A multi-million-dollar judgment against the city’s Solid Waste Authority for breach of contract could have an impact on a new recycling policy being pushed by Mayor Sandy Stimpson’s administration.

Earlier this month, Stimpson announced changes to the city’s recycling and litter policies. He said the city’s recycling program would now be single stream and more convenient.

The Mobile City Council on Tuesday delayed a vote on two contracts related to the change in policy.

While most items introduced for the first time are held over, per council rules, councilors specifically asked about the legal ramifications of approving the contracts after attorneys for Waste Management had successfully argued twice that the city’s Solid Waste Authority breached a 1993 contract by sending yard debris to a landfill not management by WM.

Members of the Solid Waste Authority Board, namely Chairman Pete Riehm and Michael Druhan, asked the council for copies of the proposed contracts for review. Council President Gina Gregory said the council would grant their request.

“We are sensitive to that,” Riehm said of a possible lawsuit. “We already have a $3 million bill we can’t pay.”

City Attorney Ricardo Woods argued recycling has diverted from the WM-managed Chastang landfill for years and the company “missed the boat.”

Riehm told councilors the SWA had been sending yard debris to the Dirt Inc. landfill for 20 years before WM hit them with a lawsuit in federal court, claiming their contract stipulated all waste was to go to Chastang. The city hopes the new policy will increase its “abysmal” landfill diversion rate of 6 percent, Stimpson said.

Both Gregory and Councilman John Williams were concerned that if the diversion rate increases, WM might begin to take notice of the city’s recycling program. Williams said Waste Management could change its mind.

“When they see it hurt their bottom line, they’re going to start raising their heads,” he said.

Complicating the issue is the current lease of the Government Street recycling center, which expires in July. It is the administration’s goal to move the compactors to city-owned property at that point, possibly at the Mobile Police Department’s first precinct on Virginia Street. The city will also have a drop-off location at the Western Administration Complex near Langan Park. The goal is to have a drop-off spot in every council district.

City spokesman George Talbot said the administration would need to sit down with the SWA and work out some issues, in order to get the contracts through council.

Councilmen Joel Daves and Levon Manzie both said they wanted the council to act quickly on the administration’s recommendation.

“I’m reluctant to be frozen into inaction on something as impactful as this,” Daves said, acknowledging there were good arguments on both sides. “There is tremendous room for improvement in recycling.”

Waste Management currently charges the city a tipping fee of $37.50 to use Chastang landfill.

One contract the council will be considering would allow for the acceptance and processing of recyclables by Emerald Coast Utilities Authority for $125,000 over nearly three years. The second contract would allow for the rental of equipment to collect and transport the recyclables for $900,000 over a three-year period.

Don Rose, the city’s procurement officer, said the $900,000 contract represents a “high-end” aspirational goal of collecting 8,000 tons of recycling. Right now, the city sees about 2,000 to 2,500 tons of recyclables. The city would only be charged in the contract per ton.

The contracts also represent a possible savings over the recyclables ending up in the waste stream. Emerald Coast Utilities Authority does not charge a tipping fee and the city will pay $35 per compressed ton to transport the recyclables to Cantonment, Fla. Due to the commodity price, Emerald Coast will pay the city $15 per ton for the recyclables. However, if the commodity price drops low enough, the city would instead pay Emerald Coast a handling fee, Rose said.