TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

 As Considered by

The Council of the City of Toronto

on December 16 and 17, 1998

WORKS AND UTILITIES COMMITTEE

REPORT No. 12

1Termination and Modification of Waste Haulage Contracts

City of Toronto

REPORT No. 12

OF THE WORKS AND UTILITIES COMMITTEE

(from its meeting on December 16, 1998,

submitted by Councillor Betty Disero, Chair)

As Considered by

The Council of the City of Toronto

on December 16 and 17, 1998

  1

Termination and Modification of Waste Haulage Contracts

(City Council on December 16 and 17, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the recommendations embodied in the confidential communication (December 16, 1998) from the City Clerk with respect to:

(1)the recommendation of the Budget Committee embodied in the confidential Committee Transmittal (December 10, 1998) from the City Clerk entitled "Keele Valley Landfill Site - Filling Options", as amended by the recommendation of the Strategic Policies and Priorites Committee embodied in the confidential Committee Transmittal (December 15, 1998) from the City Clerk; and

(2)the confidential report (December 14, 1998) from the Commissioner of Works and Emergency Services entitled "Termination and Modification of Waste Haulage Contracts",

a copy of which has been forwarded to Members of Council under confidential cover.

(City Council on December 16 and 17, 1998, had before it, during consideration of the foregoing Clause, the following confidential communication (December 16, 1998) from the City Clerk:

The Works and Utilities Committee recommends:

(A)the adoption of the recommendation of the Budget Committee, embodied in the confidential Committee Transmittal (December 10, 1998) from the City Clerk, subject to amending the recommendation by deleting the words "subject to details of the contract being submitted to the Works and Utilities Committee", as recommended by the Strategic Policies and Priorities Committee in the confidential Committee Transmittal (December 15, 1998) from the City Clerk, so that such recommendation reads as follows:

"That the General Manager, Solid Waste Management Services Division, Works and Emergency Services Department, be authorized to enter into negotiations to increase the annual volume of waste export to Michigan."; and

(B)the adoption of the confidential report (December 14, 1998) from the Commissioner of Works and Emergency Services, entitled "Termination and Modification of Waste Haulage Contracts", subject to:

(a)amending Recommendation No. (1) by adding thereto the following:

"such termination to be effective January 31, 1999, or such earlier date as agreed upon by Canadian Waste Services Inc. and the Commissioner of Works and Emergency Services"; and

(b)adding thereto the following recommendations:

"(3)subject to adoption of Recommendations Nos. (1) and (2), the effective date of the increase of 450,000 tonnes per annum in the amount of waste being disposed of at Browning-Ferris Industries' Arbor Hills Landfill, as previously authorized by Council, be extended to January 1, 2000, from June 1, 1999; and

(4)staff be authorized to execute any documents required to effect to the foregoing",

so that such recommendations read as follows:

"(1)the offer presented by Canadian Waste Services Inc. to terminate the haulage agreements at the Commissioners and Disco Transfer Stations with Canadian Waste Services Inc. under the terms and conditions outlined in the letter, dated December 11, 1998, from Canadian Waste Systems Inc., attached to this report, be accepted, such termination to be effective January 31, 1999, or such earlier date as agreed upon by Canadian Waste Services Inc. and the Commissioner of Works and Emergency Services";

(2)acceptance of the offer of termination by Canadian Waste Services Inc. be conditional on the acceptance by Browning-Ferris Industries Ltd. of the extension of its haulage and disposal services to include the Commissioners Transfer Station concurrent with the termination of the Canadian Waste Services Inc. contracts;

(3)subject to adoption of Recommendations Nos. (1) and (2), the effective date of the increase of 450,000 tonnes per annum in the amount of waste being disposed of at Browning-Ferris Industries' Arbor Hills Landfill, as previously authorized by Council, be extended to January 1, 2000, from June 1, 1999; and

(4)staff be authorized to execute any documents required to effect to the foregoing."

The Works and Utilities Committee reports, for the information of Council, having directed that this matter be forwarded directly to Council for consideration at its meeting on December 16, 1998. (Clause No. 1 of Report No. 12 of The Works and Utilities Committee, entitled "Termination and Modification of Waste Haulage Contracts".)

