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Severe ambiguity in the green bin contract about how much it would cost taxpayers to cancel the agreement led city staff to recommend a new deal with Orgaworld, a confidential memo suggests.
The memo, sent to council from the legal department this week and seen by this newspaper, says the city can cancel the contract by giving Orgaworld a one-year notice and making a termination payment, but the amount that would be owed to Orgaworld could vary by tens of millions of dollars, depending how the contract is interpreted.
The city simply couldn’t guarantee the cost to taxpayers for cancelling the contract. It looks like it could cost between $8 million and $10 million if the contract was cancelled in 2015, but Orgaworld has suggested it would be between $56 million and $71 million. The contract has a formula and chart that have different termination payments. The chart, which has the higher payments, was actually drafted by a city operational manager at the time and sent to Orgaworld, the memo says.
That revelation baffled an external lawyer from the firm Caza Saikaley hired in 2014 to give the city the straight goods on the legal impacts of cancelling the Orgaworld contract. The external lawyer describes “disturbing facts,” and he even interviewed former city staff in an attempt to get answers, according to his written legal opinion of the matter that’s attached to the confidential memo.
Instead of trying to cancel the Orgaworld contract, the city is recommending a revised deal that would have homeowners pay more for green bin service but would allow plastic bags and dog waste to be put into the bin by mid-2019. The city hopes that having the option to use plastic bags will convince more people to use the green bin. The changes would cost the city an extra $626,000 annually, which means 15 cents more each month for the average homeowner. The 80,000-tonne “put or pay” requirement, which the city has never “put,” would be decreased to 75,000 tonnes.
Coun. David Chernushenko said the proposed deal would produce a “net positive” for taxpayers in the long-term, since more waste would be diverted from the Trail Road dump and the city wouldn’t be making payments to Orgaworld for capacity it can’t fill at the processing facility on Hawthorne Road.
The prospect of more legal wrangling with Orgaworld over a cancelled contract is also unappealing for the city.
Arbitration over leaf and yard waste was originally scheduled to happen over two to three weeks, but it ended up lasting 72 days at a cost to taxpayers of $2.2 million, plus another $100,000 tied to the subsequent appeals. Orgaworld’s appeal is still active.
The city has an outstanding dispute regarding the size of the Orgaworld plant, which is contracted to have a capacity of 100,000 tonnes per year. The city claims the company didn’t build a facility that big, impacting the quality of compost and the company’s ability to accept peak-period volumes of organics. If the city wins that dispute, it might be able to cancel the contract without paying Orgaworld another nickel. The problem is, the city could pay between $500,000 and $1 million to fight Orgaworld in another bitter round of arbitration, and even that estimate could be low, judging by what happened with the leaf and yard waste arbitration.
Cancelling the contract was one option after a scathing 2014 audit of the green bin program. The city could also find another organics processor or build its own organics processing plant. Scrapping the organics recycling program entirely could be pointless if the province tightens waste rules and bans organics from landfills by 2022.
Orgaworld and the city signed the contract in March 2008. The 20-year agreement started April 1, 2010 and it ends March 31, 2030.
The city is still trying to get thousands of homeowners to embrace the green bin program. About 51 per cent of residents use the green bin, according to the city. The “yuck factor” of dumping kitchen slop into a container or paper bag is apparently too gross for others to handle, going by what city staff have learned while running the organics program. Letting residents use plastic bags for organics could be a difference-maker. The plastics would be stripped out of the organics stream and sent to the municipal dump.
Duncan Bury of Waste Watch Ottawa is skeptical of allowing non-compostable plastic bags to be mixed with the organic waste.
“That’s a bit of a surprise, and frankly, a step backward,” Bury said, calling the move an “over-reaction to the yuck factor.”
Bury said he’s not convinced that allowing plastic bags will be a tipping point for more homeowners to use their green bins. He also worries about Orgaworld’s ability to keep up with the amount of plastics that will come through the door.
“The danger is Orgaworld gets stuck with residual plastic they can’t handle or separate and it degrades the quality of the compost,” Bury said.
The proposed changes still wouldn’t allow diapers, sanitary products and coffee pods to be disposed in the green bin.
Chernushenko believes that allowing plastic bags in the green bin would attract more people to organics recycling, even those who live in multi-unit buildings.
“Is it perfect? It’s just a big step forward,” Chernushenko said.
Orgaworld Canada GM Michael Leopold said the company is waiting until after city council considers the proposal to comment.
The environment committee will consider the staff-recommended deal Monday before sending it to council for a decision on March 28.
Annual organics sent to Orgaworld by the City of Ottawa since the green bin program was implemented in 2010
2010: 53,349 tonnes
2011: 55,063 tonnes
2012: 55,423 tonnes
2013*: 69,403 tonnes
2014: 75,076 tonnes
2015: 76,396 tonnes
2016: 70,918 tonnes
2017: 77,461 tonnes
* First full year of biweekly garbage collection
jwilling@postmedia.com
twitter.com/JonathanWilling
查看原文...
The memo, sent to council from the legal department this week and seen by this newspaper, says the city can cancel the contract by giving Orgaworld a one-year notice and making a termination payment, but the amount that would be owed to Orgaworld could vary by tens of millions of dollars, depending how the contract is interpreted.
The city simply couldn’t guarantee the cost to taxpayers for cancelling the contract. It looks like it could cost between $8 million and $10 million if the contract was cancelled in 2015, but Orgaworld has suggested it would be between $56 million and $71 million. The contract has a formula and chart that have different termination payments. The chart, which has the higher payments, was actually drafted by a city operational manager at the time and sent to Orgaworld, the memo says.
That revelation baffled an external lawyer from the firm Caza Saikaley hired in 2014 to give the city the straight goods on the legal impacts of cancelling the Orgaworld contract. The external lawyer describes “disturbing facts,” and he even interviewed former city staff in an attempt to get answers, according to his written legal opinion of the matter that’s attached to the confidential memo.
Instead of trying to cancel the Orgaworld contract, the city is recommending a revised deal that would have homeowners pay more for green bin service but would allow plastic bags and dog waste to be put into the bin by mid-2019. The city hopes that having the option to use plastic bags will convince more people to use the green bin. The changes would cost the city an extra $626,000 annually, which means 15 cents more each month for the average homeowner. The 80,000-tonne “put or pay” requirement, which the city has never “put,” would be decreased to 75,000 tonnes.
Coun. David Chernushenko said the proposed deal would produce a “net positive” for taxpayers in the long-term, since more waste would be diverted from the Trail Road dump and the city wouldn’t be making payments to Orgaworld for capacity it can’t fill at the processing facility on Hawthorne Road.
The prospect of more legal wrangling with Orgaworld over a cancelled contract is also unappealing for the city.
Arbitration over leaf and yard waste was originally scheduled to happen over two to three weeks, but it ended up lasting 72 days at a cost to taxpayers of $2.2 million, plus another $100,000 tied to the subsequent appeals. Orgaworld’s appeal is still active.
The city has an outstanding dispute regarding the size of the Orgaworld plant, which is contracted to have a capacity of 100,000 tonnes per year. The city claims the company didn’t build a facility that big, impacting the quality of compost and the company’s ability to accept peak-period volumes of organics. If the city wins that dispute, it might be able to cancel the contract without paying Orgaworld another nickel. The problem is, the city could pay between $500,000 and $1 million to fight Orgaworld in another bitter round of arbitration, and even that estimate could be low, judging by what happened with the leaf and yard waste arbitration.
Cancelling the contract was one option after a scathing 2014 audit of the green bin program. The city could also find another organics processor or build its own organics processing plant. Scrapping the organics recycling program entirely could be pointless if the province tightens waste rules and bans organics from landfills by 2022.
Orgaworld and the city signed the contract in March 2008. The 20-year agreement started April 1, 2010 and it ends March 31, 2030.
The city is still trying to get thousands of homeowners to embrace the green bin program. About 51 per cent of residents use the green bin, according to the city. The “yuck factor” of dumping kitchen slop into a container or paper bag is apparently too gross for others to handle, going by what city staff have learned while running the organics program. Letting residents use plastic bags for organics could be a difference-maker. The plastics would be stripped out of the organics stream and sent to the municipal dump.
Duncan Bury of Waste Watch Ottawa is skeptical of allowing non-compostable plastic bags to be mixed with the organic waste.
“That’s a bit of a surprise, and frankly, a step backward,” Bury said, calling the move an “over-reaction to the yuck factor.”
Bury said he’s not convinced that allowing plastic bags will be a tipping point for more homeowners to use their green bins. He also worries about Orgaworld’s ability to keep up with the amount of plastics that will come through the door.
“The danger is Orgaworld gets stuck with residual plastic they can’t handle or separate and it degrades the quality of the compost,” Bury said.
The proposed changes still wouldn’t allow diapers, sanitary products and coffee pods to be disposed in the green bin.
Chernushenko believes that allowing plastic bags in the green bin would attract more people to organics recycling, even those who live in multi-unit buildings.
“Is it perfect? It’s just a big step forward,” Chernushenko said.
Orgaworld Canada GM Michael Leopold said the company is waiting until after city council considers the proposal to comment.
The environment committee will consider the staff-recommended deal Monday before sending it to council for a decision on March 28.
Annual organics sent to Orgaworld by the City of Ottawa since the green bin program was implemented in 2010
2010: 53,349 tonnes
2011: 55,063 tonnes
2012: 55,423 tonnes
2013*: 69,403 tonnes
2014: 75,076 tonnes
2015: 76,396 tonnes
2016: 70,918 tonnes
2017: 77,461 tonnes
* First full year of biweekly garbage collection
jwilling@postmedia.com
twitter.com/JonathanWilling
查看原文...
