So, what are you doing to prepare for the proposed amendment to the Blue Box Program Plan (a-BBPP)? The Regional Municipality of Niagara (Niagara) is preparing, with the assistance of CIF staff and funding, by completing an EPR business case analysis of its MRF and associated assets.
The business case analysis involved market valuations of the MRF’s equipment, land and building. The analysis also entailed a business market valuation, work that is currently in progress with RSM Canada (CIF Project #1017). The business case analysis will allow Niagara to identify the most economically advantageous option for the delivery of recycling processing and marketing services over the short to medium term (two to 10 years), which may include a possible divestiture of the MRF. Regional staff noted “this work will answer a number of our questions, and although there is a subset that will still need to be addressed, this process allows us to flesh out a couple of advantageous strategies that will help us prepare for change and develop recommendations to fulfil Council’s directive to investigate and evaluate opportunities regarding the MRF, pending transition to full EPR.”
The starting point for the project was the basic question, “What is the current market value of our recycling business and assets?”
In order to effectively carry out the work, it was beneficial for the project to be broken into the four phases described below. This allowed for the engagement of different and specialized external expertise at each phase. This resulted in separate and competitive procurement processes with the fourth phase yet to be completed, based on the output of the third phase and status of the proposed a-BBPP.
Phase 1 – MRF Market Appraisal of Buildings and Land
In the first phase of the project, a market appraisal of the MRF’s buildings and land was carried out. The development of a detailed, clear scope of work was a challenge as no existing template was available for a MRF appraisal, which was seen as a more specialized assessment versus the standard land/building appraisal. CIF staff assisted Niagara with development of an initial scope of work for an RFQ and Regional staff refined the workplan in conjunction with a private sector appraiser. A MRF land and building appraisal Sample RFQ is now available on the CIF website. The consulting cost of this phase of the project was $5,000 (taxes and expenses not included).
Phase 2 – MRF Processing Lines and Systems, Rolling Stock and Equipment State of Repair Assessment and Valuation
Phase two involved a valuation of the MRF’s processing lines and systems, rolling stock and equipment with a state of repair assessment. CIF provided the draft scope of work based on previously funded projects, which accelerated progress and required only a limited amount of customization to reflect Niagara’s requirements. In addition, Niagara having a comprehensive equipment/rolling stock list, recent CAD drawings and knowledgeable MRF staff available to address the valuator’s questions, was critical to ensuring a good deliverable and timely completion of the work.
A MRF equipment valuation Sample RFQ with equipment scope of work and MRF equipment inventory template are now available on the CIF website. The consulting cost of this phase of the project was $12,000 (taxes and expenses not included).
Phase 3 – MRF Business Valuation, Strategic Option Evaluation and Market Analysis (Project #1017)
In the third phase, a processing business valuation and strategic options evaluation and market analysis (Project #1017) was carried out. Understandably, the development of the RFP for the business valuation was difficult based on the uncertainty concerning the role of municipalities in the Province’s EPR framework. Details on an EPR transition plan, impact to recycling collection and processing contracts, definition of the service delivery framework and potentially, compensation for assets, were not available at the start of this project.
However, shortly after the RFP award and initiation of the consultant’s engagement, the business justification and some core assumptions for this phase began to evolve with the release of Stewardship Ontario’s draft elements of the a-BBPP. Ultimately, the results of the analysis will provide Niagara with the professional information and research needed to aid their decision-making process.
A MRF business valuation Sample RFP (template for consulting work to obtain a business valuation, strategic option evaluation and market analysis for a MRF processing business) and a Sample RFP proposal evaluation template are now available on the CIF website.
And phase four? Well, stay tuned as this work will be determined based on the output of the third phase and status of the a-BBPP.
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