #5), by CAA (#2), or do not apply to Salem’s service area (#1). The remaining category (#3 - contamination reduction programming) is the focus of the funding need for the City of Salem. The program plan approved by DEQ allows local governments to receive up to $3.00 per capita annually for contamination reduction programming. Salem’s 2024 population estimate from Portland State University is 177,567; this equates to up to $532,701 of available funding in FY 2026. Costs may include planning, staffing, and engaging contractors, if those activities are necessary to conduct the contamination reduction programming.
Once the PFA is signed, CAA and city staff will discuss which recycling improvement categories and the related addenda are needed for this service area. Each recycling improvement category is addressed through a separate addendum to the PFA. At this time, only the Contamination Reduction Reimbursement Funding Addendum (Attachment 2) is expected to be added to the PFA.
The PFA, including addenda, will be in effect through December 31, 2027, and is anticipated to be renewed subsequently.
Contamination reduction programming activities are not included in the FY 2026 Adopted Budget. A future budget item is anticipated to be brought to City Council for approval, adding the unanticipated new revenue and expenditures to the FY 2026 Budget.
BACKGROUND:
The Recycling Modernization Act, signed into law in 2021, requires producers of packaging, printing and writing paper, and food serviceware to share responsibility for effective management of their products after use. Producers are required to join and pay a membership fee to a Producer Responsibility Organization, referred to as a PRO, and the funding generated from membership fees will be used to finance improvements to Oregon’s recycling system, making recycling programs more convenient, accessible, and responsible. Oregon’s PRO is Circular Action Alliance.
RYAN ZINK
FRANCHISE ADMINISTRATOR
Attachments:
1. Primary Funding Agreement - Circular Action Alliance Oregon LLC
2. Contamination Reduction Reimbursement Funding Addendum