April 9, 1999
To:Works and Utilities Committee
From:Barry H. Gutteridge
Commissioner, Works and Emergency Services
Subject:City of Toronto's Integrated Solid Waste Resource Management Process
Request for Expressions of Interest
Supplementary Report
Purpose:
The purpose of this report is to respond to the requests for additional information by Works
and Utilities Committee on March 24, 1999, regarding the March 15, 1999 report from the
Commissioner of Works and Emergency Services titled "Solid Waste Management
Marketplace Engagement Process - Request for Expressions of Interest."
Funding Sources, Financial Implications and Impact Statement:
There are no direct financial considerations arising from this report.
Recommendations:
It is recommended that:
1) the Commissioner of Works and Emergency Services be authorized to prepare a planning
process regarding the establishment of a Request for Proposals for "proven diversion" and
"new and emerging technologies", which will be submitted for approval and subsequent
issuance following the reporting out of the results of the Request for Expressions of Interest
for "proven diversion", "disposal capacity", and "new and emerging technologies";
2) the recommendations contained in the March 15, 1999 report from the Commissioner of
Works and Emergency Services regarding the issuance of the Request for Expressions of
Interest be adopted;
3) the amended Request for Expressions of Interest document for "proven diversion",
"disposal capacity" and "new and emerging technologies", which is attached to this report at
Appendix "D", be adopted and approved for issuance on April 26, 1999; and
4) the remaining balance of this report be adopted for information.
Council Reference/Background/History:
On March 24, 1999 Works and Utilities Committee deferred consideration of a report dated
March 15, 1999, from the Commissioner of Works and Emergency Services, regarding the
issuance of a Request for Expressions of Interest for disposal and diversion capacity, until a
further meeting of the Committee, if possible to a special meeting of the Committee to be
convened at the call of the Chair prior to the next meeting of Council scheduled to be held on
April 13, 1999, to resolve outstanding issues. This decision was recorded as the first of seven
motions passed by the Committee in regards to the March 15, 1999 report from the
Commissioner of Works and Emergency Services.
Listed below are the additional six 6 motions passed by the Committee and our responses.
Discussion and Justification:
Motion No. 2
"The Works and Utilities Committee adopted the following recommendations and tabled such
recommendations until the report is again considered by the Committee:"
(i) "that all terminology be changed be adding the word "resource" after the words "solid
waste" wherever they appear in the City's waste resource management process; and further
that the title to be used to describe the entire process be: "Integrated Solid Waste Resource
Management Process";
Response:
We will add the word "resource" after the words "solid waste" in all subsequent project
documents and title the project "Integrated Solid Waste Resource Management Process". We
propose that the acronym "TIRM" be used as an abbreviation of the title, standing for Toronto
Integrated Resource Management.
Motion No. 2 (ii):
"that the overall objective of the process adopt the following mission statement:"
"The City of Toronto's Integrated Solid Waste Resource Management Process be designed to
be flexible enough to incorporate new, environmentally sustainable technologies that will
move the City towards its ultimate goal of "Zero Waste", that is, a strategy based on
maximizing;"
Response:
We will incorporate this mission statement in subsequent project documents and
communications.
Motion No. 2 (iii):
"that in order to enhance the potential for diversion from disposal, the maximum limits on the
size of proposals in the "proven diversion capacity" (currently limited to 250,000 tonnes) and
the "new and emerging technologies" (currently limited to 100,000 tonnes/year) be increased;
and that the Commissioner of Works and Emergency Services be requested to submit a further
report with options for alternative limits or no limits, with the corresponding wording for
amendments which would give effect to these options;"
Response:
We would like to clarify that the proposed limits on the size of diversion projects are for
individual projects, and are not necessarily the limit in the "proven diversion capacity"
category and "new and emerging technologies" category.
In response to the Committee's request, we have adjusted the Request for Expressions of
Interest "proven diversion" category to a maximum of 300,000 tonnes per annum. We believe
this will provide the diversion component of the marketplace with sufficient quantities to
achieve economies of scale, and set an appropriate maximum quantity level for successful
diversion technologies now in commercial operation. A successful respondent contracting for
the management of 300,000 tonnes per annum will therefore be managing one-third of our
residential solid waste resource currently being disposed.
