Item - 2017.PW22.3

The Public Works and Infrastructure Committee recommends that:

1. City Council authorize the General Manager, Solid Waste Management Services to negotiate and enter into a new non-competitive agreement with Rehrig Pacific Company (Rehrig) for the supply of new bins and maintenance of the existing recycling and garbage bins for a five (5) year term from December 1, 2017 to November 30, 2022 with the option to renew and extend the term of the agreement for five (5) additional one (1) year periods at the sole discretion of the General Manager, Solid Waste Management Services, all on terms and conditions satisfactory to the General Manager, Solid Waste Management Services and in a form satisfactory to the City Solicitor.

2. City Council authorize the commitment of currently approved Capital Plan Estimates in the amount of $15,111,000 net of HST recoveries and as outlined in Table 1, Column B of the report (May 24, 2017) from the General Manager, Solid Waste Management Services and the Director, Purchasing and Materials Management.

The purpose of this report is to provide background on the current recycling and garbage bin manufacturing, supply and maintenance contract (maintenance) and to request authority to enter into a new non-competitive contract with the existing service provider Rehrig Pacific Company (Rehrig). The new contract will be for a period of up to five (5) years commencing on December 1, 2017 until November 30, 2022, with the option to renew the contract for up to five (5) additional years to be exercised on an annual basis at the discretion of the General Manager, Solid Waste Management Services.

The original contract projected a 10 year lifespan for these containers.  Nearing the end of the 10 years, it has been determined that these bins are still in good condition with, (based on breakage trend analysis) an estimated 10 more years of life.  The current recycling and garbage bins have proven to be durable resulting in minimal replacements caused by damages.

By adopting the recommendations, Council will be approving a new contract, which essentially extends the existing service and materials supply contract with a series of additional benefits, including:

- Maintaining the current high level of customer service by having one service provider responsible for all the recycling, garbage and green bins
- Preferred customer pricing model realizing savings to the City
- Maintaining the warranty on bins at no additional cost to the City
- Capital cost avoidance of approximately $21 Million associated with extending the life of the current bins for another 10 years versus City-wide replacement
 

Should Council not decide to proceed with this approach, it could result in the following negative potential consequences:

- Customer service impacts resulting from potentially more than one company performing bin maintenance and repair services
- Increased administrative requirements to the City if two separate bin providers were involved
- Current bin warranties and replacement parts may not be maintained without significant additional costs to the City
 

Over the next 5 plus years, staff will continue to monitor bin condition and at any point, should it be determined that the cost to repair and maintain is reaching a point where a full pull and replace with new containers is appropriate, staff will at this point initiate a new competitive process to replace bins across the City.

City Council approval is required in accordance with Toronto Municipal Code, Chapter 71 Financial Control 71-11A as the total estimated contractual commitment in this report is $47,149,413 net of HST. In order to facilitate this contract, this report also recommends committing additional cash flows which are part of the existing 2018 to 2026 Capital Plan adopted by Council on December 13, 2016, as well as an anticipated reduced annual operating burden of approximately $300,000 each year for the term of the contract based on the 2018 budget forecast.