June 30, 2004 Report – Special Meeting
Re: Staff report dealing with proposed modifications to the city's Solid Waste Management Master Plan

4 pm. No quorum at 4:10.

Attendees - Pearson, Kelly, McCarthy, Bruckler, Mitchell, Merulla, Powers, Collins, Di Ianni.

Clerk - delegation requests
No declarations of interest

C11 - 10503 - Award of Contract
Di Ianni - Process - only receive presentation this afternoon - on July 14 th - COW to make decision based on information received this afternoon. We must also decide what to do with delegation requests - either hear them today or can have special meeting to hear these delegations and advertise this meeting to public.

Kelly - If to be heard on meeting of 14 th - will we advertise public delegations for that meeting?

Di Ianni - Yes - between now and 14 th - Q is when. What is wish of committee?

Collins - How should we treat the private interests that have come forward and requested to appear as delegations?

Crockett - Deal with separately. Rinaldo - Agrees

Di Ianni - Yes, - this relates to an RFP process therefore want to do by book - don't want to be accused of being unfair. Two companies who want to participate as delegations who may fall into that category. Have two other individuals from the public - not sure if they are representing companies.

Collins - Hear today - or schedule separate time for them too. Can clerk pull council out to another meeting? Not sure.

Merulla - Private sector - don't hear - out of ordinary to do so.

Di Ianni - Yes - agree - private sector individuals should deal with staff and staff will determine what to recommend.

Merulla - Advertise public input properly and make a date to hear this.

Collins - Add to COW meeting of 14th ?

Di Ianni - Need to consult with staff re: when. Motion passed to advertise/hear from public.

Staff Presentation from Beth Goodger, Director of Waste Management:

Recommendations for council consideration re: outcome of RFP. Today tabling results for consideration - in preparation for July 14 th meeting. Will be scheduling special info sessions for July 12 th - more details to be provided to council at these meetings.

Refresher - RE: How this fits with overall SWMMP - including alternative options because of financial situation of city.

• SWMMP approved by council on Dec 11/01
• 65% diversion by end of 2008
• System that includes:
  • MRF, Organics collection, CCF, recycling & reuse centers.
  • Operational by 2006
  • SWARU loss - imperative that we move forward with plan implementation.

Current system - would see landfill close in 10 yrs. But 65% diversion by 2007 means 21 years of landfill life.

Recycling = 1/3 of waste stream, Organics = 1/3 (household and yard), other 1/3 = residual that would continue to landfill.

**See diagrams/ slides in staff report.

RFP work - intensive - site selection process on-going at same time - challenging - but Burl St facility determined to be preferred location.

• details provided re: RFP evaluation process.

Regular updates were made to the Solid Waste Management Master Plan Committee and the Waste Reduction Task Force.

RFP - three parts - design, build, operate
Project A - Materials recycling
B - Central Composting Facility
C - Both facilities

1579 Burlington Street - the site selection process identified this as the preferred location.

Materials Recycling Facility - included marketing of recyclable materials

All must make use of city's employment placement program.

MRF - State of art - with 60,000 tonnes per year capacity for each facility to meet 25 year requirements of municipality. Etc - details provided re: requirements for each facility.

Acceptable proposals - see staff report for details.

• submissions for both projects exceeded capital budget estimates
• Evaluation found that capital costs are creating budget pressures
• Additional options were explored to determine if there were alts avail to alleviate capital pressures.
• Capital costs creating enormous financial pressures on the city - explore alts to ease these pressures. Why are these costs higher than budgeted??

Budgetted Amount VS Amounts provided via requests for proposals:

MRF - 12 mil vs 21.6 mil
CCF - 14 mil vs 31.6 mil
Engineering - 7 mil vs included
Total - 33 mil vs 53.2 mil

Increases largely due to improvements in technologies for these facilities - has increased cost of these facilities. MRF - costs higher than projected because of changes in technology - cost here for single stream technology.

Another driver - engineering costs - included in design aspects of design/build/operate proposals. Another factor = steel prices - increases over costs in 2001. Other factor - our estimates weren't inflated from 2001.

Joe Rinaldo - Re Financial impacts:
Analysis only on the two projects - CCF and MRF - have asked staff to update for entire SWMMP.
Explored 7 options - looked at capital and operating costs based on different alternatives - use present value to compare alternatives - look for best overall option in long run.
Option #3 - upgrade MRF, build CCF
Option #7 is the one staff is recommending - some level of upgrade to MRF

New MRF and CCF - we would be $33 mil over and above our capital program.
Impact on operating budget - add'tl debt charges - 424 mil in debt by 2006 if we go with Option #3. Therefore need to look at alts to reliance on debt - or will see unfavourable tax increases over coming years.

