May 13, 1998

To:Works and Utilities Committee

 From:M.A. Price

Interim Functional Lead for Solid Waste Management

 Subject:A Supplementary Report Re: The Tendering of Contract for Nine Hired Garbage Packers in the Scarborough Community Council Area

 Purpose:

 To report on the results of discussions with C.U.P.E. Local 416 (368) as related to this matter and as directed by the Works and Utilities Committee at its meeting of March 25, 1997.

 Funding Sources, Financial Implications and Impact Statement:

 The approval of recommendations contained in this report will result in an estimated annual net saving of approximately $63,400 from the 1997 actual cost of nine contracted trucks. While one truck is being totally eliminated, the saving is largely offset by the new hourly rate for the remaining hired equipment which has increased from the former range of $66.57 to $71.50 per hour to $75.99 per hour for all of the hired trucks. As the number of trucks will only be reduced for the second half of the year the 1998 saving is further reduced to $31,700.

 Sufficient funds are available in Scarborough=s portion of the amalgamated Toronto operating budget to fund this service in 1998.

 Recommendations:

 That three of the nine garbage packers traditionally contracted in the former City of Scarborough be eliminated as a contracted service with the expiry of the current contract on June 30, 1998.

 That the contracted service for six garbage packers and associated staff be reported to the Bid Committee for award to the low bidder.

 That two surplus City owned garbage packers be placed into service effective July 2, 1998 to be operated by members of C.U.P.E. Local 416 (368).

 That dependent upon the approval of recommendations one through three, the nine trucks previously in service be reduced to eight.

 Background:

 The Works and Utilities Committee Meeting on March 25, 1998 had before it a report dated March 3, 1998 from the Interim Functional Lead for Solid Waste Management, copy attached. This report provided historical data on the use of hired garbage packers in the former City of Scarborough; advised that the current contract for this service will expire on June 30, 1998, and was in the process of being tendered; and recommended that the report be received for information.

 The Committee received the aforementioned report and requested that:

 (1)the Commissioner of Works and Emergency Services proceed with the tendering process, invite the Union to submit their proposal as part of that process, and submit a report to the Committee on whether the Union has expressed interest in bidding, and on the tender award;

 (2)the tendering process permit bids by outside individuals based on the used City-owned vehicles;

 (3)the nine best vehicles be retained to ensure that there are sufficient vehicles in-house; and

 (4)the Commissioner of Works and Emergency Services further report on the use of hired garbage packers elsewhere in the City.

 Discussion:

 For the past six years management has worked closely with the former C.U.P.E. Local 368 Executive in a concerted and generally cooperative effort to make the services provided by Scarborough=s Waste Management Division cost competitive with the private sector. In the area of waste collection we have succeeded. In 1997 the actual cost to collect garbage with the nine hired trucks, as provided by four independent contractors, ranged from $42.38 to $47.61 per tonne. Scarborough=s cost using City staff was $46.70 per tonne. The contract cost includes $1.35 per tonne for staff supervision of the contract. The Scarborough cost is based on a loaded labour rate of $40.00 per hour which includes all overhead such as benefits, clothing, supervision and the provision of replacement staff during illness, vacation etc. In actual fact, 1997 staff productivity averaged 9.5% higher than that of the hired trucks but this saving was offset by the difference in the hourly rates.

 At a meeting with the Union the concept of them bidding on this work was discussed. It is the Union=s position that it does not bid on City work. Notwithstanding, it is managements position that the interests of the tax payer can best be served by eliminating the two least productive hired trucks and replacing them with our own forces. As the trucks tendered are 25 cu. yd. tandem axle vehicles, the contractor(s) will be expected to attain the same productivity improvement that the City gained when converting to these larger vehicles. This will enable management to completely eliminate the need for one truck.

 An inspection of the City=s fleet of surplus garbage packers has revealed two units, in excess of our requirement for daily operational spare vehicles, that could be made operational with limited expense. As productivity improvements are introduced across the City it is anticipated that newer units will become available.

 The cost to operate six hired trucks in combination with two City vehicles is estimated at $1,216,145 for a full year. This estimate is based on the actual hours charged in 1997 and allowing for the improved productivity of the larger tandem vehicles. The actual cost in 1997 was $1,279,513. This represents an annual cost saving of approximately $63,400.

 As directed by Committee, bids were also requested for the provision of labour only with the intent that the contractor=s staff would operate City equipment. Competitive bids were received ranging from $17.80 to $48.00 per hour. However, this method of operation is not considered a viable option. As an Aarms length@ relationship would not be maintained, these employees could be deemed employees of the City under the terms of the applicable collective agreement. Further, as they would be taking daily direction from City supervisors our liability in the event of an injury would be greatly increased.

 Committees= request for a further report on the use of hired garbage packers elsewhere in the City has been complied with in the form of a staff report entitled AProcedures for Re-tendering Existing Contracts for Waste Collection and Provision of Opportunity for the City=s Unionized Workers to Propose Having This Work Carried Out on an In-House Basis.@ This report dated April 9, 1998 was submitted to Committee at its April 22 meeting and approved as submitted.

Conclusion:

 Waste collection staff in the former Scarborough have worked diligently to reduce operating costs in realization and acceptance of the need to be competitive with the private sector. The reduction of hired garbage packers from nine to six will reward that effort while further reducing this years operating costs by $31,700 from the 1997 level.

 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

 Attach.reports\6.rpt