March 15, 1999
To:Works and Utilities Committee
From:Barry H. Gutteridge
Commissioner, Works and Emergency Services
Subject:Solid Waste Management Marketplace Engagement Process
Request for Expressions of Interest
Purpose:
The purpose of this report is to seek Council authority to issue the Solid Waste Management
Marketplace Engagement Process ("SWM-MEP") Request for Expressions of Interest and to
seek Council's direction regarding several key policy matters that have arisen during the
course of the SWM-MEP consultation process. An associated authority is requested to adjust
our consultant's workplan and budget to carry out the associated work tasks.
Funding Sources, Financial Implications and Impact Statement:
On October 2, 1998 City Council approved a project budget in the amount of $1,142,500.00,
for the SWM-MEP project, which entails a Request for Expressions of Interest and a Request
for Proposals for new disposal capacity and, at this time, a Request for Expressions of Interest
for diversion capacity and new and emerging technologies (Capital Account No. C-SW168,
Waste Management Planning). The budget for the project's consultant, Proctor & Redfern
Limited, was set at $722,500.00, including a contingency allowance of $200,000.00, including
GST, to fund additional work, if necessary. Through a motion adopted by Council on
November 25, 26, and 27, 1998, $82,500.00 was re-assigned from the contingency allowance
to Proctor & Redfern's main budget in order to enable them to modify the project's Request
for Expressions of Interest to include requests for diversion proposals and new and emerging
technology proposals.
Through this report we are seeking a similar re-assignment of funds from the consultant's
contingency allowance to their main budget, in the amount of $95,395.85, inclusive of GST.
Consequently, there are no new financial approvals associated with this report.
Recommendations:
It is recommended that:
- Council endorse provisions contained in the Solid Waste Management Marketplace
Engagement Process Request for Expressions of Interest regarding the inclusion of:
(i) options for 5, 10, 15, and 20-year timeframes for provision of disposal capacity (or an
amount beyond five years which is not a multiple of 5);
(ii) the right of Toronto to engage in a subsequent tender for the haulage component from our
transfer stations by third party haulers in order to broaden the potential marketplace response
for the transport component;
(iii) the right of Toronto to maintain a role for its public sector employees in the haulage
component of the project, based on the existing levels of staff and equipment involved in the
haulage of waste from Toronto's transfer stations to the Keele Valley Landfill site;
(iv) a preferred customer clause to ensure that the disposal price(s) charged to Toronto remain
competitive over the contract timeframe; and
(iv) disposal facilities that are certified to receive only solid waste from the Industrial,
Commercial, and Institutional sectors in order to broaden the potential marketplace response
for the City's disposal needs.
And, subject to the approval of Recommendation No. (1), it is further recommended that:
(2) the attached Solid Waste Management Marketplace Engagement Process Request for
Expressions of Interest be approved for issuance on April 26, 1999; and
(3)the workplan for Proctor & Redfern Limited., be amended to include the following
work tasks:
(i)development of a separate haul tender process to be incorporated into the contracting out
methodology and development of a protocol to utilize Toronto public sector employees in the
haulage component;
(ii)project management of the preferred customer clause in the Request for Expressions of
Interest and Request for Proposals;
(iii)project management related tasks regarding the inclusion of waste disposal sites certified
to accept only waste originating from the Industrial, Commercial, and Institutional sectors;
and
(iv)the approved budget for Proctor & Redfern Limited be adjusted by the addition of
$95,395.85, inclusive of GST, to fund the additional workplan items listed in
Recommendation No. 3 (i, ii, iii), with funds to be drawn from the contingency allowance
previously approved by Council on October 2, 1998.
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, 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 a 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.
For communication and planning purposes this new project has been named the Solid Waste
Management Marketplace Engagement Process ("SWM-MEP").
Council also adopted on October 2, 1998 recommendations contained in a report from the
Commissioner of Works and Emergency Services (dated September 30, 1998) to retain
Proctor & Redfern Limited as the project consultant and to retain the legal firm of Tory Tory
DesLauriers & Binnington to provide external legal expertise. As the project consultant,
Proctor & Redfern's role is to assist staff in the proposal call process, including the
preparation and issuance of the Request for Expressions of Interest (the "REOI") and the
Request for Proposals (the "RFP"), analysis of responses, due diligence, and report
preparation.
Through this report we are seeking Council authority to issue the SWM-MEP REOI and
Council's direction regarding several key policy matters that have arisen during the course of
the SWM-MEP consultation process. Authority is also requested to adjust our consultant's
workplan and budget to carry out the associated work tasks.
