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Extension of Contract No. 50130 - Provision of
Bulk Lift Garbage and Recycling Collection Services -
Toronto and York Community Council Areas
The Works and Utilities Committee recommends the adoption of the reports dated January 28, 1998 and February 2, 1998, from the Interim Functional Lead for Solid Waste Management.
The Works and Utilities Committee reports, for the information of Council, having:
(1) directed that:
(i) the Chair of the Committee, Councillors Altobello, Layton, and Saundercook, and appropriate staff, be requested to meet with representatives of the Toronto Civic Employees= Union, Local 416, prior to the meeting of Council scheduled to be held on March 4, 1998;
(ii) the Interim Functional Lead for Solid Waste Management be requested to provide information to the aforementioned Councillors on the issues raised during the meeting of the Committee; and
(iii) if necessary, a special meeting of the Works and Utilities Committee be held at the call of the Chair prior to the meeting of Council scheduled to be held on March 4, 1998, and that representatives of the Toronto Civic Employees= Union, Local 416, be invited to appear before the Committee at that time; and
(2) requested the Interim Functional Lead for Solid Waste Management to submit a report to the Committee by April 1998 on timelines and cost comparisons of all existing bulk lift contracts in the former municipalities.
The Works and Utilities Committee submits the following reports from the Interim Functional Lead for Solid Waste Management:
(January 28, 1998, headed AExtension of Toronto Community
Council Area Bulk Lift Contract No. 50130 for the Collection
of Garbage and Recyclable Materials@)
Purpose:
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.
Funding Sources, Financial Implications and Impact Statement:
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.
Recommendation:
That Contract No. 50130 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.
Background:
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:
A INFORMATION TO TENDERERS
5. TERM OF CONTRACT
Work on this Contract shall commence on or about MAY 31, 1993 and shall continue for five (5) years. The Contract may be renewed for an additional 3-year period at the Commissioner=s option. Work shall not commence until the Contractor has signed the Contract and obtained a written order to commence the same signed by the Commissioner of Public Works and the Environment.
Tender price for the 3-year renewal option shall be stated in current 1993 dollars. Should this option be exercised by the Commissioner, this price will be adjusted using the price adjustment formula described in Section IV, D, 2), c) of the Specifications.@
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.
Comments:
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. 50130 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 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
|
Community Council Area |
Contractor |
Cost/Tonne Incl. All Taxes for Garbage Collection** |
|
East York |
BSD Environmental |
$14.70 |
|
Etobicoke |
CWSI |
$19.33 |
|
Etobicoke |
CWSI |
$17.57 |
|
North York |
Miller Waste |
$18.83* |
|
Scarborough |
J&F Waste Systems |
$13.14 |
|
Toronto |
CWSI |
$19.82 |
|
York |
CWSI |
$15.46 |
* 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 options 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 retendered 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.
Conclusion:
Extension of the current contract has been determined to be competitive. Authorization should be given to extend Contract No. 50130 for three years, based on the terms of the existing contract.
Contact Name and Telephone Number:
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
CCCC
(February 2, 1998, headed AModification to Toronto Community
Council Area Bulk Lift Contract No. 50130 to Add
Bulk Lift Collection for the York Community Council Area@)
Purpose:
To decide on the method of providing bulk lift garbage and recycling collection for high-rise apartments in the York Community Council Area from June 1, 1998 to June 17, 2001.
Funding Sources, Financial Implications and Impact Statement:
Adoption of the recommendations in this report will result in the maintenance of bulk lift garbage and recycling collection services in the Toronto and York Community Council areas with no change in the combined taxation costs for the two Community Council areas. The current annual cost of providing these services is approximately $1,600,000.00 per year, including GST.
Recommendations:
It is recommended that Contract No. 50130 be amended as follows:
(1) to provide for the inclusion of the provision of bulk lift garbage and recycling services to the York Community Council area effective June 1, 1998 until June 17, 2001;
(2) that on June 1, 1998, the unit prices in the contract be amended as follows:
Garbage Collection and Delivery to Disposal $18.79 per tonne
Recycling Collection and Delivery to Processing $44.62 per tonne
Bulky Item Collection and Delivery to Disposal $64.40 per tonne
White Goods Collection and Delivery to Processing $71.27 per tonne;
and
(3) that the cost adjustment formula in Contract No. 50130 be applied to the unit prices imputed for 1993 based on the unit prices shown in Recommendation No. (2) above and shown below on June 21, 1998, and subsequent contract anniversary dates as provided in the contract documents;
Garbage Collection and Delivery to Disposal $17.48 per tonne
Recycling Collection and Delivery to Processing $41.50 per tonne
Bulky Item Collection and Delivery to Disposal $59.90 per tonne
White Goods Collection and Delivery to Processing $66.29 per tonne;
and that the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.
