March 15, 1999

To:Works and Utilities Committee

From:Barry H. Gutteridge

Commissioner, Works and Emergency Services

Subject:Solid Waste Management Marketplace Engagement Process

Greater Toronto Area Memorandum of Understanding

Purpose:

The purpose of this report is to present recommendations concerning the adoption of a Memorandum of Understanding regarding a potential shared "partnership" solution to secure solid waste disposal capacity for the City of Toronto and the Greater Toronto Area Regional Municipalities of Peel, York, and Durham.

Funding Sources, Financial Implications and Impact Statement:

There are no direct financial considerations arising from this report.

Recommendations:

It is recommended that:

(10Council authorize the entering into of the Memorandum of Understanding (attached as Appendix A to this report) setting out a protocol for the co-operation between the City of Toronto and the Regional Municipalities of Peel, York, and Durham leading to potential decisions for a shared solution or partnership in securing solid waste disposal capacity; and

(20Council receive the respective conditions related to participation (listed as Appendix B to this report) as adopted by the Regional Municipalities of Peel, York, and Durham, as per Clause No. 9 of the Memorandum of Understanding.

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).

Council also directed the Commissioner of Works and Emergency Services to facilitate the engagement of Regional governments in the Greater Toronto Area (the "GTA") as potential partners with Toronto for future disposal capacity contracts.

At that time, Council also adopted a report dated September 30, 1998 from the Commissioner of Works and Emergency Services which contained a recommendation to authorize the Commissioner to engage the GTA Regional Commissioners of Public Works "¼for the purposes of drafting a "Memorandum of Understanding" regarding the protocol for inter-regional solid waste disposal planning and decision-making, which upon completion will be submitted to his/her respective Councils for approval." (Recommendation No. 3 (ii)).

This report presents the proposed Memorandum of Understanding (the "MOU") developed by the GTA Public Works Commissioners and the respective conditions under which the Regional Municipalities of Peel, York, and Durham will participate.

Discussion and Justification:

Following Council direction to prepare a Memorandum of Understanding (the "MOU") regarding the protocol for inter-regional solid waste disposal planning and decision-making, the Commissioner of Works and Emergency Services and staff of Solid Waste Management Services began working through the GTA Commissioners' Round Table Forum on Solid Waste Management ("the Commissioners' Round Table Forum") to develop and submit to their respective Councils a workable MOU. The Commissioners' Round Table Forum has held regular meetings since March 1998, regarding solid waste management matters.

After several meetings, the Commissioners Round Table Forum arrived at a consensus regarding the wording of the MOU that is attached to this report as Appendix A.

Three Regional Councils have decided to participate under the MOU: Peel, York, and Durham. Each of these Regions have adopted enabling motions to join in the MOU and have submitted their solid waste tonnage projections for 2002 to 2022 to Toronto. These tonnage projections have been factored into the REOI, and will be refined prior to the issue of the RFP.

The Regional Council of Halton has decided not to participate through the MOU, but has passed a recommendation stating that Halton wishes to participate in the diversion component of SWM-MEP. Halton has approximately thirty-five years of disposal capacity at their regional landfill near Milton. The Commissioners' Round Table Forum is currently drafting a diversion oriented Terms of Reference to strengthen inter-regional co-operation and information sharing regarding solid waste diversion.

The MOU sets the terms and conditions of the protocol leading to the decision points in which there could be a shared solution ("partnership") by commitment of tonnages to a contract under which a potential multi-regional "partnership" could take place. The MOU states that:

-participation by GTA Regions is voluntary;

-planning principles will be followed to identify waste disposal quantities;

-members will share and review information during the process;

-negotiations are the sole responsibility of Toronto; and

-members can attach conditions related to their participation.

In addition, the MOU has been designed to provide two additional decision points on the part of Regions engaging with Toronto (Phase I is the initial decision to participate or not). In Phase 2, following the identification of top-qualified proponents, a Region is required to renew or not renew to continue participation with a view to a shared solution. This is to help provide clarity (tonnages, geographic catchment area, etc.) before negotiations begin. In Phase 3, at the conclusion of the negotiations, a Region can become a "partner" through the passage of a by-law to contract. The intent of these phases is to provide Regional Councils with the ability to manage the extent of their engagement in the interests of their particular Region.

The attached MOU has been listed as Draft 6 (b), to reflect the decision by Halton to not become a Member and to adjust the date of the document. Otherwise, it is the document considered by the Regional Councils of Peel, York, and Durham.