Other related reports also listed on this agenda address:
-the SWM-MEP consultation program;
-a potential co-operative approach to solid waste management among Greater Toronto Area
regional jurisdictions; and
-the introduction of a prohibition against lobbying (an "anti-lobbying clause").
Discussion and Justification
During the course of the SWM-MEP consultation process during the months of December
1998 through March 1999, several additional planning components were introduced by the
planning team. A summary of these additional items is listed below. A more comprehensive
review of these items, including stakeholder feedback is contained in a report also listed on
this agenda (please see "SWM-MEP - Results of Consultation Program").
Optional Timeframes for Disposal Capacity Proposals
In order to attain a broad range of options arising from the engagement of the marketplace we
have included in the REOI the ability for proponents to offer contracts of varying lengths.
Proponents can offer contracts for 5, 10, 15, or 20 years (or an amount beyond five years that
is not a multiple of 5). The resulting potential to contract with more than one proponent for
different contract timeframes may provide the City with flexibility as it proceeds to meet its
post-Keele Valley Landfill site disposal needs. The flexibility that may result can also provide
opportunities to further advance diversion by directing waste at the end of a 5-year disposal
contract to a diversion facility(ies), such as a Materials Recovery Facility.
Right to Engage in a Tender for Haulage
In order to receive competitive proposals on both the disposal and haulage components of a
disposal contract(s) we propose to issue a subsequent tender for the haulage component. The
haulage tender would be issued to third party haulers, in order to compare such haulage prices
with those proposed in the integrated proposal responses. The integrated proposal calls will
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 proponents 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.
Establishment of a Preferred Customer Clause
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.
Certain exceptions will be considered, for example, small quantities exceptions or wastes
under current agreements.
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.
REOI
Attached to this report, as Appendix "A" is the REOI document. It is comprised of three main
components:
-preliminary tonnage base and ranges for the contracting-out options (e.g. Toronto alone
and Toronto with other GTA Regions);
-details of the information requirements, including: project and optional partnership offers
general description, site location, commercial details, and service delivery timeframes;
-capability and financial mandatory (pass-fail) criteria that respondents must meet to be
qualified to pass to the RFP stage. The primary purpose of these criteria is to ensure that
respondents are suitable business partners in that they have the necessary experience, stability
and financial strength to meet the City's waste management needs.
As per Council's direction provided on October 2, 1998, the REOI seeks proposals in three
waste management categories:
-Proven Waste Diversion Capacity
Proven waste diversion technologies are those with an ability to manage mixed waste or
mixed waste and source-separated waste, utilizing mechanical and/or biological processes.
-Proven Waste Disposal Capacity
Proven waste disposal technologies must have an ability to manage mixed waste, utilizing
landfill and/or energy recovery processes.
-New, Emerging, Innovative, and Demonstration Technologies.
Technologies that have been proven at the pilot scale, but have not yet been applied for larger
waste volumes are referred to as new, emerging, innovative, and demonstration technologies.
Respondents to the REOI will not be able to submit any price information, including price
information as may relate to Toronto partnership offers. Respondents who qualify at the REOI
stage will be asked at the RFP stage to submit price information and information related to
evaluation criteria. At the REOI stage, proponents will submit two envelopes. The first
envelope will contain the information pertinent to the qualifications criteria. If a respondent
successfully qualifies, passes the second envelope containing the site location is then opened
and will subsequently be made public. If a respondent is not successful at the mandatory
qualifications criteria stage, then their second envelope will not be opened.
Conclusions:
We recommend that Council approve the attached REOI for diversion, new and emerging, and
disposal capacity. It is important for the City to proceed as the Keele Valley Landfill site has a
projected closure date of 2002.
In conjunction with the approval of the REOI for public release on April 26, 1999, we are
seeking Council direction regarding:
-a request for expressions of interest for disposal capacity in 5, 10, 15, and 20-year
timeframes in order to broaden the potential marketplace response;
-the right to engage third parties subsequently in a separate tender call for haulage;
-the right to maintain a role for City of Toronto public sector employees in the haulage
component of the project;
-the inclusion of a preferred customer clause; and
-the inclusion of a request for disposal facilities that are certified to only receive solid waste
from the IC&I sector.
We are also recommending adjustments in our consultants approved workplan and budget, to
assist in the facilitation of the items listed above.
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.
