Report to/Rapport à: Select a Committee in English Select a Committee in French

Report to/Rapport au:

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council/et au Conseil

14 May 2002 / le 14 mai 2002

Submitted by/Soumis par: Rosemarie Leclair, General Manager/Directrice générale

Transportation, Utilities and Public Works/Transports, services et travaux publics

Contact/Personne-ressource: P. McNally, Director/Directeur

Utility Services Branch/Direction des services publics

Telephone No./Tél.: 580-2424, extension/poste 22609

e-mail/courriel: Patrick.McNally@city.ottawa.on.ca

Ref N°: ACS2002-TUP-UTL-0021

SUBJECT:

GSI ENVIRONNEMENT - BIOSOLIDS CONTRACT EXTENSION

OBJET:

GSI ENVIRONNEMENT – PROLONGATION DU CONTRAT CONCERNANT LES BIOSOLIDES

REPORT RECOMMENDATION

That the Corporate Services and Economic Development Committee recommend Council approve the proposed GSI Environnement biosolids disposal option and additional funding requirement of $700,000 per year, based on estimated quantities, for the beneficial reuse of biosolids.

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil d’approuver l’option d’élimination des biosolides proposée par GSI Environnement et des crédits supplémentaires de 700 000 $ par année, en fonction des quantités estimatives, pour la réutilisation bénéfique des biosolides.

Additional Item – No. 14 – Corporate Services
and Economic Development Committee

Agenda 29 – 21 May 2002

Council will be asked to waive the Rules of Procedure at its meeting on Wednesday, 22 May 2002, in order to consider this report.

Point supplémentaire N^o 14 - Comité des services organisationnels et du développement économique

ordre du jour N^o 29 - le 21 mai 2002

Le Conseil sera invité à suspendre les règles de

procédure à sa réunion du mercredi 22 mai 2002

afin d’étudier le rapport pertinent.

BACKGROUND

On 12 December 2001, Council approved the Biosolids Management Plan that included a number of recommendations. The first recommendation read as follows:

The City of Ottawa continue to manage the disposal of municipal biosolids consistent with the principle of beneficial reuse.

In addition, Council directed the Medical Officer of Health to conduct a scientific review of the safety of spreading biosolids, and temporarily directed staff to suspend the land application program. The Medical Officer of Health’s report has subsequently been the subject of debate at both Committee and Council. On 08 May 2002, staff was directed to cancel the land application program and seek alternative solutions via a Motion that read:

"That Council approve that the City seek tenders for the disposal of biosolids through landfilling, composting the biosolids material and/or other options, rather than applying the material on agricultural land."

In reviewing the short-term and tender options, a meeting was held with Supply Branch. The following summarizes the options available:

1. Direct Biosolds to Current Contractor for Beneficial Reuse

GSI Environnement (GSI) was the recommended bidder in response to a Request for Proposals (RFP). In the fall of 2001, RFP 01101-95812-P01 was issued on MERX for the beneficial use of biosolids, to be used when the land application option was not available due either to poor weather or during those seasons when land application or land storage is not available. Subsequently, the contract was issued to GSI Environnement for the contract period from 01 January 2002 to 31 December 2006. At that time, it was estimated that GSI would receive approximately 20,000 tonnes of biosolids annually.

GSI is effectively a waste broker involved in the beneficial reuse of both municipal and industrial biosolids. The firm currently handles approximately 400,000 tonnes of biosolids per year, primarily finding various end uses after composting or as cover for landfill operations. Between December 2001 and mid-May 2002, GSI has received all the biosolids produced at the Robert O. Pickard Environmental Centre (Pickard Centre), and is now approaching the estimated annual contract quantity of 20,000 tonnes. GSI has been very cooperative with the City in that it has modified its operations to receive almost the full estimated annual quantity within a five-month period.

2. Landfilling of Biosolids

An option exists to dispose of biosolids at landfills within or outside the City. Within the City, local landfills include the Canadian Waste landfill on Carp Road, and the City's own Trail Road landfill. The Springhill landfill is not licensed to receive biosolids. Disposal at landfills may again raise concerns in the South Nepean and Stittsville communities. This option would consume the valuable landfill space that a number of solid waste management programs work to preserve.

As a variation on this option, disposal at landfill facilities outside the City is possible. Council has received correspondence regarding this option from Laflèche Environmental Inc. regarding its Moose Creek landfill. With respect to immediate needs, the offer would require the redirection of significant quantities of waste (typically mixed in a 4:1 ratio for disposal). This would represent a significant change to waste flow patterns when considered in conjunction with current waste flow commitments to local landfills. In the longer term, Laflèche has indicated a plan to operate a composting facility by the fall of 2002, in conjunction with GSI. This option remains viable in the longer term as a variation of Option #1, given that GSI and Laflèche already have a working relationship to use biosolids in the production of landfill cover.

3. Pursue Other Technologies Through an RFP/Tender

As noted earlier, the current beneficial reuse contract was just awarded within the last 6 months. Issuing a new tender call would generally constitute recalling the RFP issued in the fall of 2001. Any new facility would likely require a timeline of one to two years to cover the approval, construction and start-up phases. Initial contact has been made with owners of existing facilities - Gatineau, Smith Falls, Les Compost du Quebec. The best responses indicate concerns in meeting short-term needs due to potential biosolid quality issues, plant capacity or cost, respectively. New technology from Fabgroups Technology is still going through the engineering, permit and approval stages to upgrade from its present pilot operations.