In regards to the new and emerging technologies category, we recommend that a maximum
limit of 100,000 tonnes per annum be maintained, given that the technologies in this category
by definition have not yet achieved a commercial operating track record at this tonnage level.
Once a respondent has demonstrated a successful track record and is in a position to manage
greater quantities additional tonnages can be diverted from disposal to the diversion category.
Motion No. 3
"The Works and Utilities Committee requested that City Councillors attending the Federation
of Canadian Municipalities who are members of the Works and Utilities Committee (and
others if possible) report back to the Committee on their investigations of the City of Halifax
program which is achieving high levels of diversion through separate collection of
compostable waste resources; that City staff investigate this system with Halifax staff and
prepare a full report for special presentation to the Works and Utilities Committee meeting on
Wednesday, June 16, 1999, and that team of appropriate Halifax officials (including an
elected official) be invited to participate, as guests of the City, at the June 16th Works and
Utilities Committee meeting to describe their experiences; and that funds for the delegation's
expenses be provided from [the appropriate budgets];"
Response:
We will submit a staff report and presentation regarding the City of Halifax's diversion
program to the June 16, 1999 meeting of Works and Utilities Committee. We will also assist
with the invitations to Halifax officials to attend the June 16, 1999 meeting to describe their
particular experience.
Motion No. 4
"The Works and Utilities Committee requested the Commissioner of Works and Emergency
Services to revise the Request for Proposals to ensure that there is an opportunity for the
private sector to provide the City with Expressions of Interest based on fluctuating tonnage or
number of years and openings at which point the City can reduce its minimum tonnage;"
Response:
We have introduced a third response table in the REOI (Form 3.3), which is provided to invite
respondents to express interest in managing diminishing tonnages over time and other
innovative options they may wish to present. In the event that a contract of this nature was
awarded it would provide "openings" at which point the City could reduce its disposal
tonnages.
Motion No. 5
"The Works and Utilities Committee requested that when this matter is again considered by
the Works and Utilities Committee, the process and the staff process that is involved be tabled
as part of these recommendations;"
Response:
We have attached to this report the strategic project schedule approved by Council on October
2, 1998, and an account of the consultant selection process (please see attached Appendix "A"
(i)). The schedule identifies the key project decision points. A refined schedule has been
provided within the text of the REOI, which is attached to this report for approval. The refined
schedule has also been attached at Appendix "A" (ii) for reference purposes. The schedule has
been modified in large part due to Council's direction on October 2, 1998 to engage diversion
proposals from the marketplace in addition to disposal proposals. We have also attached at
Appendix "A" (ii) a list of the current project team members. This is subject to change as
additional or alternate staff are assigned to the project during the proposal evaluation stage.
In regards to process, the TIRM project is based on the Council direction of October 2, 1998.
At that time 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 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).
Accordingly, we have worked with Committee and Council and external stakeholders to
develop a planning process which is based on sound environmental assessment planning
principles and will accordingly result in an outcome that is objectively based on the
application of set evaluation criteria.
In addition, Council provided direction on a comprehensive range of policy and operational
matters, which is 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 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.
Additional information concerning the development process for the REOI and RFP is
contained in the Stage One (Draft) Planning Document that was tabled with the Works and
Utilities Committee at its meeting of December 2, 1998, and the subsequent report on the
public consultation process from the Commissioner of Works and Emergency Services, dated
March 15, 1999.
Motion No. 6
"The Works and Utilities Committee requested the Commissioner of Works and Emergency
Services to submit a report to the Committee on the following proposals and requests for
information including any recommendations which flow therefrom:"
(a) "that the Commissioner of Works and Emergency Services develop an evaluation system
for the Request for Expressions of Interest to include a complete list of criteria and
recommended weighting of the criteria in the evaluation process be for approval by the Works
and Utilities Committee and City Council;"
Response:
The REOI is the first step in the two-step marketplace engagement process, and is followed by
the Request for Proposals (the "RFP"). The REOI is designed to qualify respondents who are
then invited to respond to the RFP.
Accordingly, the REOI presents a number of commercial and financial pass-fail criteria, and
in the case of the disposal category, a requirement that the site or sites be identified at the
REOI phase. Respondents that do not meet the commercial and financial criteria are therefore
not put through the rigors of the RFP process unnecessarily.