2004 - 50 million or other programs aside from SWMMP and Red Hill Creek Expressway.
If we spent dollars on a MRF now, in 2005 we would only have 21 million for other budget needs if we go ahead with both facilities.

**See staff report for detailed charts.

DO nothing - to 35 mil by 2007 - and a 1.5 % tax inc over those three years as result.

New MRF and new CCF - from 27 mil to 42 mil - and a 3% tax inc over next three year for waste mgmt alone. Would go from 27mil to 39 mil in capital prog - a 2. 5 % tax inc over next three years.

Beth Goodger - conclusions

• increase in cost from 2006 - 2020 regardless of options selected
• CCF - critical for city to reach 65% diversion
• Alt options available for processing recyclables in short term (5yrs) that will sig reduce capital costs.
• Maintaining current diversion levels is not a cost effective option.

Can upgrade our MRF, use existing facilities, etc - to avoid having to build something new over next 5 years. Alternative - seeking out new landfill site - totally counter to our SWMMP.

Maple Reinders Constructors Ltd - state of art facility based on tech from Netherlands - leaders in this area

• Aim Environmental - to undertake operations of facility ( a Hamilton-based company)
• Facility is enclosed - an aerated static pile technology - done in very large concrete tunnels - air from composting contained in the tunnels - odour can be controlled.

Report recommendations: (see staff report for details)

• To not award project a or c at this time
• Review alt options for recyclables processing to get through the 5 yr window
• 29.3 mil = estimated capital cost for this facility
• excess capacity at composting facility - seek partnerships - arrange for shared revenues for shared capacity.
• Sufficient funds to begin works - address cost of entire project in 2005 cap budget process.
• Request province to transfer Millenium funding from MRF to CCF.

Questions from COW members:

Merulla - With respect to not going forward with this at all - if to pursue this endeavour internally - what would the impact be?

BG - Don't have resources/ expertise to do this internally - the CCF. To get those resources - time - wouldn't meet Jan 2006 timeframe. Wrt MRF - addressed internal submission - weren't able to entertain that proposal - option recommending = upgrade MRF - and could we run it? Got that answer in 2002 when we awarded current contracts - awarded to Canada Fibres - internal costs were higher.

Merulla - Has anyone actually asked whether internal proponents could meet the Jan 2006 deadline?

BG - NO - didn't further consider based on direction received from city council in May 2004.

Di Ianni - there was some significant legal advice on how to proceed therefore staff, with council direction didn't pursue internal issue at all.

Merulla - Have we asked internal proponents whether they could meet Jan 2006 deadline? That's my question.

BG - No.

Rinaldo - They did not make submission on compost facility but on MRF and we're not proceeding with a MRF at this point in time.

Merulla - With respet to the dumping of garbage into city from other municipalities to generate revenue - any public discussion? What would fallout be from public perspective?

BG - Sharing of diversion facilities completely in keeping with SWMMP.

Merulla - Are we looking to increase revenues via waste from other municipalities?

BG - We will pursue discussions with other municipalities re purchasing excess capacity we may have. Not pursuing capital partnerships - but purchasing of excess capacity. Still consistent with SWMMP - but details of sharing arrangement must be spelled out.

Merulla - Then why not pursue with municipality that has overcapacity? ????? Have we pursued municipality that might have overcapacity so that we might share their services with them?

BG - Yes - surveyed re: composting capacity and there isn't enough composting capacity in Ontario at this time.

Merulla - When did RFP go out to public sector?

BG - Nov 28/03 and closed on Mar 19/04

Merulla - With respect to rationalization of overbudget - why not include in Nov 28/03 RFP?

BG - Had estimated budget through Master Plan then put out to private sector and our team wrt what RFP actually said and what SWMMP said - getting pricing based on RFP doc and understanding of SWMMP.

Collins - My question is with respect to Recommendation f - excess capacity at the CCF and potential partnership opportunities - we don't want to take in more waste than we are generating. Concern that if we open door to selling capacity - we will be importing more waste than generating. Part f - question - have we entertained something that looks like a zero sum gain? I might be able to support this. Ie. We accept some compostables but are sending out an equivalent amount of ie recyclables.

BG - Would like to - and could explore this if given direction from council - ie. partner with another municipality and use same trucks to move materials.

