Simcoe County’s planned environmental resource recovery centre (ERRC), to be located in Springwater Township, may be getting kicked to the curb.
A report from the county’s solid waste management department is recommending council “discontinue development" of the ERCC "at this time.”
The report is to be presented Tuesday at the county’s committee of the whole meeting.
“The ERRC project made financial and operational sense in 2016-17,” Simcoe County Warden Basil Clarke said in a prepared statement.
“Based on the report and research conducted by staff, the entire solid waste management landscape has changed during the appeal period and we all know what inflation has done to the cost of construction," said Clarke, the mayor of Ramara Township.
“I believe it’s important and prudent that staff bring forward new information on any project,” he added.
The facility was to be located on Horseshoe Valley Road West in Springwater Township.
Committee of the whole will review the updated costs, considerations and options and provide direction for further review by county council.
“This is a good time to have this discussion based on new information in front of us, prior to any site work being completed and any major construction and engineering expenses are incurred,” Clarke said.
According to the report, the ERRC was initially pursued due to the significant benefit it was supposed to provide to the county, including the assurance that the county become self-sufficient and gain control of future organic management costs.
“The current reality is that the significantly increased capital and borrowing costs exacerbated by decreasing outside processing costs — potentially temporary in nature — of a county-owned and -operated facility are not justifiable at this time,” the report stated. “Therefore, staff do not recommend proceeding with the ERRC at this juncture.”
Springwater Mayor Jennifer Coughlin thinks county staff made the right recommendation.
“This project and its location, understandably, captured the attention of neighbouring property owners in our township, and we thank them for their continued engagement through this process,” Coughlin, who is also the county's deputy warden, said in a prepared statement. “Given rising construction costs and the changes within the waste sector, moving on from the ERRC project is the right thing to do.”
If council supports the staff recommendation, it will bring to an end a contentious project that got its start in 2010 when the county’s solid waste management strategy introduced the concept of a county-owned organics processing facility (OPF) and recommended a comparison be made against the external processing of organics.
The strategy also illustrated the need to secure long-term recycling and garbage transfer capacity of the materials management facility (MMF).
In 2012, an initial report determined the ERRC was a viable project for both the processing of organics (OPF) and the transfer of recycling and garbage (MMF). The OPF’s required capacity was determined as 30,000 tonnes per year, and it was estimated that an anaerobic digestion facility would cost $35 million in capital costs.
The process of selecting a site then began.
An initial financial analysis was completed in 2014 and found the ERRC was financially viable and a county-owned facility would have a payback period of six years.
In 2015, staff reviewed more than 500 potential sites and presented a short list to county council and to the public.
The following year, council selected 2976 Horseshoe Valley Rd. W., in Springwater Township, as the site for the ERRC.
In 2017, Ernst & Young Orenda Corporate Finance Inc. (EY) completed the original business case for the ERRC. They found comparable costing between a business-as-usual scenario ($130.3 million) and the development of a county-owned MMF and OPF utilizing wet anaerobic digestion technology ($137.9 million).
After 2017, technical studies for the ERRC site were completed and finalized, and planning amendment applications were submitted including County Official Plan amendments, local Official Plan and zoning-bylaw amendments.
While the province approved the county's Official Plan amendment, significant delays were encountered when three appeals were submitted.
In late 2022, official approval was received and the project was allowed to proceed.
According to the report, since 2017, there have been a number of changes that have caused the OPF portion of the ERRC to be less viable, including increased provincial organics processing capacity, reduced organics processing contract costs, an increase in the county’s organics tonnage and significant increases in construction and borrowing costs.
“All of these factors have led to an altered approach to the ERRC, as well as a significant increase in the expected cost,” the report stated.
Throughout 2023, staff worked with the technical engineering consulting firm GHD and financial consultants EY to update the technical and financial aspects of the ERRC project. The updates were mainly to reflect the change of scope, including the removal of the recycling transfer and truck servicing components of the facility.
These significant changes modified the scope of the ERRC to an OPF, an MMF for the transfer of garbage only, an administrative facility and an educational centre.
Additionally, it was determined that wet anaerobic digestion would be the preferred processing technology used at the site.
The two consulting firms reflected these scope changes within their reports, and incorporated updated building and processing costs that reflect the current markets.
A 20-year cost analysis was completed by EY, which compared the estimated capital and operating costs and revenues of the ERRC, to the current model of externally contracting organics processing.
“The results show that the ERRC would have an average cost to the county of $378.5 million, approximately $111.6 million more than if the county were to proceed with the (business-as-usual) scenario,” the report said.
“The (business-as-usual) costs were found to be grossly exaggerated as a recent competitive procurement released by the county has resulted in costing to be much lower than is currently paid for these services, so much so that the average cost of the ERRC ($378.5 million) would be approximately $221 million more than the (business-as-usual scenario) that reflects the new contract pricing," the report added.
While staff do not recommend proceeding with the ERRC at this juncture, they say they remain committed to finding cost-effective and environmentally responsible methods for managing the county’s wastes.
Prior to bringing the report to county council, staff also engaged in a competitive procurement for external organics processing capacity. The request for proposal (RFP) process identified both short- and long-term vendors who could provide significantly reduced costs for organics processing and hauling.
Staff is seeking council’s direction to proceed with the execution of both short- and long-term organics processing contracts that will secure the county’s needs for the next 23 years.
Additionally, if the recommendations are supported by county council, staff will start work on each of the following items:
- recommend a location for a waste management truck servicing facility and a cart and bulky facility, and subsequently construct and operate such facilities
- determine the best long-term organics transfer process and construct such a facility
- review options for the ERRC site, located at 2976 Horseshoe Valley Rd. W., in Springwater
- review the impacts of increasing the organics acceptance criteria to include plastic bags, diapers and/or sanitary products in future years.
Springwater Coun. Brad Thompson has been following the ERRC developments with interest over the past couple of years. It was a major election issue when he ran for township council in 2022.
He says he's been wondering why the county wasn’t progressing quicker, given the urgency the county expressed for this facility and the vigour they fought for it.
“I had a feeling something was up, but am surprised by the decision.” Thompson said. “It seems we have wasted a lot of taxpayers' time and money on waste.”
