Extraordinary Meeting of Wagga City Council: December 10, 2018

AGENDA AND
BUSINESS PAPER
Extraordinary Meeting of
Council
To be held on
MONDAY
10 DECEMBER 2018
AT 5.00PM
Cnr Baylis and Morrow Streets,

Wagga Wagga NSW 2650
PO Box 20, Wagga Wagga
Phone: 1300 292 442

Fax: 02 6926 9199
Website: www.wagga.nsw.gov.au
NOTICE OF MEETING
In pursuance of the provisions of the Local Government Act, 1993 and the Regulations
there under, notice is hereby given that an Extraordinary Meeting of the Council of the
City of Wagga Wagga will be held in the Council Chamber, Civic Centre, Corner Baylis
and Morrow Streets, Wagga Wagga, on Monday 10 December 2018 at 5.00pm.
Council live streams video and audio of Council meetings. Members of the public are
advised that their voice and/or image may form part of the webcast.
Mr Peter Thompson
General Manager
WAGGA WAGGA CITY COUNCILLORS
Mayor Deputy Mayor Councillor Yvonne Councillor Paul

Councillor Greg Councillor Dallas Braid Funnell
Conkey OAM Tout
Councillor Dan Councillor Vanessa Councillor Rod Councillor Tim

Hayes Keenan Kendall Koschel
Councillor Kerry
Pascoe
QUORUM
The quorum for a meeting of the Council is a majority of the Councillors of the Council who
hold office for the time being who are eligible to vote at the meeting.
COUNCIL MEETING ROOM
Lecturn
Mayor G.M.
DIRECTORS G Conkey DIRECTORS
OAM
Reports submitted to the Extraordinary Meeting of Council to be held on Monday 10 December 2018.
EXTRAORDINARY MEETING OF COUNCIL AGENDA AND BUSINESS

PAPER
MONDAY 10 DECEMBER 2018
ORDER OF BUSINESS:
CLAUSE PRECIS PAGE
PRAYER 2
ACKNOWLEDGEMENT OF COUNTRY 2
APOLOGIES 2
DECLARATIONS OF INTEREST 2
REPORTS FROM STAFF

RP-1 CONTAINER DEPOSIT SCHEME AND REFUND SHARING
ARRANGEMENT 3
QUESTIONS/BUSINESS WITH NOTICE 62
Extraordinary Meeting of Council – Monday 10 December 2018 Page 1

Reports submitted to the Extraordinary Meeting of Council to be held on Monday 10 December 2018.
PRAYER
ACKNOWLEDGEMENT OF COUNTRY
APOLOGIES
DECLARATIONS OF INTEREST
Extraordinary Meeting of Council – Monday 10 December 2018 Page 2

Report submitted to the Extraordinary Meeting of Council on Monday 10 December 2018. RP-1
REPORTS FROM STAFF
RP-1 CONTAINER DEPOSIT SCHEME AND REFUND SHARING

ARRANGEMENT
Author: David Butterfield

Director: Natalie Te Pohe
Summary: The NSW Container Deposit Scheme (the Scheme) commenced

on 1 December 2017, with a 10 cent refund claimable on eligible
containers. Under the Scheme, operators of Material Recovery
Facilities (MRFs) can claim a portion of the refund on containers
collected from kerbside recycling using the MRF Protocol.
MRFs could begin claiming a refund on containers they process

for councils on 1 December 2017, however, MRFs can only
continue to claim the refund after 1 December 2018 where:
 the MRF and council have put a refund-sharing

agreement in place if there is no existing refund-sharing
agreement; or
 the council notifies the Environment Protection Authority
(EPA) in writing that in the circumstances it is fair and
reasonable if there is an existing refund-sharing
agreement.
This report is recommending that Council enter into a short-term

refund-sharing agreement with Kurrajong for a 12-month period
from the date of execution of the Agreement, estimated to be 11
December 2018 to 10 December 2019 incorporating a
retrospective payment for the period 1 December 2017 to 30
Ment
November 2018.
Recommendation
That Council:
a authorise the General Manager or their delegate to enter into a Refund Sharing
Agreement commencing 11 December 2018 to 10 December 2019 according to
the following refund sharing arrangement:
i 50% Wagga Wagga City Council; and
ii 50% Kurrajong
b authorise the General Manager or their delegate to ensure that the Refund
Sharing Agreement includes the retrospective application for the period 1
December 2017 to 30 November 2018 according to the following refund sharing
arrangement:
i 50% Wagga Wagga City Council; and
ii 50% Kurrajong
Extraordinary Meeting of Council - Monday 10 December 2018 Page 3

