Sylvan Lake Town Council has agreed to amend the Master Services Agreement between the Town and Fogdog Energy to allow for a guaranteed monthly payment.
According to a report to Council presented by CAO Wally Ferris, the change to the agreement would have a minimal impact on the Town.
The change in the agreement states Sylvan Lake will guarantee a minimum monthly tippage payment of $30,000.
At the guaranteed cost, it would mean Sylvan Lake will have to provide at least 300 tonnes of waste to the No Landfill Facility at a cost of $100 per tonne.
The previous iteration of the agreement stated there was no guaranteed amount of waste or monthly payment to Fogdog. The fee of $100 per tonne of waste remains the same.
“For example, should the Town generate 290 tonnes of waste in a future month the Town will be required to pay to Fogdog Energy $29,000 for the tippage of the 290 tonnes (at $100/tonne) plus payment of an additional $1,000 (for the 10 tonnes of waste short of 300 tonnes) for a total payment of $30,000,” the council report states.
Currently, Sylvan Lake generates about 5,800 tonnes of garbage each year, with an average of about 485 tonnes each month.
According to the Town, in 2018 the least amount of waste collected in a month was 304 tonnes, during the shortest month of the year, February.
“No single month in 2018 was below 300 tonnes of waste [generated], however, any future month(s) with fewer than 300 tonnes of waste generation would result in the Town paying the minimum amount of $30,000,” the report states.
Knowing there was no month from last year when the amount of waste dipped below the new guaranteed cost, Ferris feels confident there will be little risk to the Town.
“I don’t believe the town will fall below the 300 tonnes required monthly. With the town expected to continue to grow, our monthly average will only grow as well,” Ferris said.
Fogdog came to the Town wishing to amend the agreement to receive a guaranteed $30,000, or 300 tonnes, each month.
Ferris said the amount chosen by Fogdog was by the recommendation of their investors.
The Town will pay the guaranteed amount should all terms of the agreement met. If the facility stops operation during the 14-year term of the agreement, guaranteed waste volumes and payments will stop.
“The term of the guarantee would come into effect one year after the operation of the facility commences and will end after fourteen (14) years. The intent of the proposed amendment is to assist Fogdog Energy with the acquisition of investment capital by providing their investors with a minimum monthly revenue projection.”
Fogdog Energy is working to gain approval from Alberta Environment and Parks with the intention of opening the facility by the end of 2020.
Follow Megan Roth on Twitter