The City of Barrie’s Scenario Impact Analysis in Preparation for Transitionadmin
After much anticipation, the Ministry of Environment, Conservation and Parks (MECP) has announced next steps related to Ontario’s Blue Box Program. The MECP has indicated that over the next six years, Stewardship Ontario (SO) will be required to develop a transition plan, in consultation with municipalities and other key stakeholders, that will see producers take over full control and funding of the Blue Box program by the end of 2025.
While this announcement provides some clarity around the timing for when Ontario will move to Full Producer Responsibility (FPR), there is still uncertainty in terms of how the transition will be implemented and potential impacts to municipal waste services. This uncertainty has been a significant issue for municipalities since the passing of the Waste Free Ontario Act (WFOA) in 2016, as municipalities continue to plan, budget and provide on-going services without knowing their role during, and post-transition. The City of Barrie (Barrie) was no exception.
In 2018, Barrie and the CIF retained RSM Canada (project #1041) to develop a planning tool to assess the financial and operational impacts of potential transitional scenarios that could occur in the coming years based on the draft amended Blue Box Program Plan (aBBPP) presented in 2017/2018, and additional information provided by the MECP, SO and the Association of Municipalities of Ontario (AMO). At a crucial decision-making stage with its current waste collection contract set to expire in 2022, Barrie had to begin planning for the long-term to determine if a contract extension should be negotiated for all services, or to break-up the services to allow for flexibility to transition the recycling program.
Planning for the Future
The project team identified a wide range of transitional scenarios that could occur and ultimately narrowed it down to the five (5) most likely to occur:
- Scenario 1: Status quo (current operation being provided by the City)
- Scenario 2: Non-transitioned community (50% funding based on net costs)
- Scenario 3: Transitioned community (City acts as contract manager for SO responsible for collection, meeting performance standards and contamination thresholds)
- Scenario 4: Transitioned community (SO fully responsibility for collection, processing and marketing))
- Scenario 5: Individual producer responsibility (IPR)
For each scenario, the project team had to consider not only the financial impacts but also operational impacts (e.g. would residents still be able to recycle the same set of materials at the curb) and environmental impacts (e.g. would Barrie divert more materials from landfill). To do this, Barrie staff worked with RSM Canada to develop a scenario based impact analysis model.
What was Needed?
The model development was broken down into four phases.
- Phase 1: Project Initiation
- Identified gaps, risks & scenarios for modelling
- Phase 2: Data Collection
- Identified requirements for each scenario, relevant data sources & a data collection plan
- Collected data (e.g. Datacall, contractual details, administrative costs)
- Phase 3: Financial Modeling & Analysis
- Developed current operational & financial flows
- Assessed operational changes
- Phase 4: Reporting
- Summarized results & key findings
Phase 1 and Phase 2 became the most critical elements as they required Barrie staff to assess and identify key priorities and objectives. In addition to financial impacts, Barrie also wanted to assess potential operational impacts (e.g. potential reduction in service levels to residents at the curb, potential increase in services at the depot to prevent diversion rate reduction). To begin developing the model, the project team developed a Scenario Analysis Framework (see figure below) to identify expected operational and financial impacts.
The framework enabled staff to determine key priorities and objectives to ensure the model would be able to assess the impacts to eligible (direct) and ineligible (indirect) costs for each scenario. Key considerations include assessing the costs associated with meeting performance specifications set out by Producer Responsibility Organizations (PROs), be they SO or another organization, as well as potential impact of terminating the City’s contract with its service provider prior to the end date.
Once completed, the model provided key pieces of financial information related to eligible and ineligible Costs. These costs include:
|Eligible Costs||Ineligible Costs|
|Blue Box Program Contract Costs||Additional Garbage Collection Costs|
|Municipal Costs||Additional Landfill Costs|
|Administration Costs (may be capped depending on scenario)||Waste Connections Break Contract Cost|
|Revenue||Municipal Costs (e.g. management of blue box materials under scenario 4)|
|Administration Costs (dependent existence of a cap or the provision of BB services in transitioned scenario)|
“Participating in the MODEL development offered a learning opportunity that allowed us to clearly define and understand every financial and operational impact associated with our curbside waste services, their interrelatedness and a final analysis that was not expected.
As we move forward with the proposed changes in service delivery, the MODEL will assist in communicating recommendations to our senior management and Council.”
Output from the Model is Sensitive to Transition Timelines
Using available information, initial analysis identified a scenario that provides the best financial outcome over the other scenarios; however, these results are highly dependent on transitional timelines. For example, if transition were to occur before the existing waste collection contract expires, the City would have to absorb an early termination cost. To ensure that staff could continue to refine and update the model with new information, developers incorporated a dashboard shown below, that allows for further refinements.
Additionally, the model tracks assumptions for each scenario. This will permit further customizations and refinements should the city’s key objectives change over the years. This will become incredibly beneficial to the City as it updates the timeframes in the model based on the future regulatory/policy announcements.
Now that there’s a bit more certainty around the timing of when transition will occur, the City will be reviewing its waste management collection strategy for post 2022. Having already gathered much of the data and analyzed the various scenarios through the model, the City will be prepared to make an informed decision when SO will release their plan for transitioning municipal programs in 2020. Additionally, the model can also be used by the City to provide comments during the consultation process for developing the transition plan. For other municipalities, the obvious benefit of the model is clear. Most will be able to input their individual program information directly into the model and obtain a summary of impacts from the transitional scenarios. If you need assistance in using the model, please feel free to contact us at the CIF.
For more information: