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HomeMy WebLinkAboutCS 35-03 C¿ÚI o~ REPORT TO COUNCIL Report Number: CS 35-03 Date: September 1O, 2003 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Solid Waste Management Costs in the City of Pickering Recommendation: It is recommended that Report CS 35-03 .from the Director, Corporate Services & Treasurer be received for information as a supplement to Report DES 28-03. Executive Summary: At its meeting of June 23, 2003 the Finance & Operations Committee of the City of Pickering considered Report OES 28-03 and Recommendations 1, 2, 3, 4c and 5 and referred it back to staff to provide further financial information. At its meeting of July 28, 2003. Council received further information in the form of correspondence from the Chief Administrative Officer, (Attachment 1) and the Director, Operations & Emergency Services and the Director, Corporate Services & Treasurer on this subject. Council reaffirmed their request for information on the Region's costs. Over the summer certain tonnage estimates have been refined and revised by the Division Head, Municipal Property & Engineering resulting in financial estimates for 2004 being slightly higher than those previously provided. It appears that the discussion can be reduced to two simple elements as the costs should be the same or similar with two exceptions: a) The City has been offered an attractive rate by Miller Waste. If the program is undertaken by the Region they must negotiate their own rate which we have been led to understand will probably be higher thereby increasing the cost to the City's taxpayers b) The Chair, Regional Works has advised the Council that should the program be implemented by the Region, costs to the City's taxpayers will be approximately 20 percent higher to cover the Region's overhead. Additionally, the City will lose control over all such costs that it currently has or will have under the new program. This report has been prepared in conjunction with the Director, Operations & Emergency Services and the Division Head, Municipal Property & Engineering. Report CS 35-03 Date: September 10, 2003 Subject: Solid Waste Management Costs in the City of Pickering Page 2 Collection of Or;:lanics (Incremental Costs) Pickering Region Operated Operated Collection 496,000 496,000+ Region costs unknown at this time as dependent Costs upon contract neaotiations bv the Reaion Advertising 50,000 50,000+ City's cost estimated at $2 per household. Reqion unknown at this time. Administration Nil 99,000+ 20% of City's collection costs per Chair, Regional Costs Works Committee Cost of Bins Nil Nil Estimated cost of $500,000 will be funded by Reqion from Solid Waste Mqmt Reserve Fund. Disposal Costs 231.000 231.000 Incurred by the Region regardless of program 777.000 876.000++ ownership The only fixed costs known at this time are those for the City of Pickering as operator of the program. The Region's costs for the operation are unknown at this time but are assumed to be not less than those for the City. The above collection costs for the City have been confirmed on September 9, 2003 by the Chief Administrative Officer and Miller Waste. Financial Implications: Implementation of the new kitchen organics collection program by the City of Pickering will cost an estimated $546,000 in 2004, ($496,000 for collection and $50,000 for first year advertising education and promotions) for a City run program. The increase on the average tax bill for a "City run" organics program based on a $200,000 residential assessment would be $13.25 which is 0.5% on the total tax bill or 1.85% on the City's share of the tax bill. Assuming disposal costs are charged back to Pickering taxpayers, the Region's portion of the tax bill would increase approximately $6 or 0.5% (combined total of $19.25). At the July 28, 2003 Council meeting, we were advised by the Chair, Regional Works Committee that costs would be approximately 20 percent ($99,000) higher, to cover overhead costs, if the program is administered by the Region of Durham. In addition the Region will incur costs of approximately $500,000 financed from the Region's Solid Waste Management Reserve Fund for organic bins to be distributed throughout Pickering and approximately $231,000 for disposal of the organics collected. The increase on the average tax bill for a "Durham Region program" based on (City's cost of $546,000 plus 20% overhead or $99,000 and $231,000 for disposal) would be $23.17 or 1.0% on the total tax bill, or roughly 2.0% on the Durham portion only, assuming these costs are charged back to Pickering taxpayers. Background: The following is provided further to Council's request for financial information regarding the cost of solid waste management in the City of Pickering. It is understood this information was to be a combination of existing costs and projected 2004 costs for Integrated Waste Management Services. Report CS 35-03 Date: September 10, 2003 Subject: Solid Waste Management Costs in the City of Pickering Page 3 City of Pickering 2002 Actual Solid Waste Collection Costs (1) Garbage (2) Yard Waste (2) $1,161,000 $ 271 ,000 ~2.000 (1) Excludes Pilot Project (2) Net of GST Rebate In addition in 2002 the Region of Durham paid approximately $3,083,000 for processing and disposal of the garbage and yard waste and the recyclables. These costs are borne by the taxpayers of the City with $1,432,000 being on the City's portion, and $3,083,000 on the Region's portion, of the tax bill. Therefore, the total cost of solid waste management services in 2002 in the City of Pickering was approximately $4,515,000. The addition of a kitchen organics collection program to provide integrated waste management services would add approximately $496,000, net of GST rebate to the City's costs. Should the Region undertake the program $595,000 ($496,000 plus 20% overhead as per Chair, Regional Works Committee) will be added to the City ratepayer's costs. In addition, almost $231,000 will be added to the Region's costs for composting regardless of who is responsible for collection. Attached are three schedules prepared by the Division Head, Municipal Property & Engineering that layout the costs of collection and disposal of solid waste in Pickering. In order to create a better comparison of costs for the current system versus an integrated system some of the numbers have been revised, hence the original estimate of $428,000 has been revised to $496,000 for collection costs. As per the July 14, 2003 memo to the Chief Administrative Officer from the Director, Operations & Emergency Services and myself on this subject, the addition of a new organics program will cost more no matter which level of government is responsible for it. Based upon the comments of the Chair of the Regional Works Committee the cost under the administration of the Region would be approximately 20 percent more than under the City. As noted in the above-mentioned memo, the future costs for the City ratepayers under a Durham administered program could be substantially higher once the program is fully implemented across the Region and cost sharing is based upon the Regional tax levy. Under such a scenario, based upon the limited information available, Pickering taxpayers absorbing a percentage of the costs of the other participating municipalities would be far greater than those municipalities sharing in a percentage of Pickering's costs. Also the City would lose control over the program and administrative costs to the taxpayer should the program be transferred to the Region. Report CS 35-03 Date: September 10, 2003 Subject: Solid Waste Management Costs in the City of Pickering Page 4 Attachments: 1. Memo from the Chief Administrative Officer to the Mayor and Members of Council dated July 24,2003 2. Current Services Levels for Waste Management Services in the City of Pickering 3. Projected Waste Management Services in the City of Pickering 4. Cost Comparisons by Jurisdiction for Waste Management Services Prepared I Approved I Endorsed By: Prepared I Approved I Endorsed By: fi~ -~, .. Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachments Copy: Chief Administrative Officer Director, Operations & Emergency Division Head, Municipal Property & Engineering Recommended for the consideration of Pickering City Council , ATTACHMENT #...1- TO REPORT #.£:.S..3s ~CJ3 OFFICE OF THE CHIEF ADMINIST~"OYE OFFICER HECEIVED MEMORANDUM CITY OF= PIr.I(r-..~'NG JUL 2 4 2003 July 24, 2003 To: Mayor Arthurs and Members of Council CORPORATE SERVICES From: Thomas J. Quinn Chief Administrative Officer Subject: Regional Integrated Waste Program Miller Waste I City of Pickering Component File: 0-7000-001 This is further to the recent memorandum form the Director, Operations & Emergency Services (dated July 21, 2003). Please be advised that it was Miller Waste who initially recommended that the City establish a possible implementation date of May 1, 2004. Subsequent to further review and discussion, I would like to propose to Council that the implementation .date could actually be scheduled sometime during the period of January 1, 2004 - March 31, 2004 pending certain decisions. If it is Council's desire to move forward on this matter, we will certainly endeavour to expedite this process. Once the City has received approval from Council, the emphasis will clearly be on Miller Waste and the Region of Durham to ensure logistics are in place (Le., site approval, purchase of additional vehicles etc.,). If we were successful in implementing this program effective January 1, 2004 the total cost would be $478,000 [428,000 + 50,000 (for advertising and promotion)], which would have an additional effect on our tax rate of approximately 1.6% - 1.8%. Naturally the 2004 tax rate amount would be pro-rated accordingly should the implementation date be deferred. Please be assured, that whatever date is determined, we will ensure that the 2004 proposed budget is adjusted accordingly. Therefore, I am requesting Council's decision as to how you wish staff to pursue this matter. You may also wish to note that we have included previously distributed correspondence to this package for your reference. I trust this will provide you with sufficient information prior to the Council meeting on Monday, July 28, 2003. "':::'--"'" T JQ:jh Copy: Director, Operations & Emergency Services Director, Corporate Services & Treasurer Division Head, Municipal Property & Engineering City Clerk ATTACHMENT#d.