Key messages from City staff report

“Curbside Waste Collection Services Review: Comparison of Curbside Waste Collection Services East and West of Yonge Street” September 2015

“An independent financial analysis verification of the analysis was conducted by Ernst & Young LLP…” – page 1
“The analysis indicates that the current service delivery approach provides a competitive environment that is effective in terms of costs and performance.” – page 1
“…the best value and lowest risk to the City of Toronto at this time is to continue with the current model.” – page 1
“productivity improvements for in-­‐house collection” – page 1
“A blend of in-­‐house and private sector service provision also manages operational financial risk and provides flexibility for the curbside waste collection system to adapt to changes.” – page 1
“The mix of service providers has been in place since August 2012…” – page 5
“The comparison indicates that Districts 1 and 4 costs per stop and per tonne are competitive, with in-­‐house costs being lower.” – page 8
“…this illustrates that the public and private sectors can be competitive.” – page 9
“Procurement costs for issuing and awarding an outside contract have not been included in the analysis.” – page 13
“Remaining with the current cost collection model for an additional two years represents the best course of action at this time based on the analysis that was undertaken. This timeframe will allow for continued data collection for informed decision making while introducing further efficiencies into the curbside collection system. This approach assures the best value for the City over the next two years by focusing efforts on efficiencies to reduce costs rather than incurring the associated costs, time and effort to undertake a procurement process and redeploy staff.” – Page 14
“Any decision to further contract out curbside collection services would incur costs and require time to implement following City Council approval.” – page 15
(RE: contracting out) “…an implementation cost in the order of $1.5 to $2.0 million.” – page 16
View Full Report

Key messages from Ernst & Young LLP

“Independent Review on the Contracting Out of Curbside Collection (District 3&4)” September 2015

“…the average and high scenario’s do not show any savings.” – page 3
“…it should also be noted that future contract prices are not guaranteed and the reduction of in-­‐house collection services could negatively impact the City’s ability to keep prices competitive…” – page 3
“Based on the (Solid Waste Management) analysis and the high cost of re-­‐deployment of staff (which appear to be high), contracting out Districts 3 and 4 together would not make economic sense at this time.” – page 18
“Disadvantages (of contracting out):
  • Once fully contracted out, it would be difficult for the City to re-­‐establish in-­house curbside collection;
  • The City may have less control over discipline or service quality of Contractors.This may impact safety, quality and environmental/sustainable actions of the Company;
  • Service quality ranges from contractor to contractor which is difficult to monitor or execute disciplinary actions on drivers; and
  • Risk of total loss of service if one of the contractors either shuts down or is their licence is removed. GFL, as an example was downgraded in their CVOR rating which, if they didn’t satisfy future requirements, would not be able to operate.” – page 19
“The City should also consider the balance between in-­‐house and outside contractors to maintain a competitive tension with the service providers.” – page 20
“…the sustainability of outside contractor pricing is an issue to be considered. It is not uncommon for private sector companies to put in low ball bids in an attempt to gain market share.” – page 20
“…EY supports the (Solid Waste Management) recommendation to defer the decision with respect to contracting out, based on the assumption that a review of the implementation of service efficiencies suggested by (Solid Waste Management) and the additional analysis will be undertaken.” – page 21
View Full Report