Financial Risk

The service fee must remain fixed for the first 2 years of the 3 year agreement. There is a low risk that the wage increases and the landfill tipping fee increases will exceed the fee set. This risk has been mitigated by including an estimated wage and tipping fee increase in the fee provided for the first 2 years. Fees for subsequent years will be adjusted according to CPI and Fuel Price Index.

There is a low risk that revenue will be lost by not entering into an agreement. The loss in revenue will be minor, however should there be other revenue losses or additional service requirements that do not generate revenue, this small loss could contribute to a more significant financial impact.

There is a low risk of hold back from GECSB for a failure to comply with the terms of the agreement. The failure to comply is mitigated by the fact that the City of Windsor has two truck in its fleet and the service is offered 6 days per week.

Legal Risk

In the event that the City contracts to provide the services, the City will be obligated to provide those services in accordance with the agreement. Failure to do so could result in damages and litigation.

Financial Matters:

The average cost to collect a FEL waste bin is $29.00 per lift when costs to service both the County and the City schools are considered. This cost includes labour, equipment and landfill tipping fees. The agreement requires this fee to remain fixed for the first 2 years of the 3 year agreement subject to annual adjustments in any subsequent years equal to the CPI and average fuel prices for the twelve-months immediately preceding the date of the fixed 2 year period.

Currently, the City of Windsor provides FEL services to 11 GECSB schools, and realizes a yearly revenue of approximately $23,408. The City of Windsor also provides FEL services to 18 WECDSB schools, and realizes a yearly revenue of approximately $38,192. Not entering into these agreements will result in a budget shortfall related to this recovery revenue of approximately $61,600. Should the City not enter into agreement to provide waste collection services to the Boards, a budget issue will be required to decrease the current revenue budget resulting in a budget increase for Public Works. Should the City of Windsor enter into the agreement, an additional $138,978 in revenue will be realized at the increased fee of $29 per lift.

In addition to the regular ongoing operating expenses to provide the FEL service under this agreement, the City would be required to purchase 85 FEL bins and 4 roll off bins at a cost of approximately $86,187 including non-refundable HST. All bins will be purchased through the capital budget and will be repaid with annual payments from the Environmental operating budget over 7-years at a rate of $12,312 per annum plus applicable annual capital financing cost repayment.