Toronto private waste collection savings overblown — study
City underestimates costs of monitoring private waste contracts.
Toronto, ON, May 9, 2011: A new study reveals that city staff have significantly over-estimated the savings promised by privatizing waste collection and that this may put blue box and green services at risk.
"Academic studies show governments should spend about 20 percent of the cost of a private contract to properly monitor the company and ensure it delivers the promised services," said Emily Alfred, Waste Campaigner for the Toronto Environmental Alliance (TEA).
The City report proposes significantly less funding for contract monitoring — at most 4.2 percent of the contract value. If the City were to set aside enough for contract oversight, the estimated savings from privatizing residential waste collection drops from $6 million to about $2 million.
| || ||In 2007, the City Auditor reported that the City had not properly monitored private waste contracts and as a result, service suffered. |
"The only way to achieve the level of savings claimed is by cutting down on monitoring costs, and that could put our services at risk," said Alfred. "We've found a number of examples from Toronto and other cities where problems with contract language, monitoring, and enforcement led to compromised waste diversion."
The City already has a history of not monitoring properly private waste contracts. In 2007, the City Auditor reported that the City had not properly monitored private waste contracts and as a result, service suffered.
"It's unclear why City staff low-balled monitoring costs, therefore suggesting higher potential savings from privatization," said Franz Hartmann, Executive Director of TEA. "It's even more unclear what to make of the fact that Mr. Rathbone, the head of Solid Waste Management and one of the report authors, is departing to work for a private company that may benefit from privatization. What is clear is that City Councillors have incomplete, if not inaccurate, information about the potential costs and savings that would come from privatizing waste collection."
The above findings are in Look Before You Leap: An Environmental Perspective on Privatizing Waste Collection in Toronto, a study released by TEA.
The report calls on City Councillors to reject staff recommendations. "There are too many questions about the staff report and about why it recommends Councillors should be excluded from reviewing the final contract," said Hartmann. "Council should hold off on making any decision until the facts are in front of them. Otherwise, our blue box and green bin services may suffer."
Related individuals, organizations and significant events
To download Look Before You Leap: An Environmental Perspective on Privatizing Waste Collection in Toronto or to read an executive summary of the report, please click here.
Links and sources
New study: City report over-estimates savings from privatizing waste collection, puts services at risk
Posted: May 11, 2011
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