The draft RFP evaluation criteria, has been in development since 1997 and has been the focus
of comprehensive stakeholder consultation. It was once again presented for stakeholder
review and comment through the consultation on the project's Stage One (Draft) Planning
Document, November 23, 1998, which was tabled with Works and Utilities Committee at its
meeting of December 2, 1998. (A copy is attached at Appendix "B" for reference purposes.
The evaluation criteria is comprised within three categories:
i) macro-environmental impacts;
ii) Ontario-based benefits; and
ii) financial impacts.
The current weighting for these categories is 35, 30, and 35 percent, respectively. Following
identification of the qualified REOI respondents, we will be placing ads in newspapers that
are published in close proximity to the proposed disposal site. The ads will present an
opportunity for input by stakeholders near the sites, in addition to our Toronto-based
stakeholders, and other stakeholders who have requested to be on the project mailing list.
Following the receipt of input from the varied stakeholders we will submit the RFP evaluation
criteria to Works and Utilities Committee and Council for approval of issuance of the RFP.
We are following this process to ensure an ability to modify the RFP evaluation criteria in the
event that one or more proposals come forward that present significant impacts that are not
currently reflected in the evaluation criteria, such as agricultural impact by an as yet
uncertified "green-field" site.
We are scheduled to bring forward a report on this matter to the September 1999 meeting of
Works and Utilities Committee. At that time we will put forward recommendations for
ongoing public involvement in the natural and environmental components of the evaluation
process.
We are also recommending through this report that we initiate a process of developing
evaluation criteria for the "proven diversion" and "new and emerging technologies" at the RFP
stage through a multi-stakeholder public process. We are recommending that this be the
subject of a further report following the reporting out on the results of the REOI process.
Motion No. 6 (b):
"that the Commissioner of Works and Emergency Services include, in the evaluation process,
criteria which would address the following:"
(i) "local economic impacts and local economic development potentials";
(ii) "greenhouse gas reduction potential and performance;"
Response:
The current draft Disposal RFP evaluation criteria includes an "Ontario-based Benefits"
category. It requires the respondent to identify the Ontario-based job creation resulting from
the impact of a contract with Toronto, including the Greater Toronto Area based employment,
which is enhanced through a 1.5 weighting factor. In addition the respondent must identify the
Ontario-based purchase of goods and services resulting from the potential contract.
Within the "macro-environmental impact" evaluation criteria category, a respondent must
identify the greenhouse gas production potential and the reduction potential through gas
recovery and production of steam for heating and/or production of electricity, as part of the net
energy balance calculation.
Motion No. 6 (c):
"that staff draft Requests for Proposals in as broad terms as possible to permit flexibility,
innovation and creativity of responses;"
Response:
As noted in our response to Motion No. 4, listed above, we have introduced an additional
response form in the REOI (Form 3.3) to provide a direct ability for respondents to provide
responses with fluctuating tonnages to provide "openings" for reduction of tonnages. With the
introduction of this response form and the opportunity for respondents to respond to diversion,
disposal, or new and emerging technologies, we believe the marketplace has the opportunity
to respond with flexibility, innovation and creativity to meet the City's pressing disposal
needs and diversion policies.
We are not recommending that the REOI and RFP be designed to provide respondents with
the ability to submit proposals that contain inter-linked disposal and diversion components
through a combined RFP or concurrent RFP process for the following reasons:
- it would create a very complicated comparative evaluation process that would require
additional time and associated budget, and an end result that may be difficult to defend in the
event that one or more respondents turned to the courts for resolution;
- the solid waste management industry has firms that specialize in disposal and a growing
number of small and medium-sized companies that specialize in diversion. If the large
disposal oriented firms submit combined proposals they will be seeking longer contract
timeframes, in order to recover additional capital investments, than they may have otherwise
offered;
- if one or more of these proposals was to be adopted it may result in a loss in control over
marketing of the recyclable material, compost and energy produced by diversion facilities and
may eliminate the opportunity to consider public sector ownership and operation of such
facilities;
- these proposals may also come at the expense of engaging small and medium-sized firms
that specialize in diversion and want to maintain their inherent corporate flexibility to respond
to changing market conditions; and
- channeling large volumes of solid waste to large firms may result in the "export" of
processing jobs out of Toronto that would otherwise have been located here.