(Committee Transmittal dated December 10, 1998,

from the City Clerk, headed

"Keele Valley Landfill Site - Filling Options")

Recommendation:

The Budget Committee on December 8, 1998, recommended to the Works and Utilities Committee that the General Manager, Solid Waste Management Services Division, Works and Emergency Services Department, be authorized to enter into negotiations to increase the annual volume of waste export to Michigan, subject to details of the contract being submitted to the Works and Utilities Committee.

Background:

The Budget Committee had before it confidential Briefing Notes submitted by the General Manager, Solid Waste Management Services Division, Works and Emergency Services Department, outlining details of a proposal to increase the volume of waste exported to Michigan.

     (Committee Transmittal dated December 15, 1998,

from the City Clerk)

Recommendation:

That the recommendation of the Budget Committee contained in the confidential communication (December 10, 1998) from the City Clerk be adopted subject to amending the Recommendation by deleting the words "subject to details of the contract being submitted to the Works and Utilities Committee", so as to read:

"That the General Manager, Solid Waste Management Services Division, Works and Emergency Services Department, be authorized to enter into negotiations to increase the annual volume of waste export to Michigan."

Background:

At its meeting on December 15, 1998, the Strategic Policies and Priorities Committee gave consideration to the communication (November 19, 1998) from the City Clerk forwarding the action of the Budget Committee from its meeting of November 18, 1998, to the Strategic Policies and Priorities Committee and Council, and recommending that financial implications and costs be considered during the Budget Committee deliberations on the 1999 Operating Budget.

The Committee also had before it the confidential transmittal letter (December 10, 1998) from the City Clerk forwarding the action taken by the Budget Committee at its meeting on December 8, 1998.

For the information of the Works and Utilities Committee, the Committee noted that the matter of the Keele Valley Landfill Site would be considered by the Works and Utilities Committee at its Special Meeting on December 16, 1998, made the foregoing recommendation in this respect and adopted the recommendations of the Budget Committee contained in the report (November 19, 1998) from the City Clerk.

(Report dated December 14, 1998, from

the Commissioner of Works and Emergency Services,

headed "Termination and Modification of Waste Haulage Contracts")

Purpose:

The purpose of this report is to obtain Council authority to terminate waste haulage services by Canadian Waste Services Inc. (CWS) and to provide for additional haulage services by Browning-Ferris Industries Ltd. (BFI) to include the Commissioners Transfer Station under the provisions of its current agreement for haulage and disposal services in order to realize cost savings in the Solid Waste Management Services (SWM) 1999 operating budget.

Funding Sources, Financial Implications and Impact Statement:

It is estimated that there will be a cost avoidance of approximately $1.4 million in the 1999 operating budget expenditures for the SWM division. In addition, the City acquires assets consisting of nine trailers at an estimated value of $800,000.00.

Recommendations:

It is recommended that:

(1)the offer presented by Canadian Waste Services Inc. to terminate the haulage agreements at the Commissioners and Disco Transfer Stations with Canadian Waste Services Inc. under the terms and conditions outlined in the letter, dated December 11, 1998, from Canadian Waste Systems Inc., attached to this report, be accepted;

(2)acceptance of the offer of termination by Canadian Waste Services Inc. be conditional on the acceptance by Browning-Ferris Industries Ltd. of the extension of its haulage and disposal services to include the Commissioners Transfer Station concurrent with the termination of the Canadian Waste Services Inc. contracts; and

(3)this report be sent directly to City Council for its consideration at its meeting on December 16, 1998.

Council Reference/Background/History:

At its meeting held on October 12, 1994, the former Metro Council adopted, without amendment, Clause No. 30 of Report No. 28 of its Management Committee, headed "Haulage of Waste and Yard Waste from the Commissioners Street Transfer Station." The report contained a recommendation that the contract to supply all personnel and equipment to transport waste from the Commissioners Street Transfer Station to the Keele Valley and Brock West Landfill Sites be awarded to Jarsno Equipment Incorporated, including all alternative prices, for a period of 60 months, commencing on or about June 1, 1995. Due to construction delays, the Commissioners Street Transfer Station did not open until January 1, 1997. As a result, the starting date for the waste haulage contract was moved to January 2, 1997, and is scheduled to terminate on January 1, 2002.

Since the award of the contract, Jarsno Equipment Inc. has been acquired by CWS. CWS is currently nearing the end of the second year of the Commissioners Street Transfer Station waste and yard waste haulage contract.