Clause No. 9 of the attached MOU provides Regions with the opportunity to add to the MOU additional conditions associated with their participation. Peel, York, and Durham have each put forward conditions related to their respective participation. (These are recorded at Appendix B attached to this report). As stated in Clause No. 9:

"¼these conditions do not bind other participating Members and are not assented to by their inclusion in this memorandum; they, however, may guide an individual Member's ultimate decision whether to "partner" with Toronto by the commitment of tonnage in any contract(s) resulting from the engagement process."

Some of the conditions reflect the identified need of the participating Regions to continue to conduct business-related contracts for solid waste management services (such as collection and short-term disposal requirements) with firms which Toronto may be engaged in negotiations with for disposal capacity. A protocol will be established at the Commissioner level to deal with these conditions.

York Region has identified that it will be engaged in a parallel planning process for new disposal capacity specific to its needs, but will not conduct negotiations while Toronto is in negotiations, should the proponents under consideration be the same in each process.

Each of the three participating Regions has set a condition, related to their continuing participation, that no new landfill site(s) be established in their respective Region.

Conclusions:

Following Council direction on October 2, 1998 to facilitate the engagement of Regional Governments in the GTA, the Commissioner of Works and Emergency Services engaged the Commissioners' Round Table Forum in the development of a MOU which would provide a protocol for decision-making leading to a potential partnership for future disposal capacity contracts involving Toronto and the Regional Municipalities of the GTA.

The Regional Municipalities of Peel, York, and Durham, have agreed to participate with Toronto through the MOU. Each of these Regions has included, with their agreement to participate conditions which are not binding on other parties, but which guide their respective decision-making for any ultimate commitment to contract.

The Regional Municipality of Halton has decided not to participate through the MOU but has identified a willingness to participate in the diversion component of Toronto's Solid Waste Management Marketplace Engagement Process.

We recommend the adoption of the attached MOU and the receipt of the attached conditions put forward by the three participating Regional Municipalities.

Contact Name:

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

Angelos Bacopoulos, P.Eng. Barry H. Gutteridge

General ManagerCommissioner

Solid Waste Management Services Works and Emergency Services

att.

LJO/ljo:md/gtamou

Appendix A

Memorandum of Understanding

Regarding a Potential Greater Toronto Area Partnership to Secure Long-term

Solid Waste Disposal Capacity

DRAFT #6(b)

February 12, 1999

Introduction

On October 2, 1998, Toronto City Council moved to formally invite the Regional Governments of the Greater Toronto Area (Durham, York, Peel, and Halton) to enter into a potential partnership with Toronto in its proposal call for long-term solid waste disposal capacity by:

(i)declaring through Council motion an "Expression of Interest"; and

(ii)requesting their Commissioners of Public Works (or designates) to meet with Toronto's Commissioner of Works and Emergency Services for the purposes of drafting a "Memorandum of Understanding" [hereinafter referred to as the "MOU"] regarding the protocol for inter-regional solid waste disposal planning and decision-making, which, upon completion, will be submitted to his/her respective Councils for approval.

Toronto City Council also initiated at that time the Solid Waste Management Marketplace Engagement Process ("SWM-MEP") which is designed to provide new disposal capacity prior to the projected 2002 closure date of Toronto's remaining in-service landfill, the Keele Valley Landfill Site. This landfill site currently provides disposal capacity for Toronto, York, and Durham, in addition to servicing the needs of a portion of the private sector's waste disposal needs.

Listed below is a Statement of Principles for Participation that contains the protocol involved in and the conditions of participation leading to the potential partnership arrangement.

Statement of Principles for Participation

The undersigned members of the Greater Toronto Area (the "Members") agree to collaborate in the engagement of the marketplace to supply long-term solid waste disposal capacity (the "engagement process") based on the following conditions of participation:

1.Participation shall be voluntary on the part of all Members and any Member may withdraw from the engagement process at any time subject to clause 7 of this MOU.

2.In order to identify waste quantities required for disposal, Members will follow acceptable solid waste management planning principles including the identification of waste diversion targets, a public consultation process, and the preparation of study or planning documents.

3.Toronto will manage the engagement of the marketplace through the preparation and issuance of a Request for Expressions of Interest (the "REOI") and a Request for Proposals (the "RFP"), which incorporate, in addition to the base waste diversion and disposal quantities for which Toronto is responsible, the waste diversion and disposal quantities resulting from the planning undertaken by Members in clause 2. Information, in the form of submissions, at the REOI and RFP stages will be shared by Toronto and the Members through their respective Commissioners of Public Works. Toronto will be solely responsible for negotiations. Toronto's Commissioner will consult with his counterparts prior to any major decisions either advancing the evaluation process or any negotiations. Toronto will address any input by Members. Any sharing and review of documents or of information received during the evaluation process or in any negotiations may be subject to conditions requiring confidentiality by Member staff and councillors.