The approach we are recommending is to proceed concurrently with the REOI for all three
categories: proven diversion; disposal; and new and emerging technologies. After the receipt
of the REOI responses we would proceed in the following fashion:
- proceed with the Disposal RFP to secure the necessary disposal capacity we require when
the Keele Valley Landfill Site closes, which is projected in 2002. The quantity of disposal
capacity we would contract for would be linked to Council's policy of 50 percent diversion.
However, we will proceed on the basis that the 50 percent diversion can be achieved in 2002
through a combination of marketplace proposals and the public sector, through the
establishment of mixed-waste recycling and organic processing facilities; *
- in order to ensure that sufficient disposal capacity is available we will build sufficient
flexibility within our disposal contracts to meet any shortfalls in diversion, while also
ensuring flexibility through short-term disposal contracts and/or contracts which allow for
diminishing tonnages to move beyond 50 percent diversion, with the objective of an 80
percent diversion rate and ultimately "zero waste".
* Attached in Appendix "C", are a series of charts identifying: (1) the total tonnages of solid
waste resource managed by Toronto in 1998; (2) our current residential diversion rate; (3) the
target of 50 percent reduction; (4) the potential disposal scenario in 2002; and (5) charts
showing the progress from 25 percent to 80 percent reduction.
By maintaining a focused approach on diversion, as opposed to an inter-linked disposal and
diversion approach, we can achieve the following:
- provide direct opportunities for the diversion industry to submit proposals and expand
their market share;
- potentially create a mix of private and public sector diversion facilities;
- utilize public lands within the City of Toronto for diversion facilities (public and private
sector) to negate land purchase costs;
- create jobs in Toronto; and
- maintain corporate control of marketing and utilization of energy produced from diversion
technologies, such as anaerobic digestion of organics.
In addition, by focussing the attention of the disposal side of the solid waste management
industry on our disposal needs, we pool the waste disposal proposals in one category in order
to engage the marketplace in a manner that creates a competitive environment that offers clear
direction in order to receive detailed and comprehensive submissions. Respondents can
submit proposals in one or all three categories, but they will be evaluated separately.
Therefore, our recommended course of action is as follows:
- Works and Utilities Committee and Council approve the REOI for all three categories and
authorize its issuance;
- provide authority to the Commissioner of Works and Emergency Services to proceed with
the development of an RFP for proven diversion and new and emerging technologies. The
details of this RFP would be reported out following the conclusion of the REOI process and
would include: a plan for public consultation on the design of the diversion RFP evaluation
criteria; and recommendations associated with the mix of private and public sector diversion
activities;
- following receipt of the REOI proceed to the RFP for disposal to meet the City's pressing
needs, followed by the issuance of an RFP for proven diversion and new and emerging
technologies.
Motion No. 6 (d):
"in order to obtain the best disposal prices possible for the City by committing sufficient
volumes, the RFP process allow all respondents to make their longest term commitments;"
Response:
The REOI is structured to provide respondents with the ability to provide up to 20 years of
disposal capacity. While a respondent could identify in their REOI response an even longer
period of time, we believe that a contract of this length represents the upper limit of contract
length in the current marketplace.
Motion No. 6 (e):
"report on the following:"
"harmonizing and/or clarifying the definitions of "proven waste resource diversion", "proven
waste resource disposal" and "new, emerging and innovative technologies" as proposed in the
Mandatory Qualification Criteria for these categories;"
Response:
We have modified the definitions of "proven waste resource diversion", and "proven waste
resource disposal", so that they are harmonized. The definition of "new, emerging and
innovative technologies" does not carry the same definition due to the nature of this category.
The definitions cited above can be found in Tables C-1, C-2, and C-3 of Attachment C of the
REOI, which is attached as Appendix "D".
Motion No. 6 (e) (ii):
"the possibilities of "performance based criteria" rather than or in combination with
"prescriptive criteria" throughout this process;"
Response:
Performance based criteria is an inherent part of this process. It will be measured through the
macro-environmental and Ontario-based benefits component of the project to ensure
compliance with stated levels of environmental impact and employment creation.
