NEWS PHOTO COLLIN GALLANT Recycling bins are collected by interim contract provider GFL Environmental, on College Drive in decmber 2019. On Monday, city council directed adminsitrators to finalizae a permanent contract with the company after a call for proposals concluded last month.
cgallant@medicinehatnews.com@CollinGallant
Keeping recycling fees low will mean that paper, cardboard and plastic collected from curbsides in Medicine Hat will be trucked out of the region.
City council on Monday approved that a new 10-year contract be offered to GFL Industries. That company currently holds an interim contract and does initial sorting in Dunmore, before the bulk is hauled to its Edmonton plant.
That would continue under a new contract, which city administrators will now negotiate after they recommended GFL’s winning proposal from a tendering process this fall.
That process opened after former contract provider, Environmental 360 Solutions (E360S) called for higher fees to cover losses on reselling the materials into depressed global markets and the city exited the contract.
That firm originally won the contract with a bid to takeover city recycling operations staffed by local agency Redi.
Those three companies submitted proposals for a new permanent contract, though North-American conglomerate GFL presented the best case, said administrators.
“The recycling business is evolving,” said utility commissioner Brad Maynes. “It’s not the same as it was even two years ago. We should be confident that we’ve found a company that shares the same values.”
That, he added, includes the ability to market paper, plastic, cardboard and other recycling globally, change with industry trends and technology, and keep fee changes to a minimum.
Councillors generally applauded staff for what’s been a “seamless” transition between providers last fall, but debated the logistics of the new operation.
“Staff has made the best of a bad situation, but I’m concerned about (local) jobs,” said Coun. Kris Samraj.
Coun. Robert Dumanowski restated Monday that Redi has been a valuable partner over the years, but the decision is the best interest of utility customers.
“Conventional logic asks how it can be economical to ship it all that way … but by the same logic there are economies of scale at play,” he said. “There are some sensitivities at play, but the public needs to now there is no local preference (policy) we can invoke and the bottom line is cost.”
Redi, an agency that provides job training, employment and programming for people with developmental disabilities, originally handled the contract at the city materials sorting facility. It created a bid when the curbside contract was originally tendered.
Executive director Craig Wood told the News that his group’s new bid was based on fee revenue, not the resale values, which he said likely didn’t align with the stated priority of allowing private sector marketing of material, rather than city hall.
“We’re not shocked … we’ve managed and will continue to manage, but it’s nice to have enterprise funding in (our budget),” said Wood. “There’s some merit in (the decision), and I certainly hope that for taxpayers it does make sense in the long term.”
Councillors said the goal of extending the life of the landfill is key, but selling material is difficult since the market, specifically for plastics, has been depressed since global buyers in Asia and China began refusing low-quality unsorted loads.
“Unfortunately there is a cost associated with that … any company hauling recycling has to pay the bills,” said utility committee chair Coun. Phil Turnbull.
That led E360S to request the city reopen its contract and raise fees in order to stem losses that mounted after global prices collapsed.
That company still owns the former city sorting facility – the city used the proceeds to purchase the 24,000 blue carts, but has a first option to repurchase the facility if it is placed up for sale.
E360S managers told the News this fall that without the volume from the city contract, staff had been reduced from more than 20 to six workers.
