Toronto City Hall

100 Queen Street West

Toronto, Ontario

Canada M5H 2N2

January 28, 1998

To: Works and Utilities Committee

From: M.A. Price

Interim Functional Lead for Solid Waste Management

Subject: Extension of Toronto Community Council Area Bulk Lift Contract No. 5130 for the Collection of Garbage and Recyclable Materials

To decide on the method of selecting a contractor to provide bulk lift garbage and recycling collection services, for high-rise apartments in the Toronto Community Council area, beyond the current contract scheduled to expire on June 17, 1998.

Adoption of the recommendations in this report will result in the maintenance of bulk lift garbage and recycling collection services in the Toronto Community Council area with no change in the taxation cost of those services. The 1996 annual cost of the contract was $1,270,849.00, including GST.

That Contract No. 5130 be extended for a three-year period from June 18, 1998 to June 17, 2001 and that appropriate notice of this extension be delivered to the contractor, Canadian Waste Services Inc.

The Council of the former City of Toronto, at its meeting of May 3 and 4, 1993, decided that the bulk lift collection of garbage and recyclable materials from high-rise apartments be contracted out (Clause 36, contained in Executive Committee Report No. 8.) On June 18, 1998, a contract was entered into between the former City of Toronto and WMI Waste Management of Canada Inc. (WMI). The assets of WMI were subsequently acquired by Canadian Waste Services Inc. (CWSI) and CWSI now provides bulk lift collection services in accordance with the contract originally entered into between the old City of Toronto and WMI.

The contract between the former City of Toronto and WMI includes the following clause:

AINFORMATION TO TENDERERS

1. TERM OF CONTRACT

WMI, in submitting its bid, tendered the same contract unit prices for the three-year renewal option as for the original five years of the contract term.

Costs and Economy of Current Bulk Lift Contract

As noted above, the assets of WMI have been acquired by CWSI. The assets of other competing companies, including Laidlaw Waste Systems and Philip Environmental have also been acquired by CWSI.

The bulk lift garbage contract had yielded significant cost savings to the former City of Toronto. In the report dated July 2, 1993, from the Commissioner of Public Works and the Environment, entitled ABulk Lift Residential Garbage Collection@, to the Toronto City Services Committee meeting of July 21, 1993, the annual financial savings was estimated at $1,662,186.00.

It is noted that of the five bids received, the original tendered prices of three of the bids for the former City of Toronto Contract No. 5130 were over 50 percent higher than the low bid. The current price for bulk lift collection is considered by the Waste Work Management Team to be price competitive.

The current unit prices for bulk lift garbage collection by contract in the various parts of the City of Toronto are shown in Table 1.

As can be seen from Table 1, the Toronto Community Council Area unit prices are somewhat higher than for the some of the other community council areas. This may be explained by the relatively slower average travel speeds and more difficult access to high-rise buildings inside the Toronto Community Council area. The current cost of the contract based on the price adjustment clause contained in the contract is approximately 8 percent higher than the original 1993 tender prices.

Table 1

Current Unit Prices for Garbage Collection

in Bulk Lift Contracts

* Price adjusted to reflect collection of garbage, excluding bulky items.

** All municipalities provide twice-a-week bulk lift garbage collection.

Options for Continuing Contracted Bulk Lift Garbage and Recycling Collection Service

Two options are available to the City for the continuance of the contracted bulk lift garbage and recycling collection service - calling new tenders or extending the existing contract. Each of these two option is reviewed below.

1. Call New Tenders for Bulk Lift Garbage and Recycling Collection

The lead time for obtaining new garbage collection equipment following the placing of orders is approximately nine to twelve months. Therefore, it is customary in tendering garbage collection contracts to call and award tenders approximately one year prior to the commencement of work, in order to allow all bidders sufficient time to obtain equipment at competitive prices. Due to the limitations on extending contracts beyond the end of 1998 and the ownership changes and consolidation in the Canadian waste management industry which all took place in 1997, the decision on calling tenders for a new contract was deferred. During this period, it also became apparent that a re-tendered contract could be subject to increased prices.

2. Extend Existing Contract

The original tender documents specifically provided for a three-year contract extension. The only action required to extend the contract is the provision of appropriate notice by the Commissioner of City Works Services. This will fix current costs for a further three year period, subject to the price adjustment clause contained in the contract.

Extension of the current contract has been determined to be competitive. Authorization should be given to extend Contract No. 5130 for three years, based on the terms of the existing contract.

John Warren

Director of Operations and Sanitation

City Works Services Department

Toronto Community Council Area

Phone: (416) 392-1846

Fax: (416) 392-0396

E-mail: jwarren@city.toronto.on.ca

Michael A. Price

Interim Functional Lead for Solid Waste Management

Barry H. Gutteridge

Acting Executive Commissioner