Privatizing Toronto’s trash collection

City moves closer to contracting out garbage service
Kris Scheuer
(Written for Town Crier April 26.)

Toronto's Public Works Committee has voted to push ahead with Mayor Rob Ford's plan to contract out garbage collection west of Yonge St. Photo by Dan Hoddinott and Illustration by Shadi Raoufi/Town Crier.

The city has moved closer to contracting out residential trash collection west of Yonge Street.
Despite every resident or group who presented to the Public Works Committee during the nine hour proceeding speaking against the idea, councillors voted 4–2 to put garbage collection out to tender along with cleaning up parks and litter vacuuming of all the city’s streets.
Public works committee chair Denzil Minnan-Wong told the media privatization will reduce the size and cost of government.
“It will save us over the life of contract – $60 million,” he said.
City staff recommended the city seek bids for contracts of between five to nine years that could cost the city about $250 million. It will also reduce the city’s workforce by at least 300 jobs and save the city about $8 million a year, according to the report.
Contracting out curbside waste collection west of Yonge Street for up to nine years would be worth between $200–300 million according to what Geoff Rathbone, general manager of the solid waste management told the committee.
A seven to nine year contract for litter and recycling collection in city parks would be worth about $30 million. A five year contract to operate mechanical litter vacuums would be worth less than $20 million as would a contingency contract to pick-up residential garbage citywide (in the event of a public contract disruption).

 However, not everyone agrees that this is a good idea.
Mark Ferguson president of CUPE 416, who represents garbage collection workers, said after the vote, “this is a demonstration they are prepared to contract out based on ideology and not facts.”
More than 70 people signed up to speak to councillors bemoaning the loss of good paying city jobs and casting doubts on the projected $8 million in yearly savings.
Many also raised questions about the true costs and that the city actually saved $4 million by giving garbage pick-up in York to city employees after it was previously privatized.
Councillor Perks told the Town Crier he doesn’t buy it.
“This will not save the city money,” he said. “You pay for workers, trucks and disposing of it (garbage) at the end.”
Perks said that the price for disposal is fixed no matter who does it and the trucks are cheaper for the city to buy so wages and benefits are the only potential savings, including possibly not paying workers who are injured or sick.
He also insists that because of increased legal fees, a fairness monitor and more careful scrutiny required with the private sector will also add to the cost.
“Those costs of monitoring and costs of the (private sector) profit are larger than the savings you get cutting workers wages and benefits,” said Perks.
The next step is for city council to vote May 17 on whether to send these contracts out for requests for quotations. However, it may be the last time that City Council has a say as city staff recommends the final decision on the winning bid go to the Bid Committee.
The Bid Committee is made up of the city manager, chief financial officer, the committee’s clerk and department heads but no elected officials. Normally the Bid Committee doesn’t approve contracts over $20 million or for a term of more than five years, but a staff report recommends bypassing that policy to speed up the decision and save money sooner.
“Postponing the award of contracts will delay the significant savings the city can anticipate,” states the report.
The report recommends contracting out beginning in spring or summer 2012 and each month the decision is delayed will mean the city will lose $600,000 in projected monthly savings.
Perks is concerned about the private sector bids not coming to council for scrutiny.
“All they are telling us is it will be some kind of garbage pick-up and it will be cheaper than what we have now,” Perks said. “We are being asked to spend a quarter of a billion with only that information, which is a violation of city bylaws.”
Unless council votes otherwise, the qualifying requests for quotations will come to directly to the bid committee in September for a vote on the winning bid.

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3 responses to “Privatizing Toronto’s trash collection

  1. Clifford J. Layne

    Cannot speak in regards to the motivation, whether business or personal, why Mr. Ford wants the final decision to be made at the committee level. Perhaps it is political to deflect from the situation, perhaps it is a business decision. I do not know Mr. Ford well enough to offer an opinion on that.
    However, I do know that Mr. Ford is a businessman first, a politician second. He understands profit and loss and he has an excellent business acumen. If I were the Mayor, I would make the identical business decision. The entire council should decide on the “principle” of privatization, not on the details. The committee and staff should decide on the details; that’s good business.
    In regards to the lower costs of returning York to municipal pick-up vs. private, I don’t have the detailed numbers for that and audited numbers would never be available to myself or any other taxpayer. With audited numbers, I would be able to review them and tell whether the numbers actually captured all of the real costs. So, I offer no opinion on that subject.
    As far as an agreement for the city to meet with CUPE four times a year since the 2009 strike was settled, to discuss how to lower costs; if they have not met with Mr. Ford, then I will simply assume that he wishes to look at other alternatives first and that he simply may not be honouring an agreement put together by Mr. Miller – that’s politics.
    We are only talking collection here, nothing else. The city will still use and man all of the sorting stations that it currently does. The city will still contract out the trucking of the garbage to London. The dumping fees in London will still be the same as now. That means there are no savings per year there.
    Whether it is the cities trucks or private trucks used, someone will still have to drive the trucks, buy the trucks and fuel and maintain the trucks. So that means that the only place where any money can be saved is on the labour paid to pick-up the garbage.
    If the private firm pays their employees a wage equal to the city wage, with benefits equal to the city benefits, then garbage pick-up will never be privatized. If private contractors pay less than the city, then there is a chance that their bids will lower costs. That means that either private enterprise does not pay their employees enough money or the city pays their employees too much. I go for the latter. You have city employees currently making equal money to what I made as a company General Manager and with better benefits and a private pension.
    If Mark Ferguson really wanted the unions to save the city money, then they should give back all those hard fought for increases from 2009.

  2. Clifford J. Layne

    Nothing is a done deal yet, they have just voted to look at it. If you don’t send out RFQ’s, you don’t get bids and without bids, you cannot compare it against what it currently costs the city. If the union is concerned, then they should do whatever they can to assist the city, first by making sure that the city captures all of the current costs and make sure they agree with those figures AND second – look seriously at assisting the city in lowering their current costs.

    • Cliff, you are right that nothing is a done deal yet. Without sending out the request for quotations they can’t compare it against the current city costs. But one of the issues raised in the article is that it will be the Bid Committee only (no councillors sit on it) that would actually approve a contract and review all bids. The only thing going to council May 17 is whether to indeed send out RFQs but not to see the way the language of the bids or details of the contracts in order to speed up the process and save the city more money sooner. Of course the contracts would have to follow all the current city policies, etc but the staff recommendation thus far (approved by the works committee) is to have only staff on the Bid Committee approve the lowest winning bidder.
      In terms of the union, CUPE 416 president Mark Ferguson has said at press conferences at city hall that I attended that the union has saved the city millions in the past by working with city officials to lower costs. And the union wants to do that again this time but according to Ferguson city officials have refused union requests to do that. Yesterday at the works committee Ferguson said that the current contract (signed after the 2009 garbage strike) includes provision that union reps meet at least 4x a year with city officials including the mayor’s office to work on issues such as lower costs. But Ferguson said the Jan and March meetings with the new mayor and city officials did not happen despite verbal and written requests from the union to do so.
      According to the union and city staff, when Toronto contracted in garbage pick up in the York (after it was privatized) the city saved $4 million by bring that service back in house.

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