One of three councillors, who voted against a new seven-year deal for private waste collection in Hamilton, suggests the city got “whacked” on the cost due to the “lack of competition” in the region.
“Lack of competition is all,” Ward 12 councillor Lloyd Ferguson told Global News. “It’s driven because they don’t have competition and its because the big guys have bought up all the smaller guys. And now there’s no nobody else left to do this.”
“Every week we have another trend where someone is trying to screw the taxpayer,” Ferguson said.
During a virtual council meeting on Wednesday, the city voted 13-3 in favour of accepting the $23-million contract offered by existing waste collection provider Green For Life (GFL) environmental.
The deal increases the city’s costs for GFL services by about $3 million starting on March 29, 2021 through to April 2, 2028.
The previous deal began in March of 2012 and was set to expire on March 28, 2021.
Under the new contract, GFL will continue to collect blue box recycling for the entire city, while collecting garbage on the Mountain and within the former suburban municipalities.
All other garbage, green bin, leaf and yard waste and bulk waste will be collected by city services.
The city only had a pair of bids for a collection contract over the next seven years, according to a staff report, with the second bid from Emterra Environmental at a projected contract price of about $36.5M, according to a staff report.
The report said there were “a variety of reasons” for the increase but did not specifically list them. It also says the cost increase does reflect what staff are seeing in other nearby markets.
During council deliberations, Ferguson was one of several councillors that asked the city’s director of environmental services about the possibility of bringing the services back ‘in-house.’
Craig Murdoch told councillors city staff did hire a consultant to estimate costs by comparing expenses of existing city-led routes to the area currently covered by GFL.
“The result of that was if we bring it in-house, and for a variety of reasons, we are more expensive than this bid,” said Murdoch.
Staff estimated the cost to be about $33 million, not including the cost of dealing with their existing waste facilities which are at capacity for current city-led collections.
Murdoch said there are also other ‘risks’ with bringing the services back in-house including the requisition of new trucks, paying higher wages for city workers, and the burden of taking on more administrative work.
“We would likely need direction from council to negotiate with the current contractor to extend their contract in order for us to give the time to report back to council,” said Murdoch.
Ward 8 councillor John-Paul Danko said he was disappointed that there was never a study on a proposed move to bi-weekly garbage pickup, which he suggested in November.
“Unfortunately, we’ll never know if or what significant savings for taxpayers could have been achieved. But I am happy with the contract that staff were able to get,” said Danko.
Other councillors that voted in favour of the new contract did so with some reservation.
Ward 1 councillor Maureen Wilson called acceptance of the contract “a very regrettable situation” while Ward 14’s Terry Whitehead described it as “hard to swallow.”
The city’s report says the 15 per cent increase in Hamilton is on the lower end compared to recent contracts signed by other Ontario municipalities.
The study says both London, Ont., and the Niagara Region endured significant waste collection increases in their new deals. Niagara had to endure a 36 per cent increase to bring on GFL and Miller Waste Systems Inc. when it’s deal with Emterra ended in late 2019
London’s contract increased by 20 per cent when signing a four-year deal with Miller in the summer of 2019.
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