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City overestimating garbage savings, group says - Toronto Star

May 9th, 2011
David Rider
Urban Affairs Bureau Chief
Toronto Star

The City of Toronto is overestimating potential savings from increased contracting out of garbage collection and risks missing recycling targets, argues a report to be released Monday.

“It’s unclear why city staff lowballed (contract) monitoring costs, therefore suggesting higher potential savings from privatization,” says Franz Hartmann, executive director of Toronto Environmental Alliance, in the report “Look Before You Leap” obtained by the Star.

“Councillors have incomplete, if not inaccurate, information about the potential costs and savings that would come from privatizing waste collection.”

Late last month, the public works committee voted in favour of staff recommendations to contract out residential curbside garbage and recycling collection from Etobicoke’s eastern border to Yonge St.

At its May 17-18 meeting, in what is certain to be raucous debate, city council will have the final say on a privatization plan that Geoff Rathbone, the departing manager of solid waste management, says will save taxpayers $8 million a year — $6 million of it from outsourcing curbside collection.

Rathbone’s report estimates contracting out would cut the city's curbside collection costs in that district by $7 million, to $23,721,000. One million dollars of that savings, or 4.2 per cent of the contract, would be spent on supervision, administration and “compliance and oversight” of the contract.

However, TEA argues that 4.2 per cent isn’t nearly enough.

“Academic studies show governments should spend about 20% of the cost of a private contract to properly monitor the company and ensure it delivers the promised services,” the environmental group argues.

“The only way to achieve the level of savings claimed is by cutting down on monitoring costs, and that could put our services at risk.” Problems with contract language, monitoring and enforcement have led to compromised waste diversion in other cities, TEA adds.

In his report, Rathbone states the city’s efforts to divert 70 per cent of waste from landfill “will not be impacted or delayed by contracting out.”

The current private provision of curbside pickup in Etobicoke hasn’t hurt Toronto’s recycling and green bin efforts, he states, and “a contractor will be expected to fulfill any and all existing or future diversion program requirements.”

Hartmann will also say it’s “unclear what to make of the fact that Mr. Rathbone ... is departing to work for a private company that may benefit from privatization.”

The city announced Friday that Rathbone is leaving to become a vice-president at Progressive Waste Solutions (formerly BFI Canada).

Rathbone told the Star on Friday he notified the city’s integrity commissioner when he learned last week he would be offered the job, and has ceased work on the privatization file.

Councillor Denzil Minnan-Wong has said a fairness commissioner would be hired to oversee the contracting out process, eliminating the possibility Rathbone would give Progressive an unfair advantage in winning it.

Neither Rathbone nor Minnan-Wong could be reached Sunday evening to respond to TEA’s report raising questions about the budget to monitor the curbside collection contract.

As originally published here: http://www.thestar.com/news/article/987909--city-overestimating-garbage-savings-group-says

2011-05-09 City overestimating garbage savings, group says _Toronto Star_.pdf18.67 KB