c note that a report commissioned by the Government indicated that the costs of
introducing the new Container Deposit Scheme, including the ongoing auditing
and reporting requirements are not more than 5% of revenue generated from the
Scheme
d note that the recommended refund sharing arrangement with retrospective
payments is on a short term basis, allowing time to further review the ongoing
implications and costs of the Scheme
Report
Background
The NSW Container Deposit Scheme (the Scheme) commenced 1 December 2017,
with a 10 cent refund claimable on eligible containers.
When members of the community dispose of containers to their yellow recycling bins
Council becomes the owner of the containers and can claim the deposit. The Office of
Local Government has the view that this income is to be spent on reducing the cost of
domestic waste management. In the future we hope to lobby for this income to be
available for other Community Projects.
Under the Scheme operators of Material Recovery Facilities (MRFs) claim the refund
on containers collected from kerbside recycling using the MRF Protocol. This is
because in practical terms, the containers are delivered to the MRF for sorting and
processing.
MRFs could begin claiming a refund on containers they process for councils on
1 December 2017. However MRFs can only continue to claim the refund after
1 December 2018 where:
 the MRF and council have put a refund-sharing agreement in place if there is no
existing refund-sharing agreement; or
 the council notifies the Environment Protection Authority (EPA) in writing that in
the circumstances it is fair and reasonable if there is an existing refund-sharing
agreement.
As outlined above, if no agreement is reached prior to 1 December 2018, any refund

sharing agreement that is entered into after this date, can only be applied from the date
the agreement is entered into, therefore resulting in a significant loss of revenue for
Council and therefore the community.
It should be noted that under clause 18 of the Waste Avoidance and Resource
Recovery (Container Deposit Scheme) Regulation 2017, if a council enters into a
processing agreement with a MRF operator on or after 1 December 2017 that does not
address the Scheme refund-sharing arrangements, the MRF operator will continue to
receive the entire Scheme revenue stream.
Accordingly, when Council entered into Contract 2017-26 for Recyclable Waste
Acceptance and Processing Services with Kurrajong commencing 2 April 2018,
clauses were inserted to ensure that Kurrajong were required to pay Council a
nominated percentage of any processing refund that the contractor received in respect
of containers collected under that Contract.

To support the introduction of the Scheme, the Government commissioned the Centre
for International Economics (CIE) and Anne Prince Consulting (APC) to examine the
impact of the Scheme on the business economics of MRFs. They also assessed
various revenue sharing arrangements along with wider viability issues currently
affecting the recycling industry. The final report is included as Attachment 1.
Key findings from the study found:
 A high proportion of eligible household containers in NSW are anticipated to still

be processed through kerbside recycling. This is a potentially significant revenue
stream for councils and MRFs.
 The direct cost of CDS compliance on MRFs is very low (around 5% of CDS
kerbside revenue).
 Eligible containers are worth more from the CDS than their current commodity
value.
 It is estimated that the additional revenue stream from eligible containers through
kerbside recycling could be worth around $100 million per annum for councils
and MRFs across NSW. In terms of the revenue per input tonne, it is estimated
that the number of eligible containers per tonne of inputs into the MRF will be at
least 1500 to 2000, implying an available refund of $150 to $200 per input tonne.
 A proportion of CDS revenue may assist councils in their negotiations with MRFs
to address broader MRF and recycling viability issues, instead of higher gate
fees.
During discussions with officers from the Office of Local Government (OLG) on 25 July
2018 in relation to the refund sharing matter, Council officers were advised that to date,
many of the MRFs were attempting to incorporate both the impacts of the China Sword
Policy and the introduction of the refund sharing arrangements into a combined
variation to gate fees. OLG strongly recommended to keep both matters separate, as
they were not interrelated, and the impacts of the China Sword Policy varies quite
significantly. This is also highlighted in the final report commissioned by the
Government.
Council officers advised that the two matters were being managed separately, with
advice then received that the refund sharing arrangement should be in the vicinity of
5% MRF / 95% Council; however if there was more hand sorting undertaken by the
MRF then Council should receive no less than an 85% share.
Council were also advised that the EPA had provided funding to establish model
clauses for refund sharing agreements that were to be shared across all councils once
developed. The NSROC and SSROC who were leading this process, engaged
Maddocks Law Firm to prepare draft documents, which were then provided to Council
on 11 September, subsequent to initial discussions with representatives from
Kurrajong on 5 September.
Negotiations with Kurrajong

Details of the negotiations have been outlined confidentially in Attachment 2
Estimated Value to the Community

The waste that the community provides for kerbside collection can generate revenue
for Council, which can effectively be returned to the community on the basis that it is
utilised in providing domestic waste management services in accordance with Section
504 of the Local Government Act 1993. Further details of the estimates are contained

