Agenda Index City of Vancouver

POLICY REPORT
OTHER

TO: Standing Committee of Council on City Services and Budgets
FROM: General Manager of Engineering Services
SUBJECT: Contracting Out a Portion of the Apartment Recycling Program
 

RECOMMENDATION

COUNCIL POLICY

On February 1,1989, Council established a goal of reducing the City's solid waste stream by 50%.

On January 13, 1993, Council approved, in principle, the Apartment Recycling Program subject to the establishment of the user-fee, cost recovery mechanism known as the Solid Waste Utility.

On May 3, 1994, Council agreed to support the Greater Vancouver Regional Solid Waste Management Plan, which includes apartment recycling programs.

On July 25, 1996, the Standing Committee on Planning & Environment instructed the General Manager of Engineering Services to report back to Council on an option to contract out a portion of the apartment recycling program.

On October 7, 1997, Council approved the implementation of the Solid Waste Utility effective January 1, 1998.

SUMMARY

This report recommends implementing an apartment recycling program, which includes contracting out a portion of the program as per Council's July 25, 1996 policy noted above. The program is designed to provide a similar level of recycling services to residents of apartment buildings as the Blue Box program currently provides to residents of single-family, duplex, and conversion households.

Staff recommend contracting out the portion of the Apartment Recycling Program that consists of dense multi-family neighbourhoods, namely the West End, Downtown, Downtown Eastside, Strathcona, Grandview-Woodlands, Mount Pleasant, Fairview Slopes, and Kitsilano. This contract area accounts for roughly 75% of the City's apartment dwellings.

Further, staff also recommend providing "in-house" apartment recycling services to the remaining, dispersed apartment buildings. This would be accomplished by adding an additional two recycling trucks to the City's exiting 20 truck blue box fleet, which currently services single-family, duplex, and conversion households.

Implementation of the program involves a one-time capital cost $2,556,000 and ongoing annual operating costs of $1,650,000. While the capital expenditure will be funded from the Solid Waste Capital Reserve, the annual operating expenditures will be funded through the Solid Waste Utility, effective January 1, 1999. Apartment recycling user-fees are estimated to be roughly $16/dwelling unit/year. Due to the difficulties of administering a pro rata user-fee system, staff recommend funding 1998's operating costs, estimated to be $400,000, from the Solid Waste Capital Reserve.

The Apartment Recycling Program, as outlined in this report, will be implemented in two phases: The first phase consists of implementing the City portion of the program and is expected to begin July, 1998 and be complete by November, 1998. The second phase consists of implementing the contract portion and is expected to begin July, 1998 and be complete by December, 1998.

PURPOSE

The purpose of this report is to seek Council's approval to contract out a portion of the Apartment Recycling Program and to provide "in-house" apartment recycling services to the remaining portion of the City.

BACKGROUND

Several apartment recycling events and issues have transpired over the last six years, as the following chronology summarizes.

April 14, 1992
Council deferred the implementation of the Apartment Recycling Program pending a public workshop on solid waste and recycling.

October 10, 1992
A public workshop on solid waste and recycling was held.

January 13, 1993
A report was submitted to Council to summarize the workshop and resubmit the recommendations to Council to implement the Apartment Recycling Program as originally submitted on April 14, 1992. Council approved, in principle, the Apartment Recycling Program with specific implementation details to be approved following a report back on a cost recovery, user-fee funding mechanism.

September 12, 1995
Council approved the recommendation to create a Solid Waste Utility to recover the operating costs of all solid waste management programs (including apartment recycling), except street cleaning, litter collection, and abandoned garbage collection.

February, 1996
Council deferred the implementation of the Solid Waste Utility until the City secures the applicable Vancouver Charter amendments from the Provincial government.

July 25, 1996
Engineering Services submitted a report to Council recommending the implementation of the Apartment Recycling Program using "in-house" services, but Council adopted the resolution "THAT the General Manager of Engineering Services report back on an option to contract out a portion of the Apartment Recycling Program."

July 28, 1997
The amendments to the Vancouver Charter were passed by the Provincial Legislature and given Royal Assent.

October 7, 1997
Council approved the Solid Waste Utility for implementation on January 1, 1998.

DISCUSSION

With the recent approval of the Solid Waste Utility, implementation of the Apartment Recycling Program (ARP) can now begin. The following discussion outlines the proposed implementation plan using both private and "in-house" recycling services.

1. Apartment Recycling Program Design

The ARP has been designed to provide recycling services to all Vancouver residential buildings that currently do not receive the City's blue box collection service, which includesroughly 4,500 multi-family buildings, or 120,000 individual apartment dwellings. (Please refer to Appendix "A" for a detailed listing of property types that will be serviced by the ARP.)

