Operating Agreement for Commissioners Street
Material Recovery Facility (Ward 25)
The Works and Utilities Committee recommends the adoption of the report dated
March 15, 1999, from the Commissioner of Works and Emergency Services.
The Works and Utilities Committee reports, for the information of Council, having requested
the Commissioner of Works and Emergency Services to consult with the Ward Councillors
for the area, Councillors Bussin, Jakobek, Layton and McConnell, on the impact of the
opening of the Dufferin Material Recycling Facility on the Commissioners Street Material
Recycling Facility, and to report thereon to the Committee in the fall.
The Works and Utilities Committee submits the following report (March 15, 1999) from
the Commissioner of Works and Emergency Services:
Purpose:
The purpose of this report is to obtain Council authority to enter into a two-year agreement
with Canadian Waste Services Inc. for the operation and maintenance of the Material
Recovery Facility located at 400 Commissioners Street.
Funding Sources, Financial Implications and Impact Statement:
The preliminary 1999 Operating Budget submission for Costing Unit O SW210 R70022
Recycling Operations/Materials Recovery Facilities includes provisions for the operation and
maintenance of the Material Recovery Facility located at 400 Commissioners Street for 1999.
A preliminary estimate for the facility's operation and maintenance for the year 2000 has also
been prepared.
Recommendation:
It is recommended that authority be granted to enter into an amending agreement with
Canadian Waste Services Inc. for the operation and maintenance of the Material Recovery
Facility located at 400 Commissioners Street for a period of two years commencing January 1,
1999, and concluding December 31, 2001, subject to termination on 60 days' notice and
pursuant to the terms and conditions of the previous operation and maintenance agreement
which expired on December 31, 1998.
Council Reference/Background/History:
At its meeting held on September 24 and 25, 1997, Metropolitan Council adopted Clause No.
6 of Report No. 12 of The Environment and Public Space Committee entitled, "New
Operating Agreement for Commissioners Material Recovery Facility". The report included the
recommendation that Metropolitan Council authorize the Commissioner of Works to enter
into an operating agreement between Metro and Canadian Waste Services Inc. (formerly
WMI/Canada CRInc. Ltd.) for the operation of the Material Recovery Facility (MRF) at 400
Commissioners Street (Commissioners MRF), based on the existing agreement which was
then in effect between the parties but subject to a number of terms and conditions. Among
others, the report recommended that the term of the operating agreement will be one year with
a month-to-month extension clause of up to 24 additional months; any cancellation of the
agreement after the first 12 months will be at the sole discretion of the Commissioner of
Works, subject to providing 60 days' notice.
Comments and/or Discussion and/or Justification:
At its meeting held on August 15, 1990, Metropolitan Council adopted Clause No. 47 of
Report No.23 of The Management Committee which awarded a contract to New England
CRInc. for the design and construction of a Recyclable MRF at the former Commissioners
Street Incinerator site. The report further authorized the Metropolitan Corporation to enter into
detailed discussions/negotiations with New England CRInc. and to enter into an operating,
maintenance and marketing agreement for the above-mentioned facility. The operating
maintenance and marketing agreement commenced on June 1, 1992, when the plant officially
opened and was scheduled to terminate 24 months thereafter. The contract also contained two
12-month extension terms which could be exercised upon mutual agreement by both parties.
Metro staff and representatives from Canada CRInc. (a Canadian subsidiary of New England
CRInc.) were unsuccessful in their efforts to negotiate an extension to the contract before the
scheduled termination date of May 31, 1994. Council subsequently authorized the
Commissioner of Works to enter into a Continuation Agreement with Canada CRInc. for a
period of up to 120 days, and subject to terms and conditions to be negotiated by the
Metropolitan Solicitor and Canada CRInc. The Continuation Agreement provided staff with
sufficient time to issue an operation and maintenance tender call for the MRF, to review the
submissions, and to award the contract while the plant was still in operation.
At its meeting held on September 28, 1994, Metropolitan Council adopted Clause No. 13 of
Report No. 27 of The Management Committee, entitled "New Operating Agreement -
Commissioners Street Blue Box Material Recovery Facility". The report recommended that
authority be granted to enter into a new operating agreement with Canada CRInc. for the
operation of the MRF at 400Commissioners Street, for a period of 26 months effective
October 31, 1994 until December 31, 1996, subject to a number of terms and conditions. The
new agreement included an option to extend on a month-to-month basis for a period of up to
12 months at the discretion of the Commissioner of Works, subject to terms and conditions
satisfactory to the Commissioner of Works and the Metropolitan Solicitor. The award of the
operating agreement to Canada CRInc. was the result of a competitive bid process.
