October 26, 1999
To: Works Committee
From: Barry H. Gutteridge
Commissioner, Works and Emergency Services
Subject: Toronto Integrated Solid Waste Resource Management Process
Request for Proposals for Proven Diversion Services
Purpose:
The purpose of this report is to seek Council authority to issue the Toronto Integrated Solid Waste Resource Management
Process ("TIRM") Request for Proposals ("RFP") for Proven Diversion Services.
Funding Sources, Financial Implications and Impact Statement:
There are no direct financial considerations arising from this report.
Recommendation:
It is recommended that the Toronto Integrated Solid Waste Resource Management Process Request for Proposals for
Proven Diversion Services be approved for issuance on or about December 1, 1999, substantially in accordance with the
Request for Proposals document attached to this report as Appendix "A".
Council Reference/Background/History:
On October 2, 1998, City Council provided direction to the Commissioner of Works and Emergency Services to:
"…immediately proceed to engage the marketplace to secure solid waste management options including waste diversion
and disposal capacity to meet the City's long-term requirements through a Request for Expressions of Interest and Request
for Proposals process based on the work undertaken in the planning process to date, but without proceeding to the
submission of an environmental assessment." (Clause No. 2 of Report No. 8 of the Works and Utilities Committee).
In addition, City Council provided direction on a comprehensive range of policy and operational matters, which are
summarized below:
- the establishment of a 50 percent diversion rate by the year 2006 or sooner;
- inclusion of potential export to the United States;
- inclusion of Energy from Waste ("EFW") technology as a marketplace option;
- engagement of Regional governments in the Greater Toronto Area as potential partners with Toronto for future disposal
capacity contracts;
- active consideration of potential partnership proposals with Toronto that may contain a range of options including transfer
of ownership or leasing arrangements; and
- preparation of a planning process to engage the marketplace that includes public and industry consultation and
development of multi-faceted evaluation criteria.
At its meeting of April 13, 14, and 15, 1999, City Council approved the issuance of the Request for Expressions of Interest
("REOI") document for three categories: Category 1, Proven Diversion; Category 2, Proven Disposal; and Category 3, New
and Emerging Technologies.
On April 26, 1999, the TIRM REOI was issued as per the Council approved schedule. The TIRM REOI closed on May 31,
1999. A subsequent report, dated July 5, 1999 from the Commissioner of Works and Emergency Services, provided
members of the Works Committee and Toronto City Council with the results of the application of the evaluation criteria to
the thirty-two (32) submissions received in response to the TIRM REOI. Of the thirty-two responses received, twenty-three
(23) were identified as qualified to proceed to the Request for Proposals ("RFP") stage (TIRM - Stage 3), with eight (8)
responses qualified in Category 1, Proven Diversion Capacity.
On July 27, 28, and 29, 1999, City Council adopted recommended amendments to the TIRM project schedule. The
amendments further integrate the RFP processes for acquiring new disposal capacity and for diversion capacity, and will
provide Council with the ability to make decisions on disposal and diversion options in an integrated manner.
At its meeting of September 28, 29, and 30, 1999, City Council approved the issuance of a RFP for Proven Disposal
Services, and adopted a recommendation to engage MacViro Consultants Inc., and Tory Tory DesLauriers & Binnington,
to assist staff in the RFP process for new diversion capacity. The RFP for Disposal Services closes on December 15, 1999.
City Council also authorized at that time the Commissioner of Works and Emergency Services not to proceed with the
design and issuance of an RFP for New and Emerging Technologies, under Category 3 of the TIRM Process. The
Commissioner was also authorized to develop a secondary planning process for the potential engagement of the types of
proposals previously submitted under Category 3 of the TIRM Process.
Comments and/or Discussion and/or Justification:
The attached RFP for solid waste diversion services has incorporated the body of policy decisions made by Council during
the course of the TIRM Process. The RFP is designed to provide the City with new diversion capacity to meet and
potentially exceed City Council's policy objective of 50 percent diversion of the residential waste stream by 2006 or
sooner.