This program is expected to provide a similar level of recycling services to apartment buildings as the Blue Box program currently provides to single-family, duplex, and conversion households. To achieve this goal, the program has been designed to include the following parameters:

… voluntary participation, mandatory payment through the Solid Waste Utility;

… weekly collection of three recyclable material categories (old newspapers, mixed paper products, and mixed containers), which are the same as the blue box categories;

… each apartment building will utilize either a blue box (and associated blue and yellow bags) or a "centralized" 360 litre wheeled cart collection system;

… 360 litre wheeled carts systems will be stored in a convenient, centralized location and accessible to all building residents (e.g., underground parking garage);

… in general, apartment buildings with fewer than 7 dwelling units will utilize the blue box system, and all other apartment buildings will utilize the 360 litre wheeled cart system;

… each apartment dwelling will be provided with in-suite recycling containers: (a) a blue box/blue bag/yellow bag for buildings that utilize the blue box system; or (b) a reusable tote bag for buildings that utilize the centralized, 360 litre wheeled cart system; and,

… recycling containers will have to be placed (in the case of blue boxes) or rolled-out (in the case of wheeled carts) to the curbside or some other predetermined collection point on collection day.

As outlined in the following section, apartment recycling collection services will be provided by both private and City forces.

2. Contract Service Area and City Service Area

To promote maximum operating efficiencies -- in terms of cost, service, and flexibility -- the contract and City service areas have been selected with the following goals in mind: (1) the City service area should be limited to existing blue box service areas; (2) the contract servicearea should consist of dense multi-family neighbourhoods; and, (3) recycling truck traffic should be minimized in both service areas. Accordingly, the contract and City service areas shown on the following map have been selected.


The contract service area is bound by the densest multi-family sections of the City and contains roughly 75% of the City's apartment dwellings. The apartment dwellings in this area will be serviced by a private recycling contractor.

Staff expect to solicit bids (for the contract service area only) based on a five year contract with an option to extend for an addition two years upon the mutual consent of both the City and its contractor(s). This will allow contractors to write-down the large capital costs associated with apartment recycling over a longer time-frame, which should result in lower costs to the City. Further, staff expect to break the contract service area into three separate areas, which should allow smaller waste hauling companies to bid and improve the competitive bidding process. As a result, bidders will have the opportunity to bid on one, two, or all three sections. Thus, the City could potentially assign up to three separate apartment recycling contracts.

The City service area extends beyond the boundaries of the contract service area. The City service area contains about 25% of the City's apartment dwellings, which are scattered throughout the City in established blue box zones. With the additional of two new recyclingbeats (i.e., increasing from 20 to 22 beats), apartment dwellings in this area can be efficiently integrated with the City's existing blue box recycling operations. Because the City's recycling trucks are capable of servicing blue box and apartment recycling customers, the amount of recycling truck traffic in these residential areas will be kept to a minimum.

Although the City will not be participating in the competitive bidding process (i.e., submitting a sealed bid package for the contract service area), the General Manager of Engineering Services and CUPE 1004 will be preparing a "bid estimate" to compare and evaluate private bids. An additional benefit of preparing a bid estimate is to protect the City from receiving unfavourable bid prices, particularly if the City receives only one bid. If the "bid estimate" provides the City with overall best value in terms of cost, service, and flexibility, then Council will have the opportunity to reject all private bids in favour of using City forces.

3. Apartment Recycling User-Fees

On January 1, 1998, the City implemented a Solid Waste Utility system, which is a cost recovery mechanism for solid waste management programs. Under the utility system, City solid waste customers are billed user-fees for each type of solid waste service. For example, customers that receive City blue box recycling and residential garbage service will be billed user-fees of $45 and $100, respectively, in 1998.

The apartment recycling program will be funded in a similar manner. Apartment recycling user-fees, which will also include operating costs of other waste reduction programs such as Christmas tree chipping events, worm composter distribution events, will be billed to all City apartment buildings on a "dwelling unit" basis. For example, an apartment building containing 100 dwelling units will be billed 100 times the annual apartment recycling "dwelling-unit" user-fee. Assuming the apartment recycling user-fee will be $16/dwelling-unit/year ($14 for apartment recycling and $2 for other waste reduction programs), a 100 dwelling-unit building would be billed $1,600 for annual apartment recycling services.

The per dwelling unit user-fee(s) will be billed to the registered owner as a "new service" charge on the property tax notice in July of each year. For strata title apartment buildings, the user-fee would be billed directly to the individually owned suites. For co-ops and rental apartment buildings under one registered ownership, the user-fee will be billed to the property owner and not the individual suites.

Since the property tax roll does not contain complete suite information for the approximate 120,000 individual apartment dwellings, considerable work is required to build the database from other data sources in order to bill this user fee in 1999. This preparatory work will start upon approval of the staffing requirements in this report.

