March 15, 1999

To:Works and Utilities Committee

From:Barry H. Gutteridge

Commissioner, Works and Emergency Services

Subject:Solid Waste Management Marketplace Engagement Process

Results of Consultation Program

Purpose:

This report provides an account of the consultation activities regarding the Solid Waste Management Marketplace Engagement Process ("SWM-MEP") conducted from December 1998 to March 1999 following the public issue of the SWM-MEP Stage One (Draft) Planning Document, dated November 23, 1998 (the "Planning Document").

A comprehensive summary of the consultation feedback and input received during the course of the consultation regarding the Planning Document, including responses, is set out in Appendix "A" attached to this report.

Funding Sources, Financial Implications and Impact Statement:

There are no direct financial considerations arising from this report.

Recommendations:

It is recommended that this report be received for information.

Reference/Background/History:

On October 2, 1998, City Council provided direction to the Commissioner of Works and Emergency Services to:

"¼immediately 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).

At that time, Council also adopted a report dated September 30, 1998 from the Commissioner of Works and Emergency Services which contained a series of motions related to: the establishment of a project budget; retainment of a project consultant and external legal assistance; reporting out procedures for the two-stage proposal call process consisting of a Request for Expressions of Interest ("REOI") and a Request for Proposals ("RFP"); and, an associated project schedule containing consultation activities.

This report focuses on the consultation activities regarding the public, environmental organizations, industry, and government review of the project's Planning Document. Other related reports also listed on this agenda address:

-a potential co-operative approach to solid waste management among Greater Toronto Area regional jurisdictions;

-the introduction of a prohibition against lobbying; and

-a request for authorization to issue the SWM-MEP REOI.

The report regarding the request for authorization to issue the REOI contains recommendations related to the establishment of Council policy and direction regarding certain proposed refinements to the marketplace engagement process that have been focal points during the course of our recent consultation process. These items are identified in the next section of this report.

A copy of the Planning Document was provided to members of Works and Utilities Committee through a report listed on the Supplementary Agenda of the Committee's December 2, 1998 meeting.

Discussion and Justification:

A comprehensive stakeholder consultation program was held after the release of the SWM-MEP Stage One (Draft) Planning Document (November 23, 1998). The principle goal of the consultation effort was:

"¼to provide for an open, accessible, traceable, and flexible means of information exchange between the City of Toronto project team and all interested stakeholders."

The consultation involved six meetings, held at Metro Hall, two newsletters, development of a web page on the City site, invitation of comments through letters, e-mails, faxes, and telephone conversations. A copy of all written correspondence received has been filed with the Clerk's Office and is available to Councillors for review.

Meetings

The following meetings were held:

-December 17, 1998 (Industry)

-January 5, 1999 (Government Ministries and Agencies)

-January 7, 1999 (Industry)

-January 9, 1999 (General Public and Interest Groups)

-February 25, 1999 (All Stakeholders)

-March 1, 1999 (All Stakeholders)

It should be noted that all meetings were open to all stakeholders. Meetings were held at various times throughout the day to accommodate schedules of different target groups. The target groups listed above which are shown in brackets denote the main body of participants who attended a particular meeting.

The meetings in December and January focused on information contained in the Planning Document. The meetings held in February and March focused on the following additional planning components introduced by the project team:

Hauling

In order to receive competitive proposals on both the disposal and haulage components of a disposal contract(s) we propose to issue a subsequent call for the haulage component. The haulage tender would be issued to third party haulers, in order to compare with those proposed in integrated proposal responses. The integrated proposal call would require pricing for a separate haulage component. We are also developing a role for City of Toronto public sector employees in the haulage component of the project, based on existing levels of staff and equipment involved in the haulage of waste from Toronto's transfer stations to the Keele Valley Landfill site.

Quantities and Contract Timeframes

Linked to the haulage component of the project is a need for disposal respondents to identify at the REOI stage not only their facility location, but also the quantities of waste they intend to dispose of and the interest of proponents in the various contractual timeframes proposed by Toronto.

Preferred Customer

Given the quantities of waste that Toronto may be contracting for, it is reasonable for the City to expect pricing to remain competitive over the contract timeframe offered (i.e. up to 20 years). It is therefore proposed that the RFP will include a requirement that the price for disposal in any contract be guaranteed to be that respondent's best price. If a lower price were offered to another customer during the term of the contract, Toronto would be given a price reduction to match the lower price. In this manner Toronto will have "preferred customer" status.