- TO REPORT#Q-dS-O3 Current Service levels for Waste Management Services in the City of Pickering - 2004 Projection using 2002 quantities and 2003 pricing item description of service frequency of service per year estimated no. of description units of units unit price per unit per year total price per year (taxes extra) payment by A WASTE COllECTION A1 garbage/bulky goods 52 21,015 tonnes $51.36 $1,079,330 City A2 organics 52 0 tonnes $0.00 $0 City A3 leaf & yard waste and Christmas trees 25 1,784 tonnes $148.08 $264,175 City A4 metal/electronics/white goods 52 269 tonnes $51.36 $13,816 City A5 blue box recycling 26 25,000 stops $27.32 $683,000 Region Sub-total: waste collection (1) 29,574 tonnes $2,040,321 GST (net of rebate) $61,210 TOTAL: waste collection $2,101,531 B WASTE DISPOSAL 81 garbage/bulky goods daily 21,015 tonnes $84.00 $1,765,260 Region 83 composting of food waste daily 0 tonnes $120.00 $0 Region 84 composting of yard waste/Christmas trees seasonal 1,784 tonnes $84.00 $149,856 Region 85 metal/electronics/white goods daily 269 tonnes $0.00 $0 Miller 86 sorting of recyclable fibres daily 5,205 tonnes $0.00 $0 Region 87 sorting of recyclable containers daily 1,301 tonnes $103.19 $134,250 Region 88 hauling of un-sorted recyclable containers daily 1,301 tonnes $31.00 $40,331 Region Sub-total: waste disposal 29,574 tonnes $2,089,697 GST (net of rebate) $62,691 TOTAL: waste disposal $2,152,388 D Total: integrated waste program $4,253,919 E Assumptions * Tuesday to Friday collection total tonnes based on 2002 collections expanded recycling in effect estimated 25,000 curbside stops * apartment collections not affected contractor is to be Miller Waste Systems composting disposal rate estimated as per Chairman, Regional Works Committee and Miller standard annual inflation & fuel adjustment rates to apply contract term ends March 31,2009 Regional costs for sorting fibres unavailable F Notes (1) Total tonnage includes tonnes collected for recycling provided by the Region (2) Excludes administariton costs or promotion/education costs ,.\lTACHMENT#~ TO REPORT#~~ "'05 Projected Waste Management Services for the City of Pickering for 2004 item description of service frequency of service per year estimated no. of description units of units unit price per unit per year total price per year (taxes extra) payment by A WASTE COLLECTION A1 garbage/bulky goods 52 14,787 tonnes $74.00 $1,094,238 City A2 organics 52 6,228 tonnes $74.00 $460,872 City A3 leaf & yard waste and Christmas trees 25 1,784 tonnes $148.08 $264,175 City A4 metal/electronics/white goods 52 269 tonnes $74.00 $19,906 City A5 blue box recycling 26 25,000 stops $27.32 $683,000 Region Sub-total: waste collection (1) 29,574 tonnes $2,522,191 GST (net of rebate) $75,666 TOTAL: waste collection $2,597,857 B WASTE DISPOSAL 81 garbage/bulky goods daily 14,787 tonnes $84.00 $1,242,108 Region 83 composting of food waste daily 6,228 tonnes $120.00 $747,360 Region 84 composting of yard waste/Christmas trees seasonal 1,784 tonnes $84.00 $149,856 Region 85 metal/electronics/white goods daily 269 tonnes $0.00 $0 Miller 86 sorting of recyclable fibres daily 5,205 tonnes $0.00 $0 Region 87 sorting of recyclable containers daily 1,301 tonnes $103.19 $134,250 Region 88 hauling of un-sorted recyclable containers daily 1,301 tonnes $31.00 $40,331 Region Sub-total: waste disposal 29,574 tonnes $2,313,905 GST (net of rebate) $69,417 TOTAL: waste disDosal $2,383,322 C TOTAL: integrated waste program $4,981,179 D PROMOTION & EDUCATION green bins, liners, paper bags, calendar & delivery once 25,000 stop $20.00 $500,000 Region newspaper & radio advertising and education 4 months LS $50,000 City promotion campaign TOTAL: promotion & education $550,000 E Assumptions Tuesday to Friday collection composting disposal rate estimated as per total tonnes based on 2002 collections Chairman, Regional Works Committee and Miller expanded recycling in effect standard annual inflation & fuel adjustment rates to apply estimated 25,000 curbside stops contract term ends March 31, 2009 apartment collections not affected 50% waste diversion will be achieved contractor is to be Miller Waste Systems Regional costs for sorting fibres unavailable F Notes (1) Total tonna e inciudes tonnes collected for rec clin Cost Comparisons by Jurisdiction for Waste Management Services with collection of organics by the City of Pickering Description of Service City of Pickering Cost Region of Durham Cost Total Current Waste Management Services $1,398,041 $2,855,878 $4,253,919 Integrated Waste Manangement Services $1,894,367 $3,086,812 $4,981,179 Incremental Increased Cost $496,326 $230,934 $727,260 ~ ~ :I: 3: m Z ~ ~ PLUS One Time cost for Start-up of Integrated System in first year only $50,000 $500,000 $550,000 -ì d ;c 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