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Although there was some opposition, a majority of the members of North Bay City Council voted in favour of bringing the operations of the City-owned Merrick Landfill in-house, as of January 1, 2022.
A proposal and business plan presented by Senior Environment and Facilities Engineer Karin Pratte at the committee level two weeks ago formed the basis for allowing the contract currently fulfilled by Bruman Construction — including compaction of waste, management and maintenance of daily and final covers, maintenance and repair of access roads and litter control — to lapse when it expires at the end of this year.
See original story: City clearing a path to switch to in-house landfill operations
In addition to Pratte, the proposal is supported by CAO David Euler, CFO Margaret Karpenko, Director of Public Works Domenic Schiavone, and Chief Human Resources and Information Officer Lea Janisse, who formed the review committee that put the Merrick proposal together.
And, now, it has been supported by a majority of Council, by a margin of 8-3, with Councillors Mark King, George Maroosis and Marcus Tignanelli voting against.
Coun. Chris Mayne, also chair of Council's infrastructure and operations committee, voted in favour and led off the discussion saying he is "pleased to see operations coming in-house. We're optimistic to be saving $180,000–$200,000 per year for the next number of years to be put toward our next landfill."
Also in support, Coun. Mac Bain noted he is "glad that staff has thought outside the box. The team has done its due diligence. We're going to control our own landfill. We're not going to contract it out to someone else. If there is going to be an issue, we're going to own it."
The City's plan for Merrick will require "substantial capital investment," according to Pratte, including the purchase of several pieces of heavy equipment items, such as a landfill compactor, loader, bulldozer, three-quarter-ton pickup truck. The compactor alone is estimated to cost more than $1 million, with the total for the equipment coming in at approximately $1.85 million.
As he did when the business plan with capital expenditures was missing from the initial report and only introduced in the midst of the committee meeting two weeks ago, Tignanelli questioned the timing and pressure placed on Council to make an immediate decision on the matter.
"Where is the harm in going and getting more data and more information and getting an actual price from the private sector?" he asked. "And, you know what, if that price comes back and it says the City can operate it better, then we'll stay with the City."
Tignanelli added, "At this point, we're acting like know-it-alls with the answers and we don't have the other side of the story. Until we do, I don't think it's a prudent decision"
The City will use landfill and fleet reserves to cover the equipment purchases, then replace the reserves with the annual savings achieved by taking over the landfill operations. Those reserves are forecasted to be replenished by 2027. Subsequent operational savings would then go toward funding the City's landfill expansion.
Maroosis acknowledged Tignanelli's stance and echoed his sentiments about being "painted into a corner." He also said he doubts the plan will save money in the long run but did believe it was possible the operation of the site would improve.
"Financially, it doesn't add up because we're going to be taking a lot of money out of reserves [for equipment purchase]," he said. Maroosis added a discussion with a senior staff member confirmed the plan is based on control of the asset, not the financial particulars. "That's not what we were sold on in this report."
Maroosis noted Bruman is already working under an extension of their contract. "I don't remember hearing that. That was something I learned. Why don't we get an extension with Bruman, I'm sure they'll give us one, they gave us one before. Why don't we RFP it? If we want a better quality landfill site, let's put that in the rules and let the private sector bid and let the inside City staff bid. Bring it to us and compare it."
The proposal anticipates a $1.12 million overall annual operating budget for the landfill and average annual savings of $180,000 realized by keeping the work in-house, including the creation of positions for City of North Bay employees, instead of employing a contractor.
Similar to Maroosis, King also feels excluding the private sector from the process is a mistake. He told the members he spoke with the management of E&E Seegmiller, the owners of Bruman, about the proposal and "they were prepared to renegotiate an extension. This would be the second extension if Council approves it."
King asked, "What signal are we sending to the business community when we stop the tender process?" before adding "the opportunity should be given to the private sector to at least quote against the City's proposal."
The in-house proposal recognizes an opportunity for savings but is driven by improved maintenance and sustainability of the City's own asset, something Coun. Scott Robertson stressed in support. "The key point is protecting one of our most important public assets. The auditor always points out it's a financial liability lurking in the background."
A similar in-house model was adopted at the City’s water and wastewater facilities a number of years ago.
"We took over the wastewater treatment plant, we operate the water treatment plant, we operate our most important assets," said Deputy Mayor Tanya Vrebosch, noting the importance of building reserves for a future landfill that will "cost us way more than we could put into a budget. We need to start planning now.
"It's going to cost a little bit up front but it will have those savings in the long run."