4. Recycling at Vancouver Schools

Engineering and Vancouver School Board (VSB) staff have had preliminary discussions about the possibility of integrating a city-wide school recycling program with the City's blue box and apartment recycling programs.

Integration of the City and VSB recycling programs would have three significant benefits:

… school children, teachers, and VSB staff would be able to participate in consistent recycling programs both at home (via blue box or apartment recycling) and at school;

… blue box and apartment recycling trucks would already be operating within close proximity to all VSB schools, thereby making efficient use of our equipment; and,

… a comprehensive VSB recycling program would further contribute to the enhancement of our environment by reducing the amount of waste diverted to landfills.

Although the City would provide school recycling services on an "at-cost" basis, which is consistent with the "utility" concept, the VSB program would likely have a significant impact on City recycling operations. As a result, Engineering staff will continue its analysis about the feasibility of providing such services.

The General Manager of Engineering Services will report back to Council on this issue when further information is available.

ENVIRONMENTAL IMPLICATIONS

The ARP represents just one of the many important solid waste programs that is required to achieve the Regional Solid Waste Management Plan's 50% waste reduction goal. The ARP is expected to divert roughly 12,000 tonnes, or 20%, of the City's multi-family solid waste from landfills. Hence, the ARP is expected to have a positive environmental impact.

SOCIAL IMPLICATIONS

The ARP is expected to provide positive social implications to all Vancouver residents through the further enhancement of our environment.

PERSONNEL IMPLICATIONS

The implementation of the ARP requires the creation of the following permanent positions:

… three Clerks (two permanent and one temporary, subject to review upon full program implementation);
… one temporary Engineering Assistant; and,
… two permanent Recycling Truck Drivers.

Job descriptions for these positions are outlined in Appendix "B".

These positions will be subject to job evaluation by the Director of Human Resource Services.

FINANCIAL IMPLICATIONS

Capital Expenditures

The capital expenditures required for the ARP are significant. The two biggest expenditures are for purchasing recycling containers (used by both the contractor and the City) and recycling trucks (used by the City). The City will purchase both the recycling containers and the recycling trucks through separate purchase tenders.

It should be noted that all recycling containers will be purchased by the City, including those used by the contractor in the contract service area. City staff favour this approach as opposed to requiring the contractor to supply recycling containers for the following reasons:

… the City controls product selection criteria;
… the types of recycling containers used throughout the City will be consistent; and,
… a separate tendering process would likely result in lower costs to the City, as collection companies are in the business of hauling, not supplying containers.

Also, the City will be purchasing a total of four recycling trucks. Two trucks will be required for daily recycling operations and two trucks will be required to provide spare capacity for future growth and equipment downtime. The existing blue box fleet is currently short of spare trucks.

The breakdown of these and other miscellaneous capital expenditures are estimated as follows:

     
Capital Estimated Units Estimated Cost
Recycling Containers
- 360 litre wheeled carts
- blue boxes
- reusable blue and yellow bags
- apartment tote bags		 14,000
8,000
16,000
115,000

$1,200,000
$54,000
$10,000
$500,000
Equipment
- recycling trucks (including spares)

4

$560,000
Miscellaneous
- office staff equipment
- computer systems
- Promotional Materials / Advertising
- Implementation (delivery of carts, site visits, dwelling unit count)

4
4

-
-

$10,000
$12,000
$60,000
$150,000
Total Estimated Capital Expenditures:

$2,556,000

The above noted capital expenditures will be funded from the Solid Waste Capital Reserve. Replacement recycling containers will be funded through annual operating costs and replacement trucks will be funded through the Truck Plant Account.

Operating Costs

Annual operating costs of the ARP will consist of the following components: contract costs; collection and supervisory City staff costs; City management and contract administration costs; recycling container maintenance and replacement costs; recycling hotline staffing costs; recycling truck maintenance, fuel, and amortization costs; and promotional and advertising costs. Staff estimate that these costs will total $1,650,000 per year, whichincludes $1,150,000 of associated contract costs and $500,000 of associated City costs. It should be noted that contract costs are "best guess" estimates at this time, as these costs will not be known until actual bid prices are received.

As discussed later in this report, staff anticipate that the City and contract portions of the apartment recycling program can be begin implementation as early as July, 1998 and November, 1998, respectively -- full implementation is expected to be complete by December 31, 1998. As a result, operating costs in 1998 are expected to total $400,000 ($200,000 of City costs and $200,000 of contract costs). Staff believe these costs should be funded from the Solid Waste Capital Reserve, and not recovered through the Solid Waste Utility, for the following two reasons:

… Recognizing that buildings will be brought on-line on a gradual basis, user-fee billing for 1998 would be difficult to implement and administer since it would have to be done an a pro rata basis.
… Prior to January 1, 1998, the blue box program was fully funded from the Reserve.

However, effective January 1, 1999, the Apartment Recycling Program will be fully funded from the Solid Waste Utility user-fee system.

