TO: Mayor and Members of City Council
THRU: Michael Gibson, Assistant City Manager
FROM: Daniel Edwards, Assistant Director of Public Services,
Sheila Thomas-Ambat, Director of Public Services
DATE: March 23, 2026
RE:Title
Approve and authorize the City Manager to execute a ten-year contract with GFL for the operation of the City’s Transfer Station Title
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 4: Desirable Place to Live, Work and Recreate
Goal 5: Financially Sound City Providing Exemplary City Services
Executive Summary:
The Council is requested to approve the award and authorize the execution of a ten-year contract with GFL for the operation of the City’s Transfer Station, at an annual cost of $329,000. The contract further requires the contractor to remit a host fee of eighty-five cents ($0.85) per ton of material processed.
Background:
The City’s Transfer Station was constructed and leased by Waste Industries, LLC, the original contracted operator of the facility. A certificate of completion was issued by the City on September 14, 2010, and the initial lease agreement was executed for a term of fifteen (15) years.
In 2018, Waste Industries merged with GFL Environmental Inc., resulting in GFL assuming ownership of the contract and lease. As such, the Transfer Station is presently operated, managed, and maintained by GFL.
During its tenure, GFL has completed multiple improvements to the Transfer Station, including but not limited to building repairs, scale house and scale enhancements, stormwater pond improvements, and other infrastructure upgrades. Following the expiration of the original lease term, the facility has continued to operate under a month-to-month lease arrangement pending execution of a new long-term contract.
In January 2025, the City of Fayetteville contracted with the consulting firm Geosyntec Consultants to evaluate operational and financial options for the City’s Transfer Station. The purpose of the analysis was to assess the long-term viability of the current operating model and identify opportunities to improve financial returns and operational flexibility for the City.
Geosyntec evaluated several potential scenarios:
• Scenario 1: Status Quo: Renew the contract for the additional five-year extension as allowed in the current lease agreement, with no changes to the existing terms. The GFL would continue paying $77,931 per year in rent, a $70 tipping fee, and a host fee of $0.60 per ton for the first 115,000 tons of solid waste delivered annually and $1.00 per ton for any tons above 115,000.
• Scenario 2: Status Quo with City Waste Directed to Transfer Station: Renew the contract with the current vendor under the existing rent, tipping fee, and host fee terms. As part of the new agreement, the City would direct all waste collected by the Public Services Department to the Transfer Station instead of the Ann Street Landfill, with the expectation that City vehicles would be allowed to dump at no cost or at a reduced rate.
• Scenario 3: Fixed Lease with City Waste Directed to Transfer Station: Renew the contract with the current vendor under a fixed annual lease payment, where the contractor pays the City a single all-inclusive lease fee to operate the Transfer Station instead of separate rent and host fees. The City would direct all waste collected by the Public Services Department to the Transfer Station, with City vehicles allowed to dump at no cost or at a reduced rate.
• Modeling Adjustment: Instead of developing Scenarios 4 and 5 (hybrid versions of the first three models), the analysis focused on Scenario 6, which includes several sub-scenarios.
• Scenario 6: City Operates Transfer Station: The City would operate the entire Transfer Station, including loading, hauling, and disposal, and would own all infrastructure and equipment. Several sub-scenarios were analyzed using different disposal facilities and three waste volume levels: low, expected, and high tonnage.
Geosyntec’s recommendations are as following:
1. Scenarios 2 and 3 show a slightly better financial outcome for the City compared to the current agreement (Scenario 1), but they would require new contract terms. To capture more financial benefit from the Transfer Station, the City would need to negotiate with GFL and/or issue an RFP to obtain competitive market pricing. Because of uncertainties and changing market conditions affecting Scenarios 2, 3, and 6, Geosyntec recommends issuing an RFP to obtain current market pricing and terms.
2. Changing the current agreement creates financial risks for the City due to uncertainty in future pricing, waste volumes, and competition from other disposal facilities. To reduce these risks, Geosyntec recommends a hybrid approach (Scenario 1A) where the City negotiates a fixed lease payment with the contractor but does not require City waste to be delivered to the Transfer Station.
Request for Proposals
Based on the recommendation from Geosyntec, the City elected not to pursue further analysis of direct operational control of the Transfer Station. Instead, the City issued a Request for Proposals (RFP) for the Lease, Operation, and Maintenance of the City’s Transfer Station, which was publicly advertised from March 21, 2025, through April 21, 2025. The City received proposals from the following firms:
• GFL Environmental Inc.
• Waste Management
Geosyntec assisted the City in reviewing and evaluating the submitted proposals.
The following are the bids received for renting the Transfer Station from the City of Fayetteville:
Selection and Negotiation
Following the evaluation process and based on the recommendation of Geosyntec, GFL Environmental Inc. was selected as the preferred contractor based on the above table and an estimated average tonnage of 200K applicable to the host fee.
The City subsequently entered into negotiations with GFL to finalize the lease agreement. A draft lease is attached.
The City published a legal notice announcing the pending lease agreement with GFL Environmental which ran from February 17, 2026, to March 17, 2026. No comments were received during the public notice period.
A resolution authorizing the commercial lease agreement for the City’s Transfer Station is scheduled to be presented to the Fayetteville City Council for consideration on March 23, 2026.
Issues/Analysis:
|
Estimates Based on GFL Transfer Station RFP results |
|
Based on GFL’s reported tonnage over the last three years, SW should see a revenue increase of approximately $215K |
|
A Tons reported 2024-2025 |
B Per Ton Host Fee Cost |
C Lease Fee |
D Per Ton Host Fee Multiplied by Tons Reported (A*B) |
E New Approximate Revenue (C+D) |
F Actual Revenue |
G Difference (E-F) |
|
202,835 |
$0.85 |
$329,000.00 |
$172,409.75 |
$501,409.75 |
$281,160.70 |
$220,249.05 |
|
Tons reported 2023-2024 |
|
|
|
|
|
|
|
177,968 |
$0.85 |
$329,000.00 |
$151,272.80 |
$480,272.80 |
$264,355.35 |
$215,917.45 |
|
Tons reported 2022-2023 |
|
|
|
|
|
|
|
200,146 |
$0.85 |
$329,000.00 |
$170,124.10 |
$499,124.10 |
$287,426.54 |
$211,697.56 |
Budget Impact:
• Annual Contract Amount: $329,000
• Contract Term: Ten (10) years
• Total Contract Value: $3,290,000
• Host Fee Revenue: $0.85 per ton of material processed, payable to the City in addition to the annual contract amount
• Based on past tonnage reports and using the current proposed contract the SW should see an increase in revenue of approximately $215K a year.
Options:
1. Council is requested to approve the award and authorize the execution of a ten-year contract with GFL for the operation of the City’s Transfer Station
2. Do not approve and award the GFL contract and provide guidance to staff
Recommended Action::Recommended Action
It is recommended that the Council approve the award and authorize the City Manager to execute a ten-year contract with GFL for operation of the City’s Transfer Station in the amount of $329,000 per year, and further authorize acceptance of a host fee of eighty-five cents ($0.85) per ton of material processed.
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Attachments:
Transfer Station Analysis
Presentation for Transfer Station Scenarios
Presentation for Bid Evaluations
RFP for Transfer Station
Draft Lease Agreement