4.It is acknowledged that Toronto shall be solely responsible for any obligations to proponents in the engagement process subject to any subsequent contractual commitments of Members under clause 7 of this MOU.

5.The Members' Commissioners of Public Works will review the draft REOI and RFP evaluation criteria prior to issuance of the documents. It is acknowledged that any input may be subject to timelines for such input adopted by Toronto Council.

6.All Members will provide to Toronto their best estimate of their long-term disposal needs based on the planning undertaken under clause 2 of this MOU prior to the issue of the REOI, and the then most current disposal capacity requirements prior to the issuance of the RFP.

7.Members will be kept informed of developments in the engagement process by periodic reports from Toronto's Commissioner to the Members' respective Commissioners. Members will be advised by advance notice of two months of the decision point prior to Toronto executing a contract(s) with a successful proponent or proponents. Members must decide at this point whether or not to "partner" with Toronto by passage of an appropriate by-law to contract for the relevant tonnages in the contract(s) with the successful proponent(s) or with Toronto, as the case may be.

8.Each Member shall, following the identification of the top qualified proposals (i.e. the outcome from the RFP submissions evaluation) and prior to Toronto engaging the top qualified proposals in contract agreement negotiations, decide to renew (or not to renew) their commitment to a GTA shared solution (i.e., by commitment of tonnage). A decision to renew shall be made by adoption of a resolution to that effect and within a timeframe consistent with the project schedule as adopted by Toronto Council. Members who decide to renew shall not conduct separate negotiations with the top qualified proponents from after the point that members are notified that Toronto City Council has authorized negotiations with those proponents and up to execution of contract(s).

9.The attached appendices contain conditions or principles adopted by individual Members which currently address specific interests or concerns associated with those Members' participation. These conditions or principles do not bind other participating Members and are not assented to by their inclusion in this memorandum; they, however, may guide an individual Member's ultimate decision whether to "partner" with Toronto by the commitment of tonnage in any contract(s) resulting from the engagement process. It is acknowledged that such expressed conditions or principles shall not be deemed to be specific conditions or criteria to be addressed in Toronto's REOI or RFP, but may be factors to be evaluated under the general criteria contained in the proposal process as described to date in the planning documents.

Dated February 12, 1999

For the Regional Municipality of Durham For the Regional Municipality of York

For the City of Toronto For the Regional Municipality of Peel

LJO/ljo:md/jea98

Appendix B

Conditions Passed by the Regional Municipalities of Peel, York, and Durham, Under Clause No. 9 of the "Memorandum of Understanding Regarding a Potential Greater Toronto Area Partnership to Secure Long-term Solid Waste Disposal Capacity"

Regional Municipality of Peel. March 3, 1999.

"That the Regional Municipality of Peel enter into a Memorandum of Understanding (MOU) with the City of Toronto, regarding a potential Greater Toronto Area partnership to secure long-term waste disposal capacity;

"And further, that the Memorandum include the following conditions specific to the Region of Peel:

a)that no new landfill site(s) be established in the Region of Peel;

b)that existing landfill capacity in the Region of Peel not be utilized for the City of Toronto's landfill needs;

c)that the Region of Peel may conduct separate negotiations with any service provider for short term Regional waste management services, while the City of Toronto is negotiating with qualified proponents for long-term waste management services;

d)notwithstanding Clause 7 of Draft # 6 of the Memorandum of Understanding which states that, "Members will be advised by advance notice of two months of the decision point prior to Toronto executing a contract(s), with a successful proponent or proponents," Peel Regional Council will through its member, review any decision point and report back to the City as to, "whether or not to partner with Toronto by passage of an appropriate by-law to contract for the relevant tonnages."

And further, that a copy of the report and the corresponding resolution be forwarded to the City of Toronto, to be appended to the Memorandum of Understanding, as per Clause 9 of the MOU.

Regional Municipality of York. January 28, 1999.

1."That the Regional Chair and Regional Clerk be authorized to execute a Memorandum of Understanding with the City of Toronto regarding a potential Greater Toronto Area partnership to secure long-term solid waste disposal capacity, in a form similar to that shown as Attachment 1, and as outlined in this report, subject to the particular concerns pertaining to York Region as noted in the text of this report being adequately addressed."