IMPLEMENTATION PLAN

The apartment recycling program will be implemented in two phases: phase one will consist of the implementation of the City service area, and phase two will consist of the implementation of the contract service area.

A schedule of implementation events follows:

  ACTIVITY TARGET START DATE TARGET COMPLETION DATE
1. Solicit collection and hauling bids. April, 1998 June, 1998
2. Purchase recycling containers. April, 1998 July, 1998
3.* Procure new recycling trucks April, 1998 January, 1999
Phase One (City Service Area)
4.** Conduct individual building site visits. July, 1998 October, 1998
5. Collection service begins; buildings brought on-line on a gradual, geographically-efficient basis. August, 1998 November, 1998
Phase Two (Contract Service Area)
6. Procure trucks; conduct individual building site visits. July, 1998 December, 1998
7. Collection service begins. November, 1998 December, 1998

* As an interim measure (to get the City portion up and running in 1998), staff will use four recently retired City blue box trucks until new trucks have been procured.
** Site visits are essential to the implementation process. The purpose of a site visit is to look at the physical characteristics of each building to determine the best location to store recycling containers (for fire regulations, resident convenience, collection efficiency, etc), and to gather important site information such as number of dwelling units. Each site visit takes about 30 minutes. Site visits will not be required for buildings that utilize the blue box recycling system.

COMMUNICATION PLAN

A good communications plan is critical to the immediate success of any new City program. Thus, the following communication plan has been developed to target apartment building/strata owners, superintendents, and apartment dwellers.

  ACTIVITY   TARGET DATE
1. Press Release describing new program.   June, 1998
2. Post information about new program on the City Web Page.   June, 1998
3. Advertise in community newspapers:
- describe new program
- who it affects		   June, 1998
4. Send introductory letters to registered building/strata owners asking them to contact the City Recycling Hotline so we may update our existing apartment database; Hotline staff to gather data such as owner name(s), mailing address, building address, number of dwelling units.   June, 1998
5. Send program brochures to all apartment units via Canada Post.   July, 1998
6. Advertise in community newspapers to continue program promotion.   Bi-annually

CONCLUSION

With the recent approval of the Solid Waste Utility, the City is now in a position to implement the Apartment Recycling Program. In response to Council's request to contract out a portion of the ARP, staff recommend contracting out the densest multi-family portion of the City and servicing the remaining portion with City blue box crews. This approach is expected to provide the best value to the City in terms of cost, service, and flexibility, and minimize the amount of truck traffic within residential neighbourhoods. The contracted portion of the ARP will service roughly 75% of the City's apartment dwellings, and the City portion will service the remaining 25%.

APPENDIX "A"

MULTI-FAMILY PROPERTIES - APARTMENT RECYCLING PROGRAM

       
Property Tax Use-Code Property Description Approximate Number of Properties Approximate Number of Dwelling Units
30 Strata-Lot Residential (Condo) 970 36,000
39 Row Housing - Single Unit Ownership 100 2,600
50 Multi-Family - Apartment Block 1,800 42,000
51 Multi-Family - Vacant 80 -
52 Garden Apartment Row Housing 110 4,500
54 Multi-Family - High-rise 310 23,000
55 Unknown 40 1,200
57 Strata Rental Townhouse - 1 Owner 15 300
58 Strata Rental Apartment - Frame Construction - 1 Owner 110 2,500
59 Strata Rental Apartment - High-rise Construction - 1 Owner 15 1,300
202 Stores and Living Quarters 850 5,800
203 Stores and Offices with Apartments 100 800
TOTALS 4,500 120,000

APPENDIX "B"

STAFFING REQUIREMENTS

Implementation of the ARP will require the creation of the following staff positions:

Clerks
… One permanent position and one temporary position, which will be subject to review upon full program implementation (anticipated classification as Clerk II). Responsibilities to include miscellaneous clerical work and answering telephone calls as part of the City's Recycling Hotline.
… Two permanent positions to begin immediately (anticipated classification as Clerk II). Responsibilities to include miscellaneous clerical work and answering telephone calls as part of the City's Recycling Hotline.
… One permanent position to begin in May, 1998 (anticipated classification as Clerk III). Responsibilities to include maintenance of apartment dwelling information and customer service resulting from billing activities.

Assistant Technician
… One temporary position to begin in May, 1998 and end upon full program implementation (anticipated classification as Engineering Assistant II). Responsibilities to include assisting in implementing City service area by processing authorization forms and container lane permit applications, retrieving various building information from site visits, answering questions from building managers, updating the apartment recycling computer database, and preparing information brochures and flyers.

Truck Drivers
… Two permanent positions to begin in July, 1998 (anticipated classification as Truck Driver III). Responsibilities to include providing recycling collection service to blue box and apartment recycling customers.

*****

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