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Mayor wants answers after solid waste facility loses $2.6 million in 2015

Failed contract to process recyclables from Michigan also leads to loss of 36 jobs
20160201 Guelph City Hall Sign KA

An angry Mayor Cam Guthrie wants to know why the Solid Waste Resource Facility lost $2.6 million last year because of a failed deal to process waste from Michigan.

That failed contract also resulted in a second shift at the plant being cancelled on Feb. 29 and 36 employees let go.

"The way I'm feeling right now is that I'm angry, I'm quite angry about this," Guthrie said. "The business case presented to council clearly said we would be making money."

He said he wants staff to answer for the mess.

"I have more questions than I do answers after reading the report. I have some serious questions for staff in this matter and I'm quite, quite upset."

He said his questions will revolve around "who knew what when and why wasn't council apprised of certain information at the right timing?"

The details of the large financial losses are outlined in a  staff report heading to the city's Corporate Services Committee April 4.

Guthrie said he will be there with lots of questions.

"I have a lot of questions for the auditor, who has looked into the matter, and I believe council will have a lot of questions about this as well," he said.

The 36 employees were let go in an attempt to mitigate further financial losses, which the report said would have been an additional $600,000 in 2016.

The second shift was added in mid-2014 to handle recyclable material from Michigan imported through a broker.

The report also outlines steps that have been taken to try and ensure such a situation does not occur again, including risk assessment, third-party reviews and increased transparency.

Guthrie wants to know why those safeguards weren't in place before the contract for the Michigan garbage was signed.

"It begs the question as to why the types of safeguards being recommended in this report weren't in the original report," Guthrie said.

"When business cases are presented to council, we need to make sure the right risk vs. rewards are analyzed properly for council consumption. Council makes decisions based on the information presented to it by staff."

The contract to process Michigan recycleables, which was supposed to result $377,000 in positive annual revenue, has also been cancelled.

The report blames the losses on a 40 per cent drop in the price for recycled materials, down time due to maintenance and less recyclable material in the Michigan waste than was anticipated.

"The overall capture rate was 64 per cent, thereby contributing to a further loss in revenue and creating an associated increase in landfill disposal costs," says the report.


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Tony Saxon

About the Author: Tony Saxon

Tony Saxon has had a rich and varied 30 year career as a journalist, an award winning correspondent, columnist, reporter, feature writer and photographer.
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