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October
27, 1999
To:
Works Committee
From:
Barry H. Gutteridge, Commissioner, Works and Emergency Services
Subject:
Toronto Integrated Solid Waste Resource Management Process
Request
for Proposals for Proven Diversion Services
Purpose:
The purpose of
this report is to seek Council authority to issue the Toronto Integrated
Solid Waste Resource Management Process ("TIRM") Request for Proposals
("RFP") for Proven Diversion Services.
Funding
Sources, Financial Implications and Impact Statement:
There are no direct
financial considerations arising from this report.
Recommendation:
It is recommended
that the Toronto Integrated Solid Waste Resource Management Process
Request for Proposals for Proven Diversion Services be approved
for issuance on or about December 1, 1999, substantially in accordance
with the Request for Proposals document attached to this report
as Appendix "A".
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 Citys 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, City
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 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.
At its meeting
of April 13, 14, and 15, 1999, City Council approved the issuance
of the Request for Expressions of Interest ("REOI") document for
three categories: Category 1, Proven Diversion; Category 2, Proven
Disposal; and Category 3, New and Emerging Technologies.
On April 26, 1999,
the TIRM REOI was issued as per the Council approved schedule. The
TIRM REOI closed on May 31, 1999. A subsequent report, dated July
5, 1999 from the Commissioner of Works and Emergency Services, provided
members of the Works Committee and Toronto City Council with the
results of the application of the evaluation criteria to the thirty-two
(32) submissions received in response to the TIRM REOI. Of the thirty-two
responses received, twenty-three (23) were identified as qualified
to proceed to the Request for Proposals ("RFP") stage (TIRM Stage
3), with eight (8) responses qualified in Category 1, Proven Diversion
Capacity.
On July 27, 28,
and 29, 1999, City Council adopted recommended amendments to the
TIRM project schedule. The amendments further integrate the RFP
processes for acquiring new disposal capacity and for diversion
capacity, and will provide Council with the ability to make decisions
on disposal and diversion options in an integrated manner.
At its meeting
of September 28, 29, and 30, 1999, City Council approved the issuance
of a RFP for Proven Disposal Services, and adopted a recommendation
to engage MacViro Consultants Inc., and Tory Tory DesLauriers &
Binnington, to assist staff in the RFP process for new diversion
capacity. The RFP for Disposal Services closes on December 15, 1999.
City Council also authorized at that time the Commissioner of Works
and Emergency Services not to proceed with the design and issuance
of an RFP for New and Emerging Technologies, under Category 3 of
the TIRM Process. The Commissioner was also authorized to develop
a secondary planning process for the potential engagement of the
types of proposals previously submitted under Category 3 of the
TIRM Process.
Comments
and/or Discussion and/or Justification:
The attached RFP
for solid waste diversion services has incorporated the body of
policy decisions made by Council during the course of the TIRM Process.
The RFP is designed to provide the City with new diversion capacity
to meet and potentially exceed City Councils policy objective of
50 percent diversion of the residential waste stream by 2006 or
sooner.
The RFP is premised
on a "design, build, own, operate, and transfer" process for the
Respondents. It provides the City with the ability to engage the
marketplace for the provision of diversion technologies and the
marketing of recovered resources on a fee per tonne basis. Should
a City-owned site be used the City would have the option to purchase
an operating facility at a depreciated price at 2, 5, 10, and 15-year
intervals, following the initiation of operations. At the end of
the 20-year operating period Toronto will have the right, at its
sole discretion, to take over the ownership of the facility at no
cost.
The RFP provides
Respondents with the option of siting a facility on their own property
(leased or owned outright) or proposing siting a facility at a City-owned
transfer station or other City property.
For the purpose
of this RFP, potential utilization of the Scarborough Transfer Station
(near Markham Road and Sheppard Avenue East) is proposed for comparative
purposes. The Scarborough site has existing amenities such as weigh
scales, waste compaction equipment, and an existing Certificate
of Approval for solid waste management.
The potential
utilization of a transfer station follows the established policy
of siting diversion facilities at transfer stations. The City currently
has a Materials Recovery Facility operating at the Commissioners
Street Transfer Station in the Portlands, and is proceeding to construct
a new Materials Recovery Facility and a mixed waste recycling and
organics processing facility at the Dufferin Street Transfer Station
(near Dufferin Street and the 401). The facility at the Dufferin
Street Transfer Station has the potential to expand to a throughput
capacity of 100,000 tonnes of mixed waste per year or 150,000 tonnes
or organics per year.
Additional transfer
stations and other City-owned land may be subsequently identified
as we proceed to consider implementation of diversion facilities.
The option of
utilization of City-owned facilities is being proposed through the
RFP for Diversion Services, unlike the RFP for Disposal Services,
for several reasons, which are summarized as follows:
- The approvals
process for certain types of diversion facilities is different
from that of a disposal facility. If the City were to offer City-owned
land for a disposal facility we would be virtually assured of
being named as a co-proponent in an Environmental Assessment under
the Ontario Environmental Assessment Act. By contrast, the approvals
process for facilities processing leaf and yard waste and some
source separated materials is governed by Standardized Approval
Regulations ("SARs"). The SARs allow for approvals without proceeding
through an individual Environmental Assessment or the issuance
of a Certificate of Approval. Other approvals for diversion facilities
may require a Certificate of Approval. There remains the potential
for the Minister of the Environment to designate any diversion
facility under the Environmental Assessment Act;
- Utilization
of existing facilities reduces the costs associated with the diversion
projects and therefore assists in meeting Councils policy objective
of 50 percent diversion by 2006 or sooner;
- Our transfer
stations are currently receiving and handling large volumes of
solid waste and have established traffic pattern flows and hours
of operation, and provide at-hand the means to manage residuals
that require disposal; and
- Utilization
of our transfer stations demonstrates a commitment and willingness
to manage a percentage of our solid waste resources within the
City, and reduces transportation impacts associated with the movement
of solid waste resources beyond our borders.
