Council hears questions about cost of planned city-run organics facility

The City of Saskatoon will build its own organics processing facility in hopes of ending a rocky beginning for the citywide organics program.

"Regardless of what decision is made here, there is going to be an increase in utility fees going forward whether we were with the original contractor or not," general manager of environment and utilities Angela Gardiner said.

A contentious 6-5 vote passed to build a 40,000-tonne capacity plant to process organics south of the landfill for years to come.

The cost estimated at $22.1 million, funded through a loan repaid by utility fees. According to the city's finance department, the cost to build the facility with five per cent interest over a 20-year loan is $13.1 million, totaling $35.2 million for the project.

"Rates fluctuate and an actual interest rate will not be known until borrowing takes place. The actual interest and repayment amounts will be determined at the time of borrowing," the finance department said.

Much of the conversation at Wednesday's regular council meeting was around making sure a city-owned facility would be the least expensive option for the city, and residents.

"In order for a third party to be cheaper than the city facility the tonnages would have to reduce significantly from what we're seeing today," Gardiner said.

Administration says a city facility is the cheapest option because third-party contractors charge based on a dollars-per-tonne basis. The city would be looking to recover costs with the green cart utility and not be seeking a profit. Gardiner said a city-owned facility would save residents $1.5 million to $1.6 million annually in processing costs.

However, Loraas Recycle, which currently has the organics contract for the city, wondered how administration would know current market conditions since it didn't ask for a request for proposals.

Loraas also wondered about the city's estimates after going more than 30 per cent over budget when it built its new facility in 2019 -- which was when the city last tendered a request for proposals.

"It's not really fair for you to report that the estimated cost you're presented with takes into account all of the complexities and variables that waste processing facilities may have to work their way through from conception to operation," Aaron Beres, a district manager with Loraas, said.

Like most major decisions in recent years, the council was divided down the middle on the issue.

"I think it's necessary to make the decision that's going to be the most cost effective for the residents that we represent. And by no fault of the administration, I don't feel like I have the information that I will require to make that decision here today," Coun. Zach Jeffries said.

"I can't recall a time where we've been presented with an option that can save residents $1.5 million a year and for counsel to find that to be inadequate," Coun. Mairin Loewen said.

Other councillors would have preferred more information on the current organics market in Saskatchewan before making a decision, while others wanted to provide certainty after a difficult start to the program.

"I think one of the things that's really pressing on me in this discussion is trying to get to a place of certainty. Both certainty in our products and getting the long-term success of this program," Coun. Hilary Gough said.

"I don't have enough information today. I cannot stand here and comfortably say that this is the lowest price for citizens," Coun. Darren Hill said. "It's the lowest price maybe based on just the information that's been provided to us today, but it is not the guaranteed lowest price."

Saskatoon launched its curbside organics program in May 2023. Just days before the program was set to launch, Green Prairie Environmental, the third-party contractor who was set to process the organic waste, was denied a permit to run its facility at its intended site roughly three years after successfully bidding on the contract.

The company owns a landfill in the RM of Corman Park and planned to compost adjacent to that site. However, the RM of Corman Park voted against giving a discretionary use permit, which left the city without a site to process compost and forced the city into striking a deal with Loraas.

Sending out another request for proposals and having a third party handle all organics would cost the city $4.68 million annually with a per green cart per month cost of $3.57.

A city-owned facility would cost of $3.1 million annually and a per green cart per month fee of $2.69, according to city projections.

Altogether, the cost to residents for a green cart would be $8.32 for a city-run facility compared to $7.78 a month under GPE's agreement.

The facility is expected to open in 2026.