in the confidential Attachment 2 however, officers have determined that Council could
potentially receive up to $500K per annum in this regard.
Kurrajong is an important support organisation with their vision being “for people with
disability to lead a life of their choice. Together, we can change lives”. The organisation
was first formed in 1957 and they offer support and services for people with disability
in the Riverina and Murray regions. Kurrajong is a registered National Disability
Insurance Scheme (NDIS) provider with service provision including core support (help
in everyday life); capital support (for equipment and modifications to homes); and for
capacity building support (to help learn new skills). Therefore, any refund revenue
received by Kurrajong would be reinvested into their organisation that will provide a
good community outcome.
It is acknowledged that other Councils in the region have accepted a 50/50 refund
sharing arrangement retrospective to 1 December 2017 for a 12-month period. While
Council anticipates that, with better data over time, the community will be entitled to a
share which exceeds 50%, agreement on a 50/50 split now enables both parties to
move forward. It will also allow both Kurrajong and Council to undertake the
necessary audits required to have a more informed position when split is revisited next
year.
Financial Implications
If Council agree to a 50/50 Refund Sharing Arrangement with Kurrajong for an initial
12-month period retrospectively applied to 1 December 2017, it is anticipated that the
Scheme could generate at least an additional $500K per annum for Council and
therefore the community as a whole. This will be dependent however, upon the
continued receipt of containers through the Scheme. It is understood that other
community organisations and schools have been discussing the potential
establishment of their own reverse vending machine utilising the Return and Earn
Scheme, which would effectively reduce the refund earning potential. At this stage, the
Long Term Financial Plan has not incorporated any revenue from the Scheme,
however any revenue received is required to be incorporated in the Solid Waste
Reserve and is externally restricted. It is anticipated that any future audits or associated
programs related to the Scheme would be funded from this Reserve.
Policy and Legislation
Local Government Act 1993, Section 504.

Waste Avoidance and Resource Recovery (Container Deposit Scheme) Regulation
2017
Link to Strategic Plan
The Environment
Objective: We create a sustainable environment for future generations
Outcome: We minimise our impact on the environment
Risk Management Issues for Council
If community groups or schools establish further reverse vending machines across

Wagga, it would reduce the revenue stream that can then be passed onto the
community.

Internal / External Consultation
Consultation has occurred between officers of the Procurement and Gregadoo Waste
Management areas of Council, in conjunction with the General Manager and Kurrajong
representatives.
Consultation has also occurred with the Interim Executive Officer of the Riverina and
Murray Joint Organisation, Regional Waste Management Coordinator of the Northern
Sydney Regional Organisation of Councils, Environment Protection Authority and the
Office of Local Government.
Attachments
1⇩ . Report from NSW Office of Local Government - "Revenue sharing

arrangements between MRFs and councils from the NSW Container Deposit
Scheme
2. Overview of Negotiations and Estimated Value
This matter is considered to be confidential under Section 10A(2) of the
Local Government Act 1993, as it deals with: information that would, if
disclosed, confer a commercial advantage on a person with whom the
Council is conducting (or proposes to conduct) business.
3. Correspondence from Kurrajong - 22 October 2018
4. Correspondence from Kurrajong - 28 November 2018
5. Proposed Refund Sharing Arrangement

Attachment 1: Report from NSW Office of Local Government - "Revenue sharing arrangements between MRFs Page 8
and councils from the NSW Container Deposit Scheme
Report submitted to the Extraordinary Meeting of Council on Monday 10 December 2018.
QUESTIONS/BUSINESS WITH NOTICE

Extraordinary Meeting of Wagga City Council: December 10, 2018

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AGENDA AND

Cnr Baylis and Morrow Streets,

Phone: 1300 292 442

Mayor Deputy Mayor Councillor Yvonne Councillor Paul

Councillor Dan Councillor Vanessa Councillor Rod Councillor Tim

EXTRAORDINARY MEETING OF COUNCIL AGENDA AND BUSINESS

MONDAY 10 DECEMBER 2018

CLAUSE PRECIS PAGE

REPORTS FROM STAFF

QUESTIONS/BUSINESS WITH NOTICE 62

Extraordinary Meeting of Council – Monday 10 December 2018 Page 1

Extraordinary Meeting of Council – Monday 10 December 2018 Page 2

REPORTS FROM STAFF

RP-1 CONTAINER DEPOSIT SCHEME AND REFUND SHARING

Author: David Butterfield

Summary: The NSW Container Deposit Scheme (the Scheme) commenced

MRFs could begin claiming a refund on containers they process

 the MRF and council have put a refund-sharing

This report is recommending that Council enter into a short-term

Extraordinary Meeting of Council - Monday 10 December 2018 Page 3

As outlined above, if no agreement is reached prior to 1 December 2018, any refund

Extraordinary Meeting of Council - Monday 10 December 2018 Page 4

Key findings from the study found:

 A high proportion of eligible household containers in NSW are anticipated to still

Negotiations with Kurrajong

Estimated Value to the Community

Extraordinary Meeting of Council - Monday 10 December 2018 Page 5

Policy and Legislation

Local Government Act 1993, Section 504.

Link to Strategic Plan

Risk Management Issues for Council

If community groups or schools establish further reverse vending machines across

Extraordinary Meeting of Council - Monday 10 December 2018 Page 6

Internal / External Consultation

1⇩ . Report from NSW Office of Local Government - "Revenue sharing

Extraordinary Meeting of Council - Monday 10 December 2018 Page 7

QUESTIONS/BUSINESS WITH NOTICE

Extraordinary Meeting of Council - Monday 10 December 2018 Page 62

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