Collins - costing - updated forecast for all waste initiatives - how do we get a breakdown of that?

Rinaldo - We will provide this detail at July 12 th meeting

Collins - We need to go into camera at some point on that.

Di Ianni - Yes on a contractual issue - will do at appropriate time.

Bruckler - Excess capacity - ie. if we build facility for our peak capacity, would the excess be used by other customers at non-peak times - ie. would we be offering this excess to other municipalities?

Rinaldo - It is in our best interests to optimize use of facility to create best situation for taxpayers.

Bruckler - We are therefore not looking at a facility that would purposely bring in waste from outside - just to make our operation more efficient? Are costs factored in to status quo - for new landfill?

Rinaldo - Yes - factored in to future years - 2011 and beyond is when we'd need to look at this need.

Bruckler - I assume reason we're looking at CCF vs MRF is because we have a relatively operational MRF - so the highest urgency here is for the CCF?

BG - Yes

McCarthy - Don't want to be seen as dumping ground for other municipalities but flexibility to negotiate sharing?

BG - Would have to layer on a constraint - saying we will not talk to a given municipality unless they are able to have some sort of sharing arrangement with us. (ie change recommendation f)

Di Ianni - This presentation is for information purposes only - so when we consider for decision making on July 14 th , we can make proposals to change the recommendations. Mitchell - Modern technology and capital cost more than doubling on one and almost doubling on other and because of modern tech the cost increases. But usually with modern technology there is a payback somewhere - the technology brings added benefits. Otherwise why would people want to spend more on the technology? Answer on this?

BG - What you are seeing is, unfortunately, the way we have to present numbers. You see only the capital costs of the preferred proponent. Would have to see operating costs too and how investment in capital impacts on operating costs - true that investment in capital generally reduces operating costs.

Rinaldo - With waste management, my experience has been that increasing capital cocst does not increase operating efficiency (does not translate into reduced operating costs)

Mitchell - One truck to do all as way to increase efficiency - are we exploring this?

BG - working on different collection models right now - once we know what we are doing with facilities - we will be able to tell you details about collection.

Mitchell - I want to see all of this - lots of companies profess that it's a lot cheaper to do it that way. Three waste stream process - I'm not sure it's efficient. If we begin a search for a landfill - and public catches wind of this - wouldn't this be a good way to increase recycling, etc.?

BG - At best with recycling would see 35 to 40% of waste stream diverted - would still see need for landfill site. Complexity of provincial EAA - don't want to go in that direction.

Ferguson - The sooner we get an EFW (energy from waste or incinerator) OK'd the better. We need to speed up the provincial side of things. Have we costed out sending our waste to Michigan as an option?

Crockett - Challenge for Toronto - no guarantee that the Michigan route is always open.

Ferguson - My very point - that as an alternative is not an alternative - therefore this report is a reality check. Could I get a brief update on the EFW??

BG - Niagara / Hamilton- working on Terms of Reference for an EAA - likely to start in fall with assessment.

Rinaldo - EAA process - difficult to assess time frame - at least 10 years.
Estimates in here - low - haven't factored in net operating costs.

Morelli - Session on 12 th and then contract presented on 14 th ?

BG - Expecting decision on report on 14 th - authorization to negotiate key terms and conditions based on proposal submitted for CCF.

Morelli - Would cost be fixed at that particular time?

BG - No - would have to negotiate final arrangements re: how things would sit on site - Do we have to go ahead with scalehouse, etc.

Morelli - Will it come back to us in final form? Any opportunity to construct in module form? Also see - visitors office - education rooms, etc. Do we have a Cadillac or a Volkswagon? Marginal diffs going different ways - can we see that before this is negotiated??

BG - Negotiate based on proposals submitted - value engineering process to understand needs and wants - must also deal fairly with all proponents.

Morelli - Implementation can follow many formulas - implementation must be looked at in terms of needs and wants - implementation and marginal gains and gaps - make sure we max as well as - need to know whether good value for us.

BG - Point well taken - at least - want authority to go ahead and negotiate and could come back with those alters for consideration. Tech proposed is modular and have thought of - import to consider module for a greater size. Proposing facility that meets needs over next 25 yrs.

Morelli - Where does it take us - 2010? Module - also need to be able to understand the marginal gaps - need to understand what the alts are and over what periods of time

Di Ianni - Staff to note - discussion for decision making on 14 th - staff to provide additional information would be helpful. Thanks to staff for presentation. Will move this forward to 12 th for open session and 14 th for decision-making.

The COW then went in-camera.