August 25, 1999

To:Works Committee

From:Barry H. Gutteridge

Commissioner, Works and Emergency Services

Subject:Termination of the Metro Waste Paper Inc. Container Processing Contract

Purpose:

To obtain Council authority to terminate the Blue Box container material processing contract between the City of Toronto and Metro Waste Paper Inc. to be effective on or about December 15, 1999.

Funding Sources, Financial Implications and Impact Statement:

The termination of the current container processing contract with Metro Waste Paper Inc. will result in decreased operating costs of approximately $126,000.00 per year associated with the transfer and processing of the City's Blue Box commingled container material.

Recommendation:

It is recommended that staff be authorized to negotiate the termination of the existing Blue Box container material processing contract between the City of Toronto and Metro Waste Paper Inc. to be effective on or about December 15, 1999.

Council Reference/Background/History:

At its meeting held on May 29, 1996, the Council of the City of North York adopted Clause No. 5 of Report No. 8 of the Works Committee which recommended that the City of North York enter into an agreement with Metro Waste Paper Inc. to receive, process, market and sell all containers collected in the City of North York under the City's Recycling Program.

Comments and/or Discussion and/or Justification

The Metro Waste Paper Inc.'s commingled container processing contract commenced on July 9, 1996, and was scheduled to terminate three years thereafter. Prior to the scheduled termination date (July 9, 1999), the City opted for a one year extension under the terms of the contract to provide adequate time for the construction, commissioning and opening of the Dufferin Material Recovery Facility (MRF). The intent was to redirect material currently processed by Metro Waste Paper Inc. to the Dufferin MRF upon its opening.

Miller Waste Systems, the company that was awarded the contract to design, construct and operate the Dufferin MRF, anticipates that the facility should be ready for commissioning by mid-December, 1999, barring any unforseen delays in the construction schedule. The termination of the Metro Waste Paper Inc. contract to be effective on or about December 15, 1999, will enable the City to begin directing material to the Dufferin site in time for plant commissioning. Metro Waste Paper Inc. is agreeable to the early termination of the contract extension because the lease is expiring on the building where the processing line is located.

Metro Waste Paper Inc. currently receives, processes and markets approximately 6000 tonnes per year of commingled container material collected in the North York community. The processing costs to the City, which are approximately $90.00 per tonne (full GST), include a processing fee of $68.00 per tonne, a five (5) percent share of revenue from the sale of the marketed material and a $17.00 per tonne transfer fee to haul the unprocessed material from City of Toronto facilities to Metro Waste Paper Inc.'s sorting line.

Once the Dufferin MRF is fully operational, it will receive approximately 20,000 tonnes of commingled container material per year at a processing rate of $69.00 per tonne, including GST. Therefore, shifting the North York container material to the Dufferin MRF will result in an annual operating cost saving of $126,000.00 (6000 tonnes x $21.00/tonne).

The balance of the 20,000 tonnes of material destined for the Dufferin MRF will include approximately 14,000 tonnes from the Community Council Areas of York, Scarborough and Etobicoke which are currently being processed at the Commissioners Street MRF. The Commissioners Street facility currently processes approximately 30,000 tonnes annually. Therefore, once the Dufferin MRF is operational and the Metro Waste Paper Inc. contract has been terminated, the Commissioners Street MRF will handle the remaining 16,000 tonnes of material at a processing rate of $66.50 per tonne, including GST.

Conclusion:

We recommend that the Metro Waste Paper Inc. commingle container material processing contract be terminated on or about December 15, 1999. This will enable the City to prepare for the opening of the Dufferin MRF and to ultimately reduce its per tonne processing costs for commingled container material.

Contact Name:

Andrew Pollock

Director, Policy and Planning

Solid Waste Management Services

Works and Emergency Services

Phone: 392-4715

Fax: 392-4754

E-mail: andy_pollock@metrodesk.metrotor.on.ca

Angelos BacopoulosBarry H. Gutteridge

General ManagerCommissioner

Solid Waste Management ServicesWorks and Emergency Services

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