DISCUSSION

At a meeting with City staff on 10 May 2002, representatives from GSI pointed out that although the firm is actively working to find new outlets for the processing of biosolids, they were unable to continue to receive the full production of biosolids from the Pickard Centre (typically 4 trucks a day), and want to move back to one truck per day, more in keeping with the original contract. GSI has offered a package, however, based on new capacity that will be available by the end of the month, where it can continue to take all the biosolids produced and use the material in various beneficial reuse options. GSI is only prepared to do this with a commitment that matches the duration of the existing contract, and at a rate of $10 per tonne more for each of the additional tonnes. The current contracted rate will remain unchanged for the original 20,000 tonnes. During the Committee and Council debates that took place regarding this issue, staff estimated the increased cost for disposal other than land application, would likely be between $750,000 and $1,000,000. Based on the same estimated quantities, the GSI offer would result in an increase of $700,000.

As a broker, GSI is already dealing with some of the existing and proposed alternative outlets. In the first five months of the existing contract, material has already gone to Les Compost du Quebec and to the Laflèche Environmental Inc. landfill. An ongoing partnership with GSI could allow the City to support the new and innovative technologies, while at the same time being assured that immediate needs could be met by using the firm's more established markets. Both GSI and Laflèche have indicated a cost reduction will be available with the start-up of Laflèche's composting operating.

Should the City chose not to accept the GSI offer, staff will need to find alternative disposal options when GSI begins to accept only one truck per day. Based on the current assessment, the only short-term option available is landfill.

Considerable time and debate has been spent on this issue to date. Staff are looking for solutions that meet Council’s directions, both those that have been clearly expressed and those that have been implied. The GSI proposal and its outcomes appears to meet these needs, as it sees biosolids being utilized in a way that supports beneficial reuse and sustainability. It puts in place a longer-term solution that aligns with the Biosolids Management Plan, and potentially delays significant capital cost, as forecasted in the Biosolids Volume Reduction Program.

ENVIRONMENTAL IMPLICATIONS

The environmental direction of Council is being followed with this recommendation in that it supports beneficial reuse of this material.

RURAL IMPLICATIONS

This recommendation has no rural implications.

CONSULTATION

The Supply Branch of the Corporate Services Department was consulted and provided the following comments: On 05 December 2001, the General Manager of the Department of Transportation, Utilities and Public Works approved the contract award to GSI Environnement on the basis of “best value”, as well as having submitted the lowest responsive financial proposal. From a Supply Management perspective, continuing to deal with GSI with an increased volume and the resulting increase in the “price per tonne” for that increased volume, is an acceptable solution in order to meet the recent Council directive. It should be noted that the increased fee from GSI to include the additional tonnage is still less than the rates proposed by other acceptable proponents during the recent competitive Request for Proposal process. The amendment to the contract will be approved by the General Manager, Department of Transportation, Utilities and Public Works, under delegated authority.

Public consultation is not required.

FINANCIAL IMPLICATIONS

Approval of the recommendation constitutes a $700,000 annual increase in the operating costs of the Department's Utility Services Branch, Environmental Programs and Technical Support Division. The Department’s 2002 operating budget estimates were developed based on the assumption that the land application of biosolids would continue. These costs, therefore, are in excess of the Department's operating budget estimates and will result in increased pressure on the sewer reserve fund, and ultimately increase the funding gap projected in the five-year forecast. This requirement will be identified as a budget pressure during the 2003 budget process.

DISPOSITION

Staff of the originating Department and the Supply Branch, Corporate Services, will finalize details of the Purchase Order extension with GSI.

GSI ENVIRONNEMENT - BIOSOLIDS CONTRACT EXTENSION

GSI Environnement – Prolongation du contrat concernant les biosolides

ACS2002-tup-utl-0021

Moved by Councillor M. Bellemare

That the Corporate Services and Economic Development Committee approve the suspension of the Rules of Procedure (Section 82 (3)) to consider the addition of item No. 14, GSI Environnement – Biosolids Contract Extension, by Committee at today’s meeting.

CARRIED

Councillor P. McNeely noted the recommendation of a $700,000 expenditure that was resulting from the recent Council decision regarding the spreading of biosolids issue. He referenced the Medical Officer of Health previous comment in that the City was dealing with an unhealthy and concerned waste in the Village of Sarsfield around the factory hog operation. The Councillor requested that when staff was considering the option of land filling biosolids, that the same concept be considered for the hog manure that would result from the Sarsfield hog farm. R. Leclair, General Manager, Transportation, Utilities and Public Works, suggested the inquiry be forwarded to the Medical Officer of Health or the General Manager, Development Services, with respect to the Draft Nutrient Management By-law.

Councillor J. Stavinga requested clarification regarding the technology to be used by GSI Environnement. Ms. Leclair reported the contract required GSI to use the biosolids either in composting or as cover for landfill, resulting in a beneficial reuse contract. With respect to composting, P. Petti, Manager, Environment Program and Technical Support, explained it involved a process where the biosolids were mixed with fibre, yard waste, etc. He added the GSI market was primarily in Quebec and some parts on Ontario and the North Eastern States. Mr. Petti confirmed the composting would be completed in accordance with the Ministry of Environment and the Federal Government regulations regarding composting.

Report recommendations as presented:

CARRIED

Moved by Councillor M. Bellemare

That the Corporate Services and Economic Development Committee approve that the GSI Environnement – Biosolids Contract Extension report be waived to the City Council meeting of Wednesday, 22 May 2002.

CARRIED