The heavy equipment was brought out at the Tuesday, August 7, photo op marking the formal rollout of privatized garbage pickup to 165,000 households west of Yonge to the Humber River: two shiny new garbage trucks painted in the lime green corporate colours of the surprise winning bidder, Green for Life Environmental Corp (GFL).
Mayor Rob Ford was a no-show, leaving Works Committee chair Denzil Minnan-Wong to do the trash talkin’.
Minnan-Wong scraped the bottom of the garbage bin to fire back at council colleagues who warn that the city may be left holding the bag on this deal.
The results from day one of Toronto’s privatization experiment aren’t good. Some 500 households didn’t have their trash picked up, and hundreds more had theirs collected hours after the 5 pm deadline prescribed by the contract with GFL.
Total number of complaints received by the city on the first full day of privatized pickup in District 2: 163 – more than three times the number on a normal day.
Does the Ford administration’s case for privatized waste collection pass the stink test?
The spin Private garbage pickup will save the city money: $11.9 million in the first year and $11.1 every year of a seven-year contract after that.
Real deal The amount private curbside pickup will save taxpayers has been a moving target ever since the idea was first floated, with estimates running as high as $49 million to as low as $8 million a year.
Minnan-Wong was fudging the numbers again Tuesday, claiming that under the terms of the current deal with GFL the city stands to save “more than $100 million.” Even using the Ford admin’s estimates, for argument’s sake, savings would actually be $78.5 mil.
If the city decides to exercise its option to extend the seven-year deal by another two years, then Minnan-Wong’s numbers work (barely). But that’s assuming a lot.
Will GFL be able to deliver equivalent service with 30 fewer trucks? Already the ground is being prepped for disappointment, Minnan-Wong warning there’ll be snags and urging the public to be patient while what he termed inevitable delays are worked out.
He didn’t say how long that grace period should be, but why hasn’t GFL taken steps to avoid problems in the months before the company took over what it calls its most important contract? We should expect no less from the private sector, right?
The spin According to Minnan-Wong, the Ford admin has “made the financial case” for private pickup – they’ve contracted with the company that was best able to give value for money.
Real deal A little history is in order. Council’s decision to issue a request for quotation as opposed to a request for proposal for curbside pickup meant the bids it received weren’t actually evaluated in a meaningful way.
Under the rules of an RFQ, staff were legally obliged to accept the lowest bid. There was no evaluative process to speak of. Ernst & Young couldn’t conduct the third-party review of the winning bid that council asked for because the RFQ had too few details to evaluate. The next-lowest bidder for the contract quoted several million dollars more than GFL, leaving even privatization supporters on council leery of the outcome.
The spin Privatized garbage pickup is an important test case for future contracting out of other city services.
Real deal Not so fast. Even Minnan-Wong was cautious on this point, saying the city should look at privatization “where it makes sense.” That sounds positively, um, progressive compared to the privatize-anything-that’s-not-nailed-down spiel coming from the mayor’s brother.
Minnan-Wong knows better. Has council come around to a different perspective on the privatization front, looking beyond the bottom line to the higher social costs attached to outsourcing?
April’s decision to turn back a bid to contract out cleaners’ jobs seems to indicate as much, and even fiscal conservatives like Karen Stintz voted no to that. She noted then that the bonuses paid to Ford’s buddies at Build Toronto amounted to more than the city stood to save by privatizing cleaning.
To quote Minnan-Wong, albeit in a slightly different context, “Taxpayers simply want value for money.”
The spin If all goes according to Hoyle, expect privatized curbside pickup right across the city.
Real deal The political climate at City Hall has changed significantly since the hurly-burly of Ford’s first few months. Would his plan to privatize garbage pickup pass today?
More to the point, cities where privatization has worked have used a mix of private and public sector delivery of service to measure one against the other.
Privateers might argue that contracting out garbage pickup to a different company in the districts east of Yonge would provide competition to keep costs down.
Only problem with that idea is that there’s nothing to stop one company from colluding with the other to jack costs. Or one company swallowing the other to effect a monopoly. (See GFL’s purchase earlier this year of Turtle Island Recycling, the company with the contract for private pickup in Etobicoke.)
The spin The city will be monitoring GFL very carefully, on a daily basis according to Minnan-Wong, to make sure the company is meeting the terms of its contract.
Real deal It’s unclear what performance standards are in place. Minnan-Wong vaguely alluded to “remedies” in the event of a catastrophe.
When the Works chair talks oversight, what he really means is that 311 will field customer complaints. Will city workers be charged with cleaning up after GFL when there’s a mess to deal with? It’s hard to imagine any other scenario when GFL is assigning barely half a dozen staffers to customer complaints.
Our customer-service-obsessed mayor won’t be following GFL trucks to make sure compost and regular garbage aren’t being mixed. He might not care anyway, since he voted against putting diversion targets in the contract.
We know from experience with private pickup in Etobicoke that recycling rates there are 6 per cent lower than in districts that handle curbside pickup in-house. So much for those recycling efforts.
enzom@nowtoronto.com | twitter.com/nowtorontonews
