STAFF REPORT

February 22, 2000

To: Works and Committee

From: Barry H. Gutteridge, Commissioner, Works and Emergency Services

Subject: Toronto Integrated Solid Waste Resource Management ("TIRM") Process

Amendment to Consultant Agreement

Purpose:

The purpose of this report is to request additional funding in connection with our consultant's due diligence workplan for the Toronto Integrated Solid Waste Resoruce Management ("TIRM") Process Request for Proposals for Proven Disposal Capacity.

Financial Implications and Impact Statement:

An increase, in the amount of $193,000.00, inclusive of GST, to our existing contract with Earth Tech (Canada) Limited (formerly Proctor & Redfern Limited), is being requested in this report to permit the completion of the due diligence program under the TIRM RFP for Disposal Services. This can be accommodated within the approved 2000 Capital Works Program, under Program C-SW 168 (Waste Management Planning).

Recommendation:

It is recommended that authority be granted to amend the existing consulting services agreement with the engineering firm of Proctor & Redfern Limited (now Earth Tech (Canada) Limited) by an additional amount of $193,000.00, inclusive of GST, to undertake the necessary due diligence workplan associated with Toronto's Integrated Solid Waste Resource Management Process Request for Proposals for Proven Disposal Capacity and to provide contract negotiations support.

Background:

On October 1 and 2, 1998, City Council adopted Clause No. 2 of Report No. 8 of the Works and Utilities Committee approving a budget in the amount of $1,142,500.00, for the TIRM Process (formerly known as the Solid Waste Management Marketplace Engagement Process). The budget for the project's planning consultant, Earth Tech (Canada) Limited ("Earth Tech"), was set at $722,500.00 (inclusive of GST), including a contingency allowance of $200,000.00 (inclusive of GST), to fund additional work, if necessary.

Also included in the $1,142,500.00, were funds for Torys (formerly Tory Tory DesLauriers & Binnington), to provide external legal counsel at a cost not to exceed $200,000.00, inclusive of GST, and a contingency allowance of $28,200.00, inclusive of GST. Authorization was also provided in the amount of $220,000.00, inclusive of GST, for site visits, advertising, communications, and public consultation activities.

Through a Notice of Motion (10 a.), adopted by Council on November 25, 26, and 27, 1998, $82,510.00, inclusive of GST, was re-assigned from the contingency allowance to Earth Tech'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.

On April 13, 14, and 15, 1999, City Council adopted Clause No. 1, Report No. 5 of the Works and Utilities Committee, assigning a further $95,395.85, inclusive of GST, to Earth Tech to develop a separate haul tender and develop a protocol to utilize Toronto public sector employees (from the contingency allowance). Therefore, the remaining contingency budget for Earth Tech was reduced to $22,094.15, inclusive of GST.

At that time we advised that we may have to seek authority to direct funds to Earth Tech's main budget in order to provide for due diligence activities, depending on the outcome of the evaluation process in connection with the submissions received for Proven Disposal Capacity.

Discussion and Justification:

A key component of the Earth Tech workplan include analysis of responses, due diligence, contract negotiations support, and report preparation. A substantive contingency allowance was identified to cover additional tasks that could arise from the process, including the carrying out of due diligence reviews of disposal sites beyond three disposal sites identified in the proposals from top-qualified Respondents, which had been budgeted for.

Another report listed on the agenda of Works Committee's Special Meeting of February 24, 2000 contains recommendations in connection with the identification of top-qualified Respondents.

The purpose of the due diligence investigations is to confirm the accuracy of the information pertaining to the facilities identified by the Respondents in their proposals (including contingency sites), both from a policy and a technical perspective. This work includes:

(1) an examination of the licensing and regulatory process to which the facility is subject;

(2) an assessment of the compliance of the facility with all regulatory requirements;

(3) a review of the nature, terms, and conditions of any agreements between the site owners and the host municipalities and counties;

(4) a comprehensive tour of the landfill sites;

(5) meetings with appropriate technical personnel responsible for the design and operation of the facilities; and

(6) a review of relevant reports, files, and drawings pertaining to the site.

The above information is important to have in order to make an informed decision on the selection of the preferred proposal(s).

The original TIRM RFP budget for Proven Disposal Capacity authorized by City Council in October 1998 was $722,500.00, inclusive of GST, and a contingency allowance of $200,000.00, inclusive of GST. This funding was based on carrying out due diligence on three top-qualified proposals. The adjoining report recommends that five proposals be identified as top-qualified and carried into TIRM Stage 4 (due diligence and contract negotiations). One of the proposals contains two proposed modes of transportation (truck or rail-based) and therefore requires an additional aspect to the due diligence. As a result of the recommendation to carry forward five proposals into TIRM Stage 4 additional funding is required.

The total identified cost for the additional due diligence work is $215,000.00. This report recommends that Earth Tech's main budget be amended by an amount of $193,000.00, inclusive of GST, which can be accommodated within the 2000 Capital Works Program, under Program C-SW 168. In addition, we are amending Earth Tech's main budget through the award of the remaining funds in the Contingency Allowance ($22,094.15 inclusive of GST), which is within the authority of the Commissioner of Works and Emergency Services to award, as provided by City Council.

Conclusions:

We recommend that our existing contract with Earth Tech be increased by $193,000.00, inclusive of GST, to complete the due diligence process and to provide contract negotiations support in connection with TIRM Stage 4 (due diligence and contract negotiations with top-qualified proposals) for Proven Disposal Capacity.

Contact:

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

Manager, Strategic Planning

Solid Waste Management Services

Phone: (416) 392-9744

Fax: (416) 392-4754

E-mail: loates@toronto.ca

Angelos Bacopoulos, P. Eng.

General Manager

Solid Waste Management Services

Barry H. Gutteridge

Commissioner

Works and Emergency Services

JS/LJO/ljo:md/earth1.doc