As discussed in our response to Motion No. 6 c). listed above, we do not want to impose
performance criteria related to diversion on respondents submitting disposal capacity
proposals because of the drawbacks associated with this potential course of action. We
maintain that the City's diversion goals and objectives can be met by the component of the
marketplace specializing in diversion technologies in conjunction with public sector based
efforts including the introduction of new mixed waste material recovery facilities.
Motion 6 (e) (iii):
"provisions which could ensure that all greenhouse gas emission reductions, including
downstream reductions, would remain in the ownership of the City;"
Response:
The RFP will clearly state that greenhouse gas reduction credits as may be associated with
waste management proposals that will become the property of the City of Toronto. Thus the
City will accrue the financial benefits as may be established by future markets engaged in
trading emissions reductions.
Motion No. 7
"The Works and Utilities Committee requested the Commissioner of Works and Emergency
Services to submit a report to the Committee at the time of the Request for Proposals on the
possibilities for provision of flexibility in the City's collection strategies which would allow
optimization of diversion within proposals."
Response:
We are responding to this request for a report on flexible collection strategies at this time
because potential respondents need to be aware of the opportunity to propose diversion
technologies that are based on a source separated and collected solid waste resource stream.
An example is a household organics processing technology that relies on a source separated
organic feedstock from the curbside.
Accordingly, we have modified the REOI to invite respondents to submit proposals at the
REOI phase that are based on a dedicated source separated organic feedstock, in addition to
technologies that are designed to process both mixed waste and source separated organic
waste.
When we report out on the proposals received that require a dedicated source separated
feedstock we will factor in the associated additional collection costs that we would experience
in providing the necessary dedicated feedstock, in order to conduct a balanced comparative
analysis with other diversion proposals based on a mixed waste feedstock.
Conclusions:
This report has been submitted in response to the requests for additional information by
Works and Utilities Committee on March 24, 1999, regarding the March 15, 1999 report from
the Commissioner of Works and Emergency Services titled "Solid Waste Management
Marketplace Engagement Process - Request for Expressions of Interest."
We have recommended, in response to the Committee's direction, that the Commissioner of
Works and Emergency Services be authorized to prepare a planning process regarding the
establishment of a Request for Proposals for "proven diversion" and "new and emerging
technologies", which would be submitted after the reporting out of the results of the REOI for
"proven diversion", "disposal capacity", and "new and emerging technologies".
We have also attached, at Appendix "D" of this report, a modified REOI, which presents
harmonization of the definitions for the "proven diversion" and "disposal capacity" categories.
We are recommending adoption of this modified REOI and its issuance on April 26, 1999,
following Council approval.
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@toronto.ca
Angelos Bacopoulos, P.Eng.Barry H. Gutteridge
General ManagerCommissioner
Solid Waste Management Services Works and Emergency Services
Att. LJO/ljo:reoisr.doc
Appendix "A" (i)
October 2, 1998 Project Schedule
Appendix "A" (ii)
Refined Schedule, April 8, 1999
Account of Consultant Selection Process
List of Project Team Members
List of Project Team Members
Barry Gutteridge, Commissioner, Works and Emergency Services
Angelos Bacopoulos, P.Eng. , General Manager, Solid Waste Management Services
Andrew Pollock, M.B.A., Director, Policy and Planning Division, Solid Waste Management
Richard Butts, Director, Transfer, Processing and Disposal Operations, Solid Waste
Management
Lawson Oates, M.E.S., Manager, Strategic Planning, Solid Waste Management
James Anderson, Director, Municipal Law, Legal Services
Robert Mansell, external legal counsel, Tory Tory DesLauriers & Binnington
Pat Scanga, P. Eng. Engineer, Technical Services, Environmental Planning & Support
Tracey Ehl Harrison, Public Consultation Coordinator, Technical Services, Public
Consultation/Community Outreach
Carmela Romano, Manager, Budget Services Division, Finance Department
Carmine Bruno, Senior Budget Analyst, Budget Services Division, Finance Department
Pat Barrett, Communications Coordinator, Support Services
Michael Pratt, Proctor & Redfern Limited
Erin Mahoney, Proctor & Redfern Limited
Dave Merriman, P. Eng., M.B.A, MacViro Consultants Inc.
Sally Leppard, President, LURA Group
Appendix "B"
Draft RFP Evaluation Criteria
Appendix "C"
Solid Waste Resource Tonnage Charts
Appendix "D"
Modified REOI