2."That Regional Council endorse the Region's preliminary diversion rates and corresponding disposal quantities for incorporation into the City of Toronto's Request for Expressions of Interest document, as outlined in this report."

[Conditions.]

1."That there be no new landfill capacity established in York Region."

2."That the Region continue to give priority to waste diversion over waste disposal in structuring the Region's waste management system; and, that contracts for the disposal of the Region's waste be structured to reflect both the ongoing and intended future target performance of the Region's waste diversion program."

3."That export of the Region's waste to disposal facilities outside the Region be considered; and, that that process of consideration incorporate an awareness of the host community's positions on the waste disposal facilities proposed to receive the Region's waste."

4."That export of the Region's waste to facilities in the United States (U.S.) be considered in addition to facilities located in Ontario, but that in comparatively evaluating the U.S. facilities to Ontario facilities, priority be given to facilities which benefit Ontario in terms of jobs and economic investment; the degree of priority assigned should be developed through further public consultation."

5."That waste incineration with energy recovery (EFW) be considered as a waste disposal technology in addition to landfill; and, that any specific proposals for EFW be comparatively evaluated with landfill proposals, utilizing criteria which address macro environmental impacts (including health and safety, natural environment, energy resource management) as well as the matter of Ontario benefits and financial cost."

6."That proposals involving EFW facilities located in the Region be considered and comparatively evaluated in the manner described immediately above; and that the process of consideration involve detailed consultation with the host area municipality and immediate community with the objective of establishing the elements of a "community-facility performance agreement" addressing matters including but not limited to: environmental performance, performance monitoring and reporting, and non-performance penalty and compensation."

7."That proposals involving waste from York Region and other GTA Regions and Toronto transferring through transfer facilities in York Region for disposal at facilities outside the Region, be considered; and that such consideration place significant priority upon measures to ensure that potential land use and transportation impacts are fully mitigated."

8."That proposals to manage the Region's waste disposal tonnages be permitted to include tonnages from the ( [sic] industrial, commercial and institutional sector, provided that the Region's waste disposal capacity needs have priority."

9."That the Region entertain offers from the waste disposal marketplace which could involve the Region as a partner in the form of the Region having an equity interest in facilities."

10."That the Region should continue with the "dual track" approach to long term solid waste disposal planning, namely involving: the Region continuing to participate with Toronto and other GTA regional municipalities in consultations directed at establishing a framework for the participating GTA municipalities identifying a shared solution for their long term waste disposal capacity needs; that subject to a satisfactory framework being identified and manifest in a Memorandum of Understanding, the Region provide the City of Toronto with ranges of waste disposal tonnage needs which quantity would be integrated into Toronto's waste disposal marketplace request for expressions of interest and detailed proposal call; and that, in parallel to the Region participating in the GTA/Toronto process, the Region initiate a process of canvassing the waste disposal marketplace for proposals to address the waste disposal capacity needs of the Region only."

[In addition, in the body of the report before York Regional Council, the following appendices were listed and adopted for inclusion as additional conditions:]

"Condition No. 8 of this MOU is interpreted to not prohibit York Region from engaging the marketplace through issuance of requests for proposals and negotiating with any proponents submitting proposals pertaining to provision of solid waste disposal capacity for York Region's disposal quantities. Pursuant to the latter portion of Condition No. 8, if York Region renews its commitment to the GTA shared solution approach, York Region will not negotiate with the top qualified proponents during the period Toronto is negotiating with these proponents."

"York Region has the right under this MOU to carry out its own Request for Proposals for a York only disposal solution and to conduct any negotiations with any proponents in the time periods before and after the City of Toronto is negotiating with its top qualified proponents. Furthermore, if York's top qualified proponents are different than Toronto's top qualified proponents, then York has the right under this MOU to conduct its negotiations at the same time as Toronto is conducting negotiations."

Regional Municipality of Durham. January 19, 1999

"That the Region of Durham enter into a Memorandum of Understanding regarding a potential Greater Toronto Area partnership to secure long term waste disposal capacity and that the Memorandum include the following conditions specific to the Region of Durham:"

1.That no new landfill site(s) be established in the Region of Durham;

2.That Energy from Waste or Refuse Derived Fuel facilities be considered;

3.That new emerging waste disposal technologies be considered;

4.That the Region may conduct separate negotiations with any service provider for short term Regional waste disposal services while Toronto is negotiating with top qualified proponents for long term waste disposal services."