North Bay City Council will soon vote on moving the operation of the Merrick Landfill internally following a presentation by the City of North Bay to Council's Infrastructure and Operations committee.
A poll of the committee members revealed majority support to move the matter forward to a future council meeting during a special committee meeting, Tuesday.
See original story: City clearing a path to switch to in-house landfill operations
A staff report and business plan were presented by Senior Environment and Facilities Engineer Karin Pratte. In addition to Pratte, other City senior staff, including CAO David Euler, CFO Margaret Karpenko, Director of Public Works Domenic Schiavone, and Chief Human Resources and Information Officer Lea Janisse formed the review committee that put the Merrick proposal together.
Pratte noted in the report and subsequent presentation the switch will require "substantial capital investment," 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 new (and one lightly used bulldozer) equipment coming in at approximately $1.85 million.
The City's plan is to 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.
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, instead of employing a contractor. The in-house proposal recognizes an opportunity for savings, plus improved maintenance and sustainability. A similar in-house model was adopted at the City’s water and wastewater facilities a number of years ago.
"I think you guys have done a great job with this," said Deputy Mayor Tanya Vrebosch. "A lot of time people think taking outsourcing to in-house is more expensive...Bruman has done a great job but I think what you have presented shows we can look after it a little bit better."
Coun. Mac Bain asked Pratte how much time was needed to secure the purchase of the compactor. Pratte acknowledged it was a six-month process and a decision on the proposal was needed "relatively quickly."
Several North Bay city councillors scrutinized the financial particulars and timing of the proposal that would see the City take over operations to begin 2022. There were some reservations among committee members.
Coun. Marcus Tignanelli lamented the committee was not being presented with much in the way of options due to tight deadlines and wondered if it made sense to issue a request for quotes for the work now that the City had presented its business plan.
"Maybe there are operators out there who believe they could offer a better price than you are proposing tonight?" asked Tignanelli.
Karpenko responded the City would have to make a bid in this process and its in-house experts would be prevented from evaluating other bids due to their involvement in the City's bid.
"The City would have to put a proposal in against the RFQ, given that our data is now out there," Karpenko added. "It could be quite competitive. We would have had to do that before we presented tonight."
Tignanelli followed up, asking why "Council had been pigeonholed into this? It doesn't sound like we really have an option."
The City's Schiavone answered, "Given the time frames for the equipment purchases, it's certainly at Council's discretion whether or not they wish to support this initiative. The process would have to be, given the timelines and the turnaround to get that equipment, if the decision was made, it would have to be whether or not to support us going forward. If Council chose not to support this, it would go out to public tender."
Schiavone added the timelines would not allow for multiple options. To take over from Bruman the first of the year, there would not be enough time to go to public tender and approve the City's proposal.
Tignanelli noted, "It's frustrating being on this side and hearing 'This is your option. You kind of have to make the decision right now.' It would have been nice to see a great report with another option."
Euler interjected in response to Tignanelli, offering, "Our group struggled a little bit with this as well. We were obviously pressured in terms of timelines on how quickly it would be required to order the materials. Margaret and the purchasing team did go back and review the prices when we did have a competitive bid last time and Bruman was significantly more competitive than anyone else."
Euler summed up with, "The decision would be to bring it in-house or go out to tender. Unfortunately, we couldn't bring you both because of the time frame."
The size and cost of the compactor piqued the interest of Coun. Mark King, who wondered whether the equipment was equal to the compactor currently employed by the contractor.
Schiavone observed fleet staff had done its due diligence with the equipment pricing and it was all comparable. Later, Schiavone indicated an agreement with the supplier would see a replacement piece of equipment delivered if any mechanical failure occurred.
Coun. George Maroosis, who along with King and Tignanelli voted against moving the landfill proposal forward, noted the purchase of the equipment and its depreciation over time concerned him.
"Even if you tell me it's coming from our fleet [reserves], it's still coming out of the same pocket — the taxpayer," he said. "The only upside to me is it's going to be in-house and we're going to manage a valuable asset better than the private contractor. I'm not convinced we're going to do it cheaper."
Merrick Landfill has been using a combination of contractor and City personnel for its operation model since it opened in 1994. The City manages the site operator contract, controls access to the site and operates the weigh scale, leachate treatment, landfill gas collection, ground water and surface water sampling.
The latest operator contract with Bruman, which includes compaction of waste, management and maintenance of daily and final covers, maintenance and repair of access roads and litter control, is for a term of six years and is set to expire December 31.
