A fund shortfall that rate increases will not close
Phoenix's Solid Waste Fund is projected to reach near-zero by FY2027–28, with a ~$20.8M shortfall identified in the current fiscal year. Phoenix City Council has received a rate direction recommendation — a multi-year residential rate increase proposed effective July 1, 2026. Rate increases without a structural alternative embed the cost trajectory permanently into the revenue base. The Circular Supply Agreement converts the disposal cost problem into a royalty return stream — without changing who collects the waste.
Carbotura builds, owns, and operates Advanced Circular Manufacturing (ACM) facilities under 30-year Circular Supply Agreements. The MCR process converts residual MSW and commercial fractions into synthetic graphite, graphene compounds, and recovered minerals — anoxic, oxygen-free, with no combustion and no ash.
Phoenix generates approximately 2,200 TPD of addressable feedstock, currently routed to the State Route 85 Landfill in Buckeye under a city-owned system. The 1,400 TPD residential stream is immediately accessible via city-owned transfer stations — no third-party negotiation required. Phase Initial at 400 TPD addresses 18% of the total addressable stream and generates a positive royalty position from Year 2.
The Beneficiation Fee of $100/ton is below the city's estimated full-system cost of $105/ton (SR-85 gate rate $55/ton VERIFIED; transport, operations, environmental monitoring and administration modeled at ~$50/ton increment).
At Phase Expanded (2,000 TPD), the programme addresses the full addressable feedstock ceiling. The CSA scales from Phase Initial to Phase Expanded without renegotiating commercial terms.
Five structural facts for Phoenix
Phoenix's Solid Waste Fund has a current-year shortfall of approximately $20.8M with a projected near-zero balance by FY2027–28. A rate increase addresses revenue — it does not address the $105/ton full-system cost of routing waste to SR-85 in Buckeye. The structural fix is converting disposal cost into a royalty return. Rate increases alone lock in the cost structure permanently.
Phoenix's residential MSW stream of approximately 1,400 TPD flows through city-owned transfer infrastructure. There is no incumbent contracted operator to negotiate with. Phase Initial at 400 TPD can draw entirely from this immediately accessible stream — the feedstock path is the most unencumbered of any US metro engagement in the Carbotura portfolio.
Year 1 Beneficiation Fee at Phase Initial: $14.60M. Year 2 Circular Royalty™: $17.52M. +$2.56M. This against a current baseline that generates $0 return from disposal spending.
Phoenix's 27th Avenue Landfill has been identified as a candidate for the Exogenesis™ Royalty — a structured dual-stream payment for legacy landfill material. Phoenix carries five closed landfill sites in its environmental monitoring programme, representing an ongoing operating cost. The Exogenesis™ structure converts a cost-bearing closed asset into a royalty-generating instrument. Subject to Waste Characterization Study confirmation. Available under the CSA.
The SR-85 Buckeye landfill gate rate of $55/ton is verified. The full-system FWDC — incorporating haul, landfill operations, environmental monitoring for five closed sites, and administration — is modeled at approximately $105/ton. The $5/ton gap between full-system cost ($105) and Beneficiation Fee ($100) is the gross cost displacement. It is modest — the primary economic case rests on the Circular Royalty™ return, not the displacement spread.
Two paths for Phoenix
- Beneficiation Fee: $100/ton, 2.5%/yr escalator
- Circular Royalty™: 120% of the current-year Beneficiation Fee, +1pp/yr
- Royalty commencement: Month 13 after corresponding Beneficiation Fee payment (rolling monthly)
- 30-year CSA term, perpetual continuation language
- Parent Performance Guarantee
- Regulatory Predicate Transition (RPT) required
- US GAAP / GASB accounting treatment
The Phoenix 27th Avenue Landfill has been identified as a qualifying candidate for the Exogenesis™ Royalty — a structured dual-stream payment for legacy landfill material appended to the primary CSA. Phoenix operates five closed landfill monitoring programmes representing ongoing operating costs with no income potential.
The Exogenesis™ Royalty structure converts a closed-asset liability into a royalty-generating instrument without altering primary CSA commercial terms. Available under the CSA. Subject to Waste Characterization Study confirmation.
Subject to Waste Characterization Study confirmationKey figures at a glance
vs. ~$105/ton full-system cost
+$2.56M vs. fee Year 2
immediate-access (city-owned)
FY2027–28 projected near-zero
Employment in Phoenix
Phase Initial (400 TPD)
Phase Medium (1,000 TPD)
Phase Expanded (2,000 TPD)
Circular Royalty™ projections — 400 to 2,000 TPD
Beneficiation Fee and Circular Royalty™ shown independently per the Separate Transaction Principle.
| Capacity | Annual TPY | Fee · Year 1 | Royalty™ · Year 2 | 30-Year Gross Royalty | FTE |
|---|---|---|---|---|---|
| 400 TPD ← Phase Initial | 146,000 | $14.60M | $17.52M | ~$874M ESTIMATED | ~100 |
| 1,000 TPD · Phase Medium | 365,000 | $36.50M | $43.80M | ~$2.18B ESTIMATED | ~250 |
| 2,000 TPD · Phase Expanded | 730,000 | $73.00M | $87.60M | ~$4.37B ESTIMATED | ~500 |
Royalty™ (Year n) = (120% + (n−1)pp) × that year’s Beneficiation Fee. Royalty payments begin 13 months after corresponding Beneficiation Fee payments. At steady state, the Circular Royalty™ is designed to exceed the Beneficiation Fee on a per-ton basis. FWDC $105/ton is MODELED.
The election governs asset treatment and royalty basis. The CSA differ in their fee structure, royalty basis, and balance sheet treatment.