In accordance
with City Councils policy objectives, the RFP for Diversion Services
is designed to provide the City with the flexibility to address
future policy modifications and solid waste resource market changes,
through the following means:
- for a facility
located on Toronto property the RFP provides Toronto with the
ability to acquire ownership at 2, 5, 10, and 15-year intervals
and to integrate City staff (union and management) into the plant
operations one-year prior to the transfer of ownership to facilitate
a skills and knowledge exchange;
- the RFP provides
Toronto with the ability to renegotiate the operating and maintenance
fee per tonne at 2, 5, 10, and 15-year intervals to account for
any increases in the prices of products;
- Respondents
can offer partnership proposals for alternative revenue and risk
sharing arrangements, in addition to mandatory fee per tonne proposals;
- Toronto can
ensure that material coming into a diversion facility on City-owned
land is City-only material;
- a preferred
customer clause will be in place for facilities on non-Toronto
land, where Toronto is providing for over fifty (50) percent of
the materials managed;
- Toronto can
have the Respondent assume all risk for marketing output materials,
or re-negotiate to receive a percentage of the revenue for marketed
materials;
- Toronto maintains
ownership of all associated emission credits, including greenhouse
gases reduction credits; and
- Toronto will
have the option to contract with one or more Respondents offering
a range of technologies, including the ability to manage mixed
waste and/ or source separated organics, and/or leaf and yard
wastes.
Development
and Application of Evaluation Criteria
The evaluation
process includes the initial application of mandatory screening
criteria followed by the
application of
the following four comparative evaluation criteria:
- Net Greenhouse
Gas Emissions (15 points);
- Traffic Impact
(10 points)
- Jobs and Investment
(15 points 10 in Toronto and 5 in Ontario); and
- Waste Diversion
Rate to System Cost Ratio (60 points as it captures both diversion
and cost).
The evaluation
criteria will be applied to the Respondents service proposals.
The service proposal will consist of the Respondents technical
(environmental) proposal, price proposal (fee per tonne), exceptions
and partnership offers. Part A, Section 5 and Appendix B of the
RFP document provide a description of the mandatory and comparative
evaluation criteria and the process to identify top-qualified proposals.
The top-qualified
proposals will then be carried forward to City Council following
the evaluation, including the consideration of any partnership offers.
At that time we will seek Councils authorization to proceed with
due diligence and contract negotiations.
The project schedule
calls for the top-qualified proposals to be before Council in April
2000, with a recommendation(s) regarding engagement in contracts
in August- September 2000.
Stakeholder
Consultation on Diversion
Prior to the development
of the Diversion RFP document, stakeholders were invited to a meeting,
held on September 9, 1999, at Toronto City Hall. The purpose of
the meeting was to solicit stakeholder input on the evaluation methodology
to be used in the selection of top-ranked proposals. A letter dated
August 30, 1999 was sent out to those on the project database inviting
them to participate. This database includes all those who have expressed
an interest in this project in the past. In addition, advertisements
inviting the public to this meeting were placed in City of Toronto
community newspapers during the week of August 30, 1999. (Comments
were also invited by telephone, fax, e-mail and mail.) As a result
of this meeting, the following three "high priority" evaluation
criteria were identified by the participants: health and the environment;
residue threshold; and quality of the end product.
The projects
newsletter (Volume 2, Bulletin 4, October 1999) features a summary
of the stakeholder meeting held on September 9, 1999.
Qualified Respondents
in Category 1, Proven Diversion, were also invited to comment on
the RFP evaluation methodology prior to the development of the RFP
for Diversion. Input from the Respondents was taken into account
when formulating the RFP document.
Site specific
consultation will take place as facilities are identified for engagement
of diversion facilities. Advertised events, such as open houses,
will be held at City owned locations where diversion facilities
will operate in order to familiarize interested members of the public
with the diversion technologies, solicit feedback, and encourage
public involvement in diversion programs.
Other consultation
activities planned for the diversion process include an information
session on the RFP submissions received and stakeholder consultation
on diversion systems. Stakeholders will continue to be notified
of opportunities for public participation and updated on the TIRM
Process through the project newsletters and postings on project
information on the web site.
Conclusions:
We are recommending
that Council approve the issuance of the TIRM RFP for Proven Diversion
Services, on or about December 1, 1999, substantially in accordance
with the RFP document attached to this report as Appendix "A". The
RFP for Diversion Services is scheduled to close on February 29,
2000. A list of top-qualified Proposals is then scheduled to be
recommended to Council in April 2000, with recommendations for contracting
to come before Council in August-September 2000, following the due
diligence process and contract negotiations.
Contact
Us:
Lawson Oates,
B.A., M.E.S.
Manager, Strategic Planning
Solid Waste Management Services
Works and Emergency Services
Metro Hall, 19th Floor
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
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