The RFP is premised on a "design, build, own, operate, and transfer" process for the Respondents. It provides the City with
the ability to engage the marketplace for the provision of diversion technologies and the marketing of recovered resources
on a fee per tonne basis. Should a City-owned site be used the City would have the option to purchase an operating facility
at a depreciated price at 2, 5, 10, and 15-year intervals, following the initiation of operations. At the end of the 20-year
operating period Toronto will have the right, at its sole discretion, to take over the ownership of the facility at no cost.
The RFP provides Respondents with the option of siting a facility on their own property (leased or owned outright) or
proposing siting a facility at a City-owned transfer station or other City property.
For the purpose of this RFP, potential utilization of the Scarborough Transfer Station (near Markham Road and Sheppard
Avenue East) is proposed for comparative purposes. The Scarborough site has existing amenities such as weigh scales,
waste compaction equipment, and an existing Certificate of Approval for solid waste management.
The potential utilization of a transfer station follows the established policy of siting diversion facilities at transfer stations.
The City currently has a Materials Recovery Facility operating at the Commissioners Street Transfer Station in the
Portlands, and is proceeding to construct a new Materials Recovery Facility and a mixed waste recycling and organics
processing facility at the Dufferin Street Transfer Station (near Dufferin Street and the 401). The facility at the Dufferin
Street Transfer Station has the potential to expand to a throughput capacity of 100,000 tonnes of mixed waste per year or
150,000 tonnes or organics per year.
Additional transfer stations and other City-owned land may be subsequently identified as we proceed to consider
implementation of diversion facilities.
The option of utilization of City-owned facilities is being proposed through the RFP for Diversion Services, unlike the RFP
for Disposal Services, for several reasons, which are summarized as follows:
- The approvals process for certain types of diversion facilities is different from that of a disposal facility. If the City were
to offer City-owned land for a disposal facility we would be virtually assured of being named as a co-proponent in an
Environmental Assessment under the Ontario Environmental Assessment Act. By contrast, the approvals process for
facilities processing leaf and yard waste and some source separated materials is governed by Standardized Approval
Regulations ("SARs"). The SARs allow for approvals without proceeding through an individual Environmental
Assessment or the issuance of a Certificate of Approval. Other approvals for diversion facilities may require a Certificate
of Approval. There remains the potential for the Minister of the Environment to designate any diversion facility under the
Environmental Assessment Act;
- Utilization of existing facilities reduces the costs associated with the diversion projects and therefore assists in meeting
Council's policy objective of 50 percent diversion by 2006 or sooner;
- Our transfer stations are currently receiving and handling large volumes of solid waste and have established traffic pattern
flows and hours of operation, and provide at-hand the means to manage residuals that require disposal; and
- Utilization of our transfer stations demonstrates a commitment and willingness to manage a percentage of our solid waste
resources within the City, and reduces transportation impacts associated with the movement of solid waste resources
beyond our borders.
In accordance with City Council's policy objectives, the RFP for Diversion Services is designed to provide the City with
the flexibility to address future policy modifications and solid waste resource market changes, through the following
means:
- for a facility located on Toronto property the RFP provides Toronto with the ability to acquire ownership at 2, 5, 10, and
15-year intervals and to integrate City staff (union and management) into the plant operations one-year prior to the transfer
of ownership to facilitate a skills and knowledge exchange;
- the RFP provides Toronto with the ability to renegotiate the operating and maintenance fee per tonne at 2, 5, 10, and
15-year intervals to account for any increases in the prices of products;
- Respondents can offer partnership proposals for alternative revenue and risk sharing arrangements, in addition to
mandatory fee per tonne proposals;
- Toronto can ensure that material coming into a diversion facility on City-owned land is City-only material;
- a preferred customer clause will be in place for facilities on non-Toronto land, where Toronto is providing for over fifty
(50) percent of the materials managed;
- Toronto can have the Respondent assume all risk for marketing output materials, or re-negotiate to receive a percentage
of the revenue for marketed materials;
- Toronto maintains ownership of all associated emission credits, including greenhouse gases reduction credits; and
- Toronto will have the option to contract with one or more Respondents offering a range of technologies, including the
ability to manage mixed waste and/ or source separated organics, and/or leaf and yard wastes.
Development and Application of Evaluation Criteria
The evaluation process includes the initial application of mandatory screening criteria followed by the application of the
following four comparative evaluation criteria:
(1) Net Greenhouse Gas Emissions (15 points);
(2) Traffic Impact (10 points)
(3) Jobs and Investment (15 points - 10 in Toronto and 5 in Ontario); and
(4) Waste Diversion Rate to System Cost Ratio (60 points - as it captures both diversion and cost).
The evaluation criteria will be applied to the Respondents' service proposals. The service proposal will consist of the
Respondents' technical (environmental) proposal, price proposal (fee per tonne), exceptions and partnership offers. Part A,
Section 5 and Appendix B of the RFP document provide a description of the mandatory and comparative evaluation
criteria and the process to identify top-qualified proposals.
The top-qualified proposals will then be carried forward to City Council following the evaluation, including the
consideration of any partnership offers. At that time we will seek Council's authorization to proceed with due diligence and
contract negotiations.
The project schedule calls for the top-qualified proposals to be before Council in April 2000, with a recommendation(s)
regarding engagement in contracts in August- September 2000.
Stakeholder Consultation on Diversion
Prior to the development of the Diversion RFP document, stakeholders were invited to a meeting, held on September 9,
1999, at Toronto City Hall. The purpose of the meeting was to solicit stakeholder input on the evaluation methodology to
be used in the selection of top-ranked proposals. A letter dated August 30, 1999 was sent out to those on the project
database inviting them to participate. This database includes all those who have expressed an interest in this project in the
past. In addition, advertisements inviting the public to this meeting were placed in City of Toronto community newspapers
during the week of August 30, 1999. (Comments were also invited by telephone, fax, e-mail and mail.) As a result of this
meeting, the following three "high priority" evaluation criteria were identified by the participants: health and the
environment; residue threshold; and quality of the end product.
The project's newsletter (Volume 2, Bulletin 4, October 1999) features a summary of the stakeholder meeting held on
September 9, 1999.
Qualified Respondents in Category 1, Proven Diversion, were also invited to comment on the RFP evaluation methodology
prior to the development of the RFP for Diversion. Input from the Respondents was taken into account when formulating
the RFP document.
Site specific consultation will take place as facilities are identified for engagement of diversion facilities. Advertised
events, such as open houses, will be held at City owned locations where diversion facilities will operate in order to
familiarize interested members of the public with the diversion technologies, solicit feedback, and encourage public
involvement in diversion programs.
Other consultation activities planned for the diversion process include an information session on the RFP submissions
received and stakeholder consultation on diversion systems. Stakeholders will continue to be notified of opportunities for
public participation and updated on the TIRM Process through the project newsletters and postings on project information
on the web site.
Conclusions:
We are recommending that Council approve the issuance of the TIRM RFP for Proven Diversion Services, on or about
December 1, 1999, substantially in accordance with the RFP document attached to this report as Appendix "A". The RFP
for Diversion Services is scheduled to close on February 29, 2000. A list of top-qualified Proposals is then scheduled to be
recommended to Council in April 2000, with recommendations for contracting to come before Council in
August-September 2000, following the due diligence process and contract negotiations.
Contact Name:
Lawson Oates, B.A., M.E.S.
Manager, Strategic Planning
Solid Waste Management Services
Works and Emergency Services
Metro Hall, 19th Floor
Phone: 392-9744
Fax: 392-4754
E-mail: lawson_oates@toronto.ca
Angelos Bacopoulos Barry H. Gutteridge
General Manager Commissioner
Solid Waste Management Services Works and Emergency Services
LJO/ljo:md/rfp2.doc
Appendix A.
RFP for Proven Diversion Services