On November 20, 1996, Metropolitan Council adopted Clause No. 1 of Report No. 19 of
TheEnvironment and Public Space Committee which authorized the extension of the
operating agreement between Metro and Canada CRInc. for a further one year until December
31, 1997. The rationale for extending the agreement was to provide staff with the necessary
time to review future processing needs and resolve outstanding issues with respect to the
future of Metro's Blue Box processing facilities. Specifically, the extension provided staff
with time to prepare, issue, review and report on the Request for Proposals (RFP) for Blue
Box processing. Canada CRInc. was subsequently 'taken over' by Waste Management of
Canada (WMI) during the term of the extension.
At its meeting held on September 24 and 25, 1997, Metropolitan Council adopted Clause No.
6 of Report No. 12 of The Environment and Public Space Committee, entitled "New
Operating Agreement for Commissioners Street Material Recovery Facility". The report
recommended that Metro enter into a new agreement with Canadian Waste Services (formerly
WMI/Canada CRInc. Ltd.) for the operation of the MRF at 400 Commissioners Street. The
new agreement included a number of new conditions including a one-year operating term with
a month-to-month extension up to 24 additional months. At the time, staff chose not to
prepare a tender call for the operation of the MRF for a number of reasons. The results of the
RFP process were imminent. The preferred Blue Box processing alternative could have
resulted in the closure of the Commissioners Street MRF, or the operation of the
Commissioners Street facility at a lower capacity. Staff believed that a one-year operating
agreement, which was the longest time period that Metro was prepared to commit to in light
of the RFP evaluation process, would have resulted in higher processing fees through a
competitive bid process. Further, the provision to terminate the operating contract after the
first year, upon 60 days' notice, provided staff with the necessary flexibility to integrate the
Blue Box material processing activities with future facilities and/or activities as they became
available over the next one to three years.
The agreement dated January 1, 1998 (the Agreement), between the City and Canadian Waste
Services Inc. (CWS) for the operation and maintenance of the MRF located at 400
Commissioners Street expired by its provisions on December 31, 1998. It had been intended
that Council authority would be sought to extend the one-year term for an additional two-year
period as contemplated by the option in favour of the City contained in the Agreement. That
was not obtained prior to expiry of the initial term. CWS has agreed to continue to process
materials in accordance with the terms and conditions of the Agreement pending Council
approval of a new agreement.
The new agreement will embody the same terms and conditions of the Agreement save and
except for the length of the term (which would be for the contemplated two-year extension,
effective January 1, 1999, but still subject to termination on 60 days' notice).
Staff informed CWS that the City plans to have the Dufferin MRF in operation by the fall of
1999. Once the Dufferin facility is operational, less material will be directed to the
Commissioners Street MRF for processing. Preliminary estimates indicate that the
Commissioners Street MRF will still receive in excess of 25,000 tonnes of material in 1999.
Therefore, the annual processing rate of $57.50/tonne (including GST and all taxes) would
apply for 1999. However, during the final year of the new agreement, staff anticipate that the
Commissioners Street MRF will receive 15,000 to 20,000 tonnes of material at a processing
rate of $66.50/tonne as stipulated in the Agreement.
CWS has reviewed a draft copy of the proposed agreement prepared by the City Solicitor and
concur with the terms and conditions contained therein.
Conclusions:
The proposed agreement is, simply stated, an extension of the original contract as provided for
by the option in favour of Toronto contained in that contract. It was contemplated that the
option would be exercised prior to expiry of the initial term but inadvertently was not. The
two-year term of the proposed agreement, subject to termination on 60 days' notice, provides
staff with the necessary flexibility to manage material tonnages between the Commissioners
Street MRF, the Metro Waste Paper facility (which processes the former City of North York's
commingled container material), and the new Dufferin MRF. This operational flexibility will
enable staff to meet contractual processing (tonnage) commitments at the lowest possible
costs.
Contact Name:
Richard Butts
Director - Transfer, Processing and Disposal Operations
Solid Waste Management Services
Works and Emergency Services
Phone: (416) 392-8286; Fax: (416) 392-4754
E-Mail: Richard_Butts@metrodesk.metrotor.on.ca