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October 30, 2000
City of Toronto Signs Republic Waste Disposal Contract (includes Backgrounder)
  
Works and Emergency Services (WES) --- The City of Toronto has signed a
contract for its solid waste disposal needs with Republic Services Canada Inc.
and Wilson Logistics Inc. for transportation to and disposal at the Carleton
Farms Landfill, located in Michigan. This contract provides the City with
disposal capacity for both its private sector waste -- waste from industrial,
commercial and institutional sources (ICI) -- and municipal waste. This
contract leaves the City at full liberty to engage in recycling and composting
initiatives to further reduce the amount of its municipal solid waste going to
landfill (aside from the minimum 100,000 tonnes per year of ICI waste required
after 2002).

The Republic contract has a term of five years, beginning January 1, 2001, but
in addition, contains renewal terms, which could provide disposal capacity for
up to 20 years. Disposal will occur at an initial rate of 300,000 tonnes of
solid waste per year for two years, at a cost of $50.75 per tonne. This
arrangement facilitates a December 31, 2002 closing of the City's remaining
public landfill, the Keele Valley Landfill Site, located in the City of
Vaughan. Shipping solid waste to Republic's Carleton Farms Landfill prior to
the closure of Keele Valley reduces the amount of solid waste disposed at Keele
Valley on a daily basis. This allows additional time for settlement and organic
decomposition to take place. Extending the landfill's service life to the end
of 2002 results in a financial gain for the City.

The Province has advised Toronto that its policy is to not allow the City of
Toronto to extend the life of the Keele Valley Landfill past 2002.

The execution of the contract with Republic represents the completion of one
component of Toronto's Integrated Solid Waste Resource Management ("TIRM")
Process. The next steps are to enter contract negotiations with two proponents
offering diversion services (Conporec of Tracy, Quebec and Miller Waste Systems
of Markham, Ontario) and proceed with a second Request for Proposals aimed at
engaging new diversion technologies. The City, in cooperation with Enwave, is
also exploring the possibilities of anaerobic digestion of solid waste to
produce heat and energy for the downtown core. In addition, the City is
undertaking a series of measures to expand recycling in order to reduce
disposal and achieve the City's diversion goals.

For details on the terms of the contract, please see the backgrounder below.

---------------
Backgrounder
SUMMARY OF REPUBLIC WASTE DISPOSAL CONTRACT

The following is a summary of the contract terms between the City of Toronto
and Republic Services of Canada Inc. (Republic Canada) for waste disposal.

 There are four parties to the agreement with Toronto:
- the proponent, Republic Services of Canada Inc. ("Republic Canada")
- the parent company, Republic Services Inc. ("RSI")
- the owner of the Carleton Farms landfill ("Carleton Farms"), and
- the waste hauler, Wilson Logistics, Inc. ("Wilson")

 Disposal and transportation services are dealt with by separate obligations
of Republic Canada and Wilson (the obligations of Wilson are guaranteed by
Republic Canada).

 The obligations of Republic Canada under the agreement are guaranteed by its
parent company. The contract provides Toronto with indemnification with respect
to the United States Superfund liability in the event that environmental
impacts were to occur at the landfill.

 The initial term of the agreement is five years from January 1, 2001. There
are five renewal periods that can be exercised at the option of the City on the
same terms and conditions during the course of the contract. If the City
exercised all five options, the contract could extend to 20 years.

 Republic is guaranteed a minimum of 285,000 tonnes for 2001 and 2002, and
100,000 tonnes annually after 2002.

 The price to be charged to the City (in 2001 dollars) is $50.75 per tonne
(haulage and disposal), with an annual increase equal to a 75 per cent change
in the Consumer Price Index (CPI).

 The disposal price charged will not be lower for any GTA municipality
provided that the waste volume from that municipality is equal to or less than
the volume delivered by Toronto.

 The primary disposal site is the Carleton Farms Landfill in Wayne County,
Michigan. The Brent Run landfill located in Genesee County, Michigan is
identified as the alternate disposal site.

 Republic Canada takes title to the waste upon delivery at the transfer
stations.

 Both Carleton Farms and Wilson must develop, document and implement an
environmental management system satisfactory to Toronto that includes:
(a) a formal environmental policy statement;
(b) a clear specification of staff responsibilities and accountabilities;
(c) a formal training program for staff;
(d) appropriate written procedures;
(e) objectives and targets to improve environmental performance;
(f) monitoring programs to document and measure performance;
(g) an emergency preparedness plan that identifies and addresses potential
incidents;
(h) an annual audit of the facility performance; and
(i) ongoing senior management review of conformance to regulatory requirements
and associated response to the issues and commitment to continuous improvement.

 Republic Canada, Carleton Farms and Wilson will provide Toronto with stated
documents, reports and information monthly, semi-annually and annually as
required based on the nature of the activity.

 Any Greenhouse Gas credits that become available will be allocated to Toronto
on a prorated basis.

 There are provisions that would allow termination:
- by Toronto in the event of default on the part of the contractors (for
example, failure to substantially perform the basic disposal or transportation
services for a period of 15 days; or a material change in the operation of the
disposal or transportation services that constitutes a breach of law and is not
remedied or a regulatory action that is not resolved within 90 days or such
longer time as is permitted by a regulatory authority);
- by the contractors in the event of default of the City; and
- by the contractors or Toronto if a party is unable to perform its obligations
as a result of an uncontrollable circumstance lasting for a period of 90 days.

 The parties will provide a letter of credit and a performance bond in respect
of their respective disposal and transportation service obligations.

 Republic Canada and Wilson will provide insurance coverage in accordance with
the RFP requirements.

 Should there be a need, provisions are in place for arbitration as a means of
resolving any disputes or claims under any agreement (after a good faith
attempt at resolving the dispute in a meeting).

The complete summary text of the terms of the Republic contract is available in
Appendix A of an October 3, 2000 City of Toronto staff report called Toronto
Integrated Solid Waste Resource Management ("TIRM") Process; Category 2, Proven
Disposal Capacity; Response to Requests for Information. It can be found on the
City's Web site at: ww
w.city.toronto.on.ca/involved/swm/trim_process_category2.pdf


Additional "TIRM" Process information is available on the city's web site at
www.city.toronto.o
n.ca/involved/swm/swmmep.htm


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