At its meeting held on August 16 and 17, 1995, Metro Council adopted Clause No. 31(f) of Report No. 14 of The Environment and Public Space Committee, headed "Haulage of Waste and Recyclable Material from the Disco Transfer Station - Contract SWM-3-95." The report included the recommendation that Contract No. SWM-3-95 to transport solid waste from the Disco Transfer Station to the Keele Valley or Brock West Landfill Sites and recyclable materials to processing facilities from the Disco Transfer Sation be awarded to Jarsno Equipment Incorporated at the unit prices tendered, for a period of 60 months commencing on or about January 1, 1996.

That contract (which, as indicated above, has been assumed by CWS) is currently nearing the end of the third year of the Disco Transfer Station haulage.

At its meeting held on October 1 and 2, 1998, City of Toronto Council adopted Clause No. 1 of Report No. 8 of The Works and Utilities Committee entitled "Keele Valley Landfill Site - Filling Options" with the following amendment: "It is further recommended that the financial implications and costs be referred to the Budget Committee for consideration in the 1999 budget." At its meeting held on December 8, 1998, the Budget Committee approved the concept of terminating the agreements with CWS and modifying the amount of waste sent to Michigan in 1999 subject to the details of the contract being considered by the Works and Utilities Committee.

Comments and/or Justification:

The option for the filling of the Keele Valley Landfill adopted by City Council was going to create an increase in expenditure in the 1999 budget of $4.3 million. City Council authorized staff to increase the amount of waste being disposed of at the BFI landfill in Michigan to 450,000 tonnes per annum commencing on June 1, 1999. The total tonnes of waste shipped to Michigan in 1999 under this scenario would equal 366,000 tonnes. An opportunity has arisen which would allow the City to send 325,000 tonnes of waste to BFI's landfill effective early in 1999, and as a result, allow staff to terminate the haulage contracts for waste and recyclable materials at the Commissioners and Disco Transfer Stations resulting in a cost reduction in the 1999 operating budget of approximately $1.4 million thereby reducing the overall increase in the 1999 budget due to the export of waste from $4.3 million down to approximately $2.9 million. CWS has forwarded a letter dated December 11, 1998, which has been attached to this report, which offers the City of Toronto an opportunity to terminate the haulage agreements for waste and recyclables at the Disco and Commissioners Transfer Stations under certain terms and conditions. We believe that the terms and conditions are favourable to the City and will allow us to realize a reduction in our 1999 budget if we accept the offer, since the haulage services presently being provided by CWS at the two transfer stations can be provided by BFI and City forces at a rate less than or equal to what CWS presently charges the City as shown on Table 1. In addition, we will be entitled to add nine relatively modern trailers to our aging haulage fleet that will make the City of Toronto haulage forces more efficient.

Conclusions:

If staff are given the authority to terminate the haulage contracts with CWS and extend the haulage and disposal services with BFI, it could result in a cost avoidance of approximately $1.4 million in the 1999 operating budget.

 Contact Name:

Angelos Bacopoulos, P. Eng.

General Manager, Solid Waste Management Services Division

Phone: (416) 392-8831; Fax: (416) 392-4754

email: angelos_bacopoulos@metrodesk.metrotor.on.ca.

(Table 1)

Net Financial Impact of Sending 325,000 Tonnes of Waste to Arbor Hills, Michigan in 1999

 Total Transfer Station Operations Savings(722,000)

Keele Valley Operational Savings based on lower royalties, etc.

for a reduction of 70,000 tonnes(187,000)

Cost to Send 70,000 Additional Tonnes to Arbor Hills3,751,300

Total Impact on 1999 Budget$2,842,300

(A copy of the confidential briefing note, submitted by the General Manager, Solid Waste Management Services Division, Works and Emergency Services, referred to in the foregoing Committee Transmittal dated December 10, 1998, and the confidential communication dated December 11, 1998, from Mr. Wilf Goldlust, Divisional Vice President, Canadian Waste Services Inc., referred to in the foregoing report dated December 14, 1998, from the Commissioner, Works and Emergency Services, are on file in the office of the the City Clerk.)

      Respectfully submitted,

BETTY DISERO,

Chair

Toronto, December 16, 1998

 (Report No. 12 of The Works and Utilities Committee, including additions thereto, was adopted, without amendment, by City Council on December 16 and 17, 1998.)