Garbage privatization in Toronto and why it stinks

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All cities have civil workers; police, fire, paramedics as well as outside and inside public service workers. These workers, including the solid waste workers, are mandated to serve the taxpayer.

These public service workers, as a whole, form the underpinning of our community. In privatizing residential solid waste pickup, their mandate would be solely to generate profit. There would be little or no accountability back to the taxpayer. Solid waste workers serve the public, they are public servants. Privatized garbage workers serve only their senior executive and shareholders.

Toronto Mayor Rob Ford and his handpicked Infrastructure Committee are proposing that the City fire 300 garbage workers and award a contract for those jobs to the lowest bidder. They estimate a savings of 20 per cent ($8 million) per annum by using contract workers as opposed to public servants. This estimate is based on comparing 2005 figures for currently privatized Etobicoke garbage pickup to today's figures for Toronto District 2 (Yonge to Etobicoke border).

This estimate does not add up because figures from a report in 2005 are being compared to the service as it stands today, six years later. Since then, with the introduction of gray, blue and green bin pickup, the job residential collection has changed significantly. Furthermore, comparing the job done in Etobicoke to the requirements of District 2 is comparing apples to oranges. A fairer comparison would be to compare Etobicoke to Scarborough where the difference would be significantly less than 20 per cent, using the city's own reports. Let's also not forget that there has, as yet, been no bid. No bid, shaky data, comparing unlike objects all spell out an estimate written in smoke.

The city also expects to "save" $3 million by selling off the vehicles that would become surplus after a contract was awarded to the private sector. These vehicles, which taxpayers paid $250,000 each new, are going to be let go at the fire sale rate of $15,000-$20,000 each. Who is it that will be buying these trucks? Almost certainly the company awarded the collections contract will be the benefactors of this sweet deal. Is it any wonder then that they will be able to come up with a low-ball offer when they roll these windfall savings into their bid?

Does privatizing garbage collection actually save money? Mildred Warner, Professor of City and Regional Planning at Cornell University doesn't think so. She notes that:

"In populations over 20,000, there is no advantage to contracting out because cities of that size can achieve the same economy of scale as any other private company."

She also tells us that:

"Initially private contracting may seem cheaper but the savings quickly erode over time and eventually private contacting would cost more in the long run."

This rings particularly true when you consider, down the road, having to negotiate a contract renewal when we no longer have a fleet of service vehicles. We will then be in the unenviable position of having to fund a capital budget of $25 million for new trucks on the one hand, or signing a long-term, high-priced contract that will end up costing us much more than if we were negotiating with public service employees.

Has privatized garbage collection worked in other municipalities? Apparently not. Garbage collection was privatized in both Ottawa and Hamilton. Both cities have returned, at least in part, to the public domain. Blair Smith, Hamilton's Manager of Waste Collection, said that:

"A 2004 report found that private collection was cheaper than the public workers."

However, a report soon to be sent to Hamilton City Council will show that the union members have closed the gap.

"[It] has changed to the point where the costs are almost identical," says Smith.

For years civil employees have performed their duties with a clear mandate and commitment to the City of Toronto taxpayers. This commitment to the taxpayer vanishes in a privatized setting. It appears that any savings that may have been had vanish as well.

The public has been led to believe that the job losses will only be 300 "temporary workers." You can call them temporary worker if you like, but the fact is that most have been working 40 hours per week, 52 weeks per year, year after year. Some have worked as long as a decade or more in these "temporary" positions. These positions constitute full-time employment. Mayor Ford is using the mirror trick to make full-time jobs look as though they are only temporary.

How is it that the private sector can employ workers more cost effectively than the public sector? One factor is that private workers are not paid pensions or benefits. If you get sick, you lose a day's pay. Get a bad flu for four days? You lose up to a quarter of your monthly income and your job will be in jeopardy. Garbage collectors are injured more often than any others in the public sector, including police and firemen. In the private setting, if you are injured, you are fired. This is so the private companies can claim "zero lost time hours" due to injury.

Do garbage men even deserve a pension? That is most likely beyond the scope of this article. But, consider this: the cost of benefits and pension for the public service worker will be, extraordinarily, exactly equal to the profits that will be funnelled out of the local economy by the multi-national contract holder. Also consider, these workers, injured or not, do not simply disappear. Unable to work and without compensation or too old to work without any pension beyond the meagre CPP, they will all eventually fall onto the social services safety net. I am certain that these costs were never factored in to the supposed savings for Toronto.

Do private sector workers perform their duties more efficiently than the public sector? The city, in their report, claims this to be true:

The private contractors typically operate with smaller fleets, fewer spare vehicles, fewer staff and lower overhead.

Smaller fleets and fewer staff have led to some serious problems in Etobicoke that were never mentioned in the city's report. In order to get the job done faster, with fewer people, the Etobicoke trucks have been spotted, time and time again, racing through the city streets with their drivers laughing about their actions when they reached the shared transfer station. To cut down on the (non-productive) trips to the transfer stations, Etobicoke trucks are over loaded and overweight. A truck that is overweight requires greater braking distances. A three year old boy was crushed to death by a truck that could not stop in time. Overloading was, partially, blamed for the accident. Etobicoke contractors were found to be taking a break in the last hour of their shift while a garden hose wetted down the garbage in their truck for which they are paid by the ton. A truck collecting Blue bin recycling was so overloaded and densely packed that the truck-sized "brick" that it dropped off could not be broken apart for sorting and recycling. In the end the entire load had to be carted off to the land fill as garbage.

Finally, let's take a look at the contract itself and its benefits for the budget and taxpayer. Oh, wait! We will not be able to look at the contract or its terms under the confidentiality agreement imposed by the city and demanded by the contractor. It turns out that we will, in all probability, never know whether contracting out these jobs was good for the city or whether we lost a bundle.

Here is the icing on this cake: the city has asked for, and gotten, permission to tender the bid and award the contract without any sort of governance from council. They say that bringing the bid before council will only delay the awarding of the contract with the result of $300,000 in lost savings. This is very much like the door-to-door flim-flam man who will pressure you into signing a long-term contract "while the deal is still good."

The democratic process will be bypassed. Accepted best practices for purchasing and acquisitions will be ignored. A quarter of a billion dollars on a deal that is to last the remainder of the mayor's term and all of his next term(if re-elected), all done secretly, with a wink and a nod, behind closed doors, safely away from public scrutiny.

In the final analysis, the mayor has conjured up a savings estimate written in smoke. He has used the mirrors of temp vs. full-time workers to soften the blow of job losses. He has taken worker pensions vs. corporate profits to do the walnut shell switcheroo. He has used the Wizard of Oz "don't look behind the curtain" technique to hide the mechanics and terms of a deal secretly arrived at, far from the seeing eye of the public.

At this point I am not sure whether to laugh or cry about this issue and will simply leave it to AC/DC to summarize: "Dirty Deeds Done Dirt Cheap."

Dave Buchanan is a Toronto native, growing up near Kensington Market. 

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