Council Reference/Background/History:
In my report (January 28, 1998) entitled AExtension of Toronto Community Council Area Bulk Lift Contract No. 50130 for the Collection of Garbage and Recyclable Materials@, it is recommended that Contract No. 50130 be extended for three years. York Community Council Contract No. 95-5-S-8-F expires on May 31, 1998. There is no provision in this contract for extension.
The services provided both under Toronto Community Council Area Contract No. 50130 and York Community Council Area Contract No. 95-5-S-8-F are provided by Canadian Waste Services Inc. (CWSI). Contract No. 50130 is carried out using approximately six bulk lift collection vehicles and Contract No. 95-5-S-8-F is carried out using between one and two bulk lift collection vehicles.
Comments and/or Discussion and/or Justification:
It is necessary to decide how to proceed to continue the provision of bulk lift collection services in the York Community Council area. Two options are available to City Council: calling of tenders or amalgamation of the work with Toronto Community Council Area Contract No. 50130. Both of these alternatives are reviewed below.
(1) Calling Tenders for Work:
This would involve a tender call with a short lead time prior to closing of tenders (approximately one month). Due to the limited lead time prior to the required tender award and the fact that any tender award recommendation would have to be brought before the April 22, 1998 meeting of the Works and Utilities Committee, there may be limited competition in prices bid. It is likely that bid prices will exceed the current unit price of $15.73 per tonne, including GST, for garbage collection. There is also a need for a period of stability so that we can plan the amalgamation of the Solid Waste Services from the various Community Council areas. Accordingly, this is not the preferred plan for continuing bulk lift collection services.
(2) Amalgamate the Provision of York Bulk Lift Contract No. 95-5-S-8-F
Services with Toronto Contract No. 50130:
The contractor for Contract No. 50130 (CWSI) has agreed to adjust the unit prices for the contract in such a way that the total cost to the City remains the same for the collection of garbage and recyclable materials in the Toronto and York Community Council areas as under the two existing contracts. The CWSI proposal is shown in Table 1.
Since the amalgamated unit prices will result in no cost increase to the City and security of service provision in York and Toronto, the amalgamation of the two contracts is the preferred arrangement.
Table 1
Proposed Unit Prices for Amalgamation of York and Toronto
Bulk Lift Garbage and Recycling Collection Contracts
|
|
Apartments (Garbage) |
Apartments (Recycling) |
Apartments (Bulky Items) |
Total |
|
1996 Collected Tonnes |
Toronto |
47,118 |
6,718 |
1,364 |
55,200 |
|
York |
13,800 |
962 |
354 |
15,116 |
|
Total |
60,918 |
7,680 |
1,718 |
70,316 |
|
Annual Cost Based on Existing Unit Prices |
Toronto |
$927,753 |
$301,638 |
$105,069 |
$1,334,461 |
|
Unit Price |
$19.69 |
$44.90 |
$77.03 |
n/a |
|
York |
$217,074 |
$41,019 |
$5,568 |
$263,661 |
|
Unit Price |
$15.73 |
$42.64 |
$15.73 |
n/a |
|
Total |
$1,144,827 |
$342,657 |
$110,637 |
$1,598,122 |
|
Proposed Amalgamated Unit Price* |
$18.79 |
$44.62 |
$64.40 |
n/a |
Note: Unit price for White Goods collection remains unchanged because this item is not included in York Community Council Area Contract No. 95-5-S-8-F.
* Proposed amalgamated unit prices result in no change in the total annual cost.
Conclusions:
Amendment of Contract No. 50130 to include the York Community Council area at the revised amalgamated unit prices shown in this report has been determined to be cost competitive. Authorization should be given to amend Contact No. 50130 to include the York Community Council area at the revised amalgamated unit prices shown in this report.
Contact Name and Telephone Number:
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: Ajwarren2@city.toronto.on.ca@
The Works and Utilities Committee reports, for the information of Council, having also had before it during consideration of the foregoing matter the following communications:
(i) (February 10, 1998) from Mr. Tommy Lenathen, Vice-President, Toronto Civic Employees= Union, Local 416, requesting that consideration of the report dated January 28, 1998, regarding extension of the contract for the provision of bulk lift garbage and recycling collection services, be deferred until the next meeting of the Committee; and
(ii) (February 11, 1998) from Ms. Karen Buck, Toronto, Ontario, respecting Contract No. 50130 and the provision of bulk lift garbage and recycling collection services for the Toronto and York Community Council areas.
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