Contracting for IC&I Waste Only

A number of potential marketplace respondents have disposal facilities that are certified to only receive solid waste from the Industrial, Commercial, and Institutional ("IC&I") sectors. We have proposed that this component of the marketplace be invited to submit proposals to dispose of the solid waste that the City receives from the IC&I sector at our transfer stations. This approach would expand the potential marketplace response.

Detailed notes were kept of all meetings in order to record the issues and concerns raised. These concerns, along with those forwarded through letters and telephone conversations have been combined into an issues-response matrix (please see attached Appendix "A"). This format will allow stakeholders to trace the impact their comments have had on this planning process, in addition to recommendations and information contained in accompanying reports regarding SWM-MEP.

Key Stakeholder Issues

A brief synopsis of key issues raised by stakeholders follows. It should be noted that very rarely was there consensus among stakeholders on issues. Largely, this can be attributed to the competing interests that were represented at consultation meetings.

Complexity

Stakeholders identified this process as a very complex one. Questions were raised about the feasibility of submitting and comparing short-term 5-year versus long-term proposals (up to 20 years). The necessity for a clear set of rules and criteria under which proposals would be evaluated was underscored.

Diversion

Members of the waste management industry questioned the legitimacy of the waste disposal projections presented in the planning document. It was felt that the projected diversion targets are not based on experiences of other municipalities and that any shortfalls in diversion could lead to uncertainty in the disposal contracting process.

Conversely, members of the environmental community felt that the diversion component did not hold a strong enough place in this process. There was some sentiment that the City should move quickly towards an 80 percent diversion rate and that capital funds should be secured to conduct a parallel or prior diversion planning and implementation process.

Third Party Haulage

Some representatives of the waste management industry felt that a competitive process for the haulage component of the project was unacceptable due to unique system proposals that would not be conducive to the inclusion of third party haulers or municipal employees engaged in hauling. One representative pointed out that this was, in his opinion, an unnecessary duplication of effort by the City, as his selection of a hauler would be done through a competitive process. In addition, it was pointed out that there might be legal issues related to third party haulers entering some facilities.

However, participating members of the haulage industry and some representatives of environmental groups felt that the de-linking of haulage from the disposal component would be very appropriate and would encourage the most competitive price. It should be noted that an environmental analysis was requested of any haulage proposals.

Preferred Customer Clause

The majority of industry stakeholders felt that this clause was not appropriate and that the marketplace should be able to put forward its most competitive proposals without future adjustment. In addition, industry participants raised concerns about agreements with host municipalities and existing contracts.

It should be noted that in each consultation meeting project team members raised the concept of revenue sharing as a partnership option to addressing the objective behind preferred customer pricing. In general, industry stakeholders reacted negatively to the option; citing that, as with preferred customer, it was too prescriptive.

Next Steps

To facilitate an open and traceable process, stakeholders will have access to consultation meeting summary reports, reports to Works and Utilities Committee, newsletters, and the attached issue/response table. These documents will be available in both hard copy and in electronic format from the City's web site. Stakeholders are being notified of staff reports going forward to Works and Utilities Committee and the opportunity to make a deputation.

The next scheduled consultation point in the SWM-MEP process is the review of RFP evaluation criteria following the release of proposals qualifying at the REOI stage. Newsletters will continue to be circulated at key points throughout the process.

Conclusions:

This report has provided a summary of the SWM-MEP consultation process regarding the Planning Document and additional planning components introduced by the project team. An issue/response matrix has been prepared in order for stakeholders to see the impact of their contributions. This matrix is attached to this report (please see Appendix "A"). The contributions from members of industry, representatives of environmental groups, government officials, and members of the general public have helped to develop and refine the SWM-MEP project.

Contact Names:

Lawson Oates, B.A., M.E.S.

Manager, Strategic Planning

Solid Waste Management Services

Works and Emergency Services

Phone: (416) 392-9744

FAX: (416) 392-4745

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

Tracey Ehl Harrison, MCIP, RPP

Public Consultation Co-ordinator

Technical Support Services

Works and Emergency Services

Phone: (416) 392-6698

Toll Free: 1-800-465-4056

FAX: (416) 392-2974

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

Angelos Bacopoulos, P.Eng. Barry H. Gutteridge

General Manager Commissioner

Solid Waste Management ServicesWorks and Emergency Services

LJO/TEH/ljo:md/smc.doc

Appendix A.

SOLID WASTE MANAGEMENT MARKETPLACE ENGAGEMENT PROGRAM

("SWM-MEP")

STAGE ONE (DRAFT) Planning Document

Consultation Feedback

Stakeholder Issues/Comments List

Up to March 5, 1999

Works & Emergency Services