Staff Report

February 28, 2000

To:  City Council

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

Subject:  Torontos Integrated Solid Waste Resource Management "TIRM" Process Identification of Top-Qualified Proposals for Proven Disposal Capacity Supplementary Report

Purpose:

The purpose of this report is to respond to the request of the Works Committee to provide additional information in connection with the recommended advancement into Stage 4 of the TIRM Process (due diligence and contract negotiations) of the final group of top-qualified Category 2 (Proven Disposal Capacity) proposals. Works Committee requested the Commissioner of Works and Emergency Services to report directly to City Council for its meeting on February 29, 2000.

Financial Implications and Impact Statement:

There are no direct financial implications arising from this report.

It is recommended that this report be received for information.

Background:

On February 24, 2000, a Special Meeting of the Works Committee was held to consider three reports (all dated February 22, 2000) from the Commissioner of Works and Emergency Services. Two reports were in connection with the TIRM Process. One of these two reports carried recommendations regarding the advancement to Stage 4 of the TIRM Process (due diligence and contract negotiations) of the final group of top-qualified proposals for Proven Disposal Capacity.

The second of the two TIRM-related reports carried a recommendation regarding an amendment to the consulting agreement with Earth Tech (Canada) Ltd. (formerly Proctor & Redfern), to provide for required funds to conduct due diligence activities and contract negotiations support. The third report was in connection with the proposed CUPE Waste Management Plan.

The Works Committee adopted all three of the above-cited reports, which are listed on Councils Agenda for February 29, and March 1 and 2, 2000.

This report is in response to requests for additional information in connection with the report recommending advancement to TIRM Stage 4 of the final group of top-qualified proposals for proven disposal capacity.

Comments:

The Works Committee requested the Commissioner of Works and Emergency Services to report directly to Council for its meeting on February 29, 2000, on the following three information requests.

Information Request No. (i)

"As much information as can be made public at this time with respect to the evaluation criteria used to calculate the ranking of the proposals."

Response:

At its meeting of September 28, 29, and 30, 1999, City Council approved for issuance a request for proposals ("RFP") for solid waste disposal services (Clause No. 1 of Report No. 3 of the Works Committee, as amended). Section 5.0 of Part A of the RFP contains an explanation of the evaluation criteria and evaluation method Toronto intended to use to evaluate Responses to its RFP and identify the top-qualified proposals. The pages which comprise Section 5.0 (pages A-24 to A-32) have been attached to this report and are listed as Attachment A. Also attached (Attachment B) is page 13 of Appendix B of the RFP, which provides an explanation of the statistical method for evaluating raw performance scores to yield final scores (the "z score method").

The design and application of the evaluation criteria and methodology is to provide for an objective, fair and equitable treatment of all considered proposals. While a ranking was provided in the report of February 22, 2000, the ranking is in fact academic, as the recommendation is to carry all eight of the top-qualified proposals into the next stage of the TIRM Process, where competitive negotiations with all Respondents will take place.

It would not be productive to the negotiations to provide at this time any of the actual scoring results making up the rankings.

Information Request No. (ii)

"All the locations of the contingency sites."

Response:

The Citys RFP for solid waste disposal services directs Respondents to provide a "Proposed Service Plan that describes how waste is to be managed from time of delivery/acceptance at the respective transfer station(s) to the time of ultimate disposal." (page B-6, Section 3.0) Among a number of components of the proposed service plan is the requirement to provide contingencies that will be in place to ensure uninterrupted service to Toronto.

The provision of contingency sites has been factored into the base bid price offered by Respondents. If the City of Toronto did not require this provision, an alternative process would have to be developed and implemented to secure contingency disposal capacity in the event of a service disruption. The proposed contingency sites and the terms and conditions for their use will be subject to contract negotiations.

Contingency sites will only be utilized in the event that services to the site under contract are temporarily disrupted, for example, by an event such as a storm that could impact service delivery. Contingency sites will not be considered as locations to receive Torontos residual solid waste on a regular ongoing basis.

The February 22, 2000 report to Works Committee contains the identification of the proposed contingency sites as provided by the top-qualified Respondents. The pertinent information from Attachment A of the Commissioners report is reproduced in this report for reference, and is listed as Attachment C. Included in Attachment C is the most recent information provided by Rail Cycle North.

Information Request No. (iii)

"How the willingness of the host community has been, would be, or could be incorporated into the due diligence process as it proceeds."

Response:

At its meeting of September 28, 29 and 30, 1999, City Council did not adopt a proposed recommendation that a willing host criterion be incorporated as a mandatory criterion for any disposal contract which Toronto would consider. Therefore, a willing host criterion is not part of the TIRM RFP Process.

The RFP for Solid Waste Disposal Services reserves the right of Toronto to:

"consider any mechanisms which the Respondent may be employing to consult with the community in which the Respondents facility is located. Toronto reserves the right to consult with appropriate municipal representatives of the host community." (page A-35)

This would be pertinent for U.S. sites, where host municipality agreements may be relevant as part of the due diligence in assessing the existence and status of such agreements in connection with potential State flow control.

Conclusions:

This report has provided responses to information requests regarding: (i) evaluation criteria and the evaluation methodology for solid waste disposal proposals under the TIRM process; (ii) the locations of the contingency sites; and (iii) how the willingness of the host community has been, would be, or could be incorporated into the due diligence process as it proceeds.

We recommend that the information contained in this report be received for information.

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
General Manager
Solid Waste Management Services

Barry H. Gutteridge
Commissioner
Works and Emergency Services

LJO/ljo:md/addinfo.doc

List of Attachments:

Attachment A - Proposal Evaluation
Attachment B - Detailed Explanation of Statistical Method for Evaluating Raw Performance Scores to Yield Final Scores
Attachment C - Summary of Contingency Sites Proposed by Top-Qualified Respondents

BFI Waste Systems of North America, Inc.
In the event that a backup disposal location is required, BFI proposes the use of American Ref-Fuel Company of Niagara Falls, New York; Vienna Junction Landfill, Carbon Limestone Landfill; Ottawa County Landfill; Ridge Landfill; Niagara Landfill; Sauk Trail Hills Development, Inc.; and Citizens Disposal, Inc.

Essex-Windsor Solid Waste Authority
Essex-Windsor has signed a Memorandum of Agreement with a third party Republics Michigan landfill site (this information known from Republics proposal) to provide contingency disposal capacity if circumstances prevent the disposal of waste at the Essex site.

Green Lane Landfill
Should site closure occur, Green Lane Landfill would secure replacement capacity in consultation with Toronto.

Rail Cycle North
In its Expression of Interest ("EOI") submission Rail Cycle North provided an inventory of the landfill capacity available to Canadian Waste Services (a member of the Rail Cycle North consortium) in Ontario, and landfill capacity in Michigan (permitted to receive waste from Ontario) held by its U.S.-based parent company Waste Management Incorporated ("WMI").

In their RFP submission, Rail Cycle North advised that capacity available at the Adams Mine Landfill would be backstopped by contingent capacity at alternative Ontario and out-of-province sites owned and operated by Canadian Waste Services and its parent, WMI.

We have now received additional information from Rail Cycle North regarding their proposed contingency sites. They have advised us that their proposed primary contingency sites are the Richmond and Warwick Landfills located in Ontario. Their proposed secondary contingency sites are Pine Tree and Woodland Meadows located in Michigan. Richmond and Warwick are halfway through the approval process for expansion of capacity and daily tonnage. Rail Cycle North expects their Environmental Assessment planning processes to be complete before service to the City commences, if a contract was awarded to Rail Cycle North. In the event that these projects were delayed, Rail Cycle North proposes to use Pine Tree and Woodland Meadows, both of which are permitted and currently receive waste from Ontario, as secondary contingency sites.

Rail Cycle North has advised that the "role of Richmond and Warwick as contingency sites only for Toronto MSW [municipal solid waste] has been a matter of public record in both communities for more than a year and has been discussed with representatives of those communities." They also advise that this has been explicitly stated in the Environmental Assessment Terms of Reference documents approved by the Minister of the Environment.

Republic Services of Canada (Truck and Rail Haul Options)
In the event of the need for a backup site, Republic proposes to use its Brent Run Landfill located north of Flint, in Genesee County, Michigan. In the event of the closure of the Canada-USA border, Republic has an agreement to utilize the Essex-Windsor Landfill site.