Winter woes

With the winter season closing in, the County has less than half of its winter plow routes contracted

Abusy summer season is coming to a close. Children have returned to school. Winter is just months away, and the County currently has less than half of its winter plow routes contracted.

Previously, R.R. Byford and Drew Harrison Haulage provided plowing services on roads that are designated winter service level 1 (most frequented). By the close of the tender period this past July, Drew Harrison Haulage Limited was the only company to submