Status of Organics Facility

November 16, 2009

Healthy Environment

I have received several e-mails recently wondering about the status of the organic processing facility and the recent negotiations to process organic waste from Waterloo using excess capacity at the facility. 

The City signed the contract with Maple Reinders in July to construct the facility.  Demolition and site servicing is happening this fall.  Construction will begin in Spring 2010 as soon as we receive an amended Certificate of Approval under the Environmental Protection Act to, once again, allow us to process organic waste at the Waste Resource Innovation Centre.  We are hoping for a timely response from the Ministry of Environment. 

With respect to the Waterloo contract, the net total cost for processing organic waste was determined to be $114/tonne (net present value; adjusted for inflation; amortization of debt included).  This analysis was completed to evaluate the Waterloo contract.  Our staff have reviewed the business case and terms of the Waterloo agreement and have concluded it benefits Guelph taxpayers as it helps to offset the cost of organic processing.  A recent tender by another community for the processing of their organic stream brought in bids ranging from $107 to 130/tonne showing our processing costs will be competitive with the market place.

Based on current information, the estimated impact on the 2011 tax levy will be $2.456 M or approximately $236/tonne (this includes the processing cost plus capital cost of the new facility).  The City is building a waste processing asset. The cost per tonne will vary in each year of the contract as the highly competitive world of waste management changes.

 Organic Processing Facility Fact Sheet – updated December 2009

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3 Comments on “Status of Organics Facility”

  1. Roy Chappel Says:

    I’m a bit confused about this posting. In the last paragraph of the posting, you state that our costs for processing organic waste will be “approximately $236/tonne”, yet in the paragraph before, you state that a “recent tender by another community for the processing of their organic stream brought in bids ranging from $107 to 130/tonne showing our processing costs will be competitive in the marketplace”. This seems to be completely contradictory, and so I am wondering if you can explain or clarify this further.

    Maybe it would be helpful if you or the City could provide a table which shows (on a year to year basis) how much, based on the projections (which are said to vary each year of the contract?), we will be paying for organic waste disposal every year for say a 10 year period if this facility were to be constructed, compared to what the other communities are going to be paying (based on the bids ranging from $107-130/tonne) based on our research.

    I suspect that this will turn out to be a seriously flawed business decision to build this facility and force tax-payers to pay almost 2.5 times more money to process our organic waste.

  2. kfarbridge Says:

    I appreciate the opportunity to reiterate Council’s commitment to reopening the Organics Processing Facility. I do see the confusion with the posting and I will correct it.

    While we understand that there are individuals who do not agree with reopening this facility, this was a commitment Council made to the community after the 2006 election. We heard clearly the larger community’s wish to re-establish our City’s leadership position with respect to the responsible management of solid waste and that shipping our organic waste to another community for disposal (currently incineration) was not acceptable.

    Processing organic waste does cost more than burying or burning it. It always has in today’s world.

    With respect to the Waterloo contract, our staff have reviewed the business case and terms of the agreement and have concluded that it benefits Guelph taxpayers by offsetting the overall cost of organic processing by taking advantage of the full capacity of the facility. The opportunity to fully utilize the capacity of the facility was discussed when Council approved moving forward with the new processing facility.

    Over the past several decades, the City of Guelph has participated in three unsuccessful landfill searches at a cost of millions of dollars to the taxpayer. There continues to be a severe shortage of waste disposal and processing facilities in the Province and relying on continued cross border shipping of waste for disposal comes with significant risks. We continue to see restrictions on the disposal of organic waste in other jurisdictions and the Province of Ontario is signalling they are moving in that direction.

    Consequently, in addition to being the responsible way to manage our organic waste, the decision to control the management of as much of our own waste as possible is also about mitigating future risk as a community.

  3. Edward Kurys P.Eng MBA Says:

    Cost calculation for the new organic facility.

    I’m not sure I understand the city’s calculation of unit costs for subject facility.

    It seems to me that they have taken an average of the NPV of future costs to come up with the $114.00 figure. Am I reading this right??

    If the foregoing is correct, I hope that the city will allow us to calculate our yearly taxes based on an average of the NPV of future taxes – this will represent a great savings to all tax payers in Guelph – could be as large as 80% depending on how far into the future the calculation is taken.

    I certainly hope that my understanding of the $114.00 calculation is incorrect, for as a citizen of Guelph, I would hope that information provided to the public by the city is presented in a transparent and forthright manner.

    Sincerely

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