March 3, 1998

To: Works and Utilities Committee

From: M.A. Price

Interim Functional Lead for Solid Waste Management

Subject: Tendering of Contract for Nine Hired Garbage Packers in the Scarborough Community Council Area

Purpose:

To provide historical data on the use of hired garbage packers in the former City of Scarborough and to advise that the current contract for this service will expire on June 30, 1998 and is in the process of being tendered.

Funding Sources:

Funds have been provided in Scarborough=s portion of the amalgamated Toronto operating budget for vehicle and operator service rental associated with garbage and yardwaste collection in the amounts of $1,100,000 and $50,000 respectively.

Recommendation:

That this report be received for information.

Background:

The former City of Scarborough has contracted for the provision of hired garbage packers since 1953 when the first truck and operator was hired. The number of hired trucks has remained constant at nine since 1992. These vehicles are assigned on a daily basis and work in unison with City forces. Prior to 1992 the contracting of these services was done on a negotiated basis with the owner/operators. The trucks are currently provided by four independent contractors.

In 1992 the first formal contract was tendered to ensure that competitive pricing was being received. A three-year contract expiring on November 30, 1995, was subsequently awarded by Council. In negotiating a rate increase for 1995, all four of the contractors requested a two-year extension until November 30, 1997, in order to amortize their equipment over its full projected life. This extension was awarded by Council with the condition that prices would remain stable for its duration. A subsequent extension was granted until June 30, 1998 in order to help facilitate the amalgamation process.

The rate for these contracts currently ranges from a low of $66.57 per hour to a high of $71.50. For this amount we receive a garbage packer complete with a driver and labourer. The trucks vary in age and capacity, hence the variation in hourly rates.

Discussion:

The use of hired trucks working in tandem with the municipal fleet has proved very successful. On a typical day these trucks constitute 31% of the fleet assigned to residential and commercial garbage collection in the Scarborough district. On occasions when tonnages are extremely high the contractors are always willing and able to work the extra hours needed to get the garbage off the street.

The use of hired trucks allows staff to monitor and evaluate the performance of private sector versus municipal forces, while still maintaining total control of the operation. The infusion of contract workers into the work force has created a healthy and competitive environment in which both sectors are required to perform to a high standard.

Absenteeism is never an issue with the hired operators. If a contractor=s employee is ill or on vacation it is the contractor=s responsibility to ensure that trained and competent staff are available to operate the vehicle.

Through the use of these contractors the high cost of vehicle purchases and ongoing maintenance is avoided. To replace these nine trucks with City owned vehicles would cost in excess of $1 million in capital costs alone.

The current tender calls for a three-year contract expiring on June 30, 2001 with an option for a two-year extension. This enables the contractors to amortize their equipment over a longer period and often results in lower pricing.

Conclusions:

While the total contracting of collection services would necessitate an ability to adjust to significant price fluctuations, the blending of City and contract forces creates an environment in which a low unit cost for garbage collection has proven to be both attainable and sustainable.

Contact Name and Telephone Number:

Ron Gordon

Director, Solid Waste, Recycling and Fleet Services

Scarborough Community Council Area

Phone: (416) 396-4771

Fax: (416) 396-4156

E-mail: Gordon

Internet: gordon@city.scarborough.on.ca

Michael A. Price

Interim Functional Lead for Solid Waste Management

Barry H. Gutteridge

Commissioner

Works and Emergency Services