City discards IPI in favour of Smithrite starting next July

Bye, bye, IPI. Hello, Smithrite.

Coquitlam city council cut loose its much-criticized garbage contractor, International Paper Industries (IPI), in favour of Smithrite Disposal Ltd. starting next summer.

And taxpayers will be shelling out more for the service.

Smithrite’s contract with the city will run from July 1, 2009 to June 30, 2012 at a cost of $5,175,746 annually, and the city will have the option of extending that up to another three years.

And although Smithrite’s bid was the lowest of four received for the three-year term, residents will still be paying much more for garbage collection.

Starting next year, the cost for garbage pick-up in Coquitlam will go from $160 per household to $240. In 2010 it will rise again, to $330 per household.

A staff report states the increases are because of much higher contract costs. IPI currently charges the city $1.9 million per year, a price agreed upon when there was significant competition between IPI and Waste Management for the contract, and the value of recyclable materials is expected to be minimal given the current economic turmoil.

The report adds that while the increases are substantial, they represent fair market pricing and other cities that have recently had similar results in studying garbage collection options.

Proposals for the three-year term were also received from Sierra Waste Services ($8.2 million), Halton/Emterra-IPI ($4.7 million) and Waste Services Inc. ($8.8 million). The city also requested proposals for a five-year contract with results from: Sierra ($5.6 million); Smithrite ($5.1 million); Waste Management ($7.1 million); BFI ($7 million); and Waste Services ($8.4 million).

Sierra’s five-year proposal was found more beneficial in terms of the number of trucks and staff but Coquitlam staff ranked Smithrite’s three-year proposal higher because of its lower cost and the advantages of a shorter contract.

At Monday’s meeting, council also learned how much it could cost to make garbage collection a city-run service.

Staff estimated the cost for manual collection at $7.7 million per year, of which $2.5 million would be for operating costs. Start-up investments for trucks, offices and a maintenance building were estimated at $12.4 million. Annualized costs for automated collection were estimated at $6.8 million and $18.6 million for the initial investment.

The annual costs per household for in-house service would cost about $430 for manual pick-up and $397 for automated pick-up, the report states.

Given the cost implications for in-house service and the looming deadline, city staff recommended councillors approve Smithrite as the next garbage collector.

Coun. Selina Robinson asked whether the garbage routes can be shifted when bears are active in certain neighbourhoods and Mark Zaborniak, Coquitlam’s manager of design and construction, said those negotiations can be pursued as the city finalizes the contract wording.

Staff will also continue evaluating options to move to automated collection, as is done in Port Coquitlam and will soon be done in Port Moody, with one possibility being an in-house service.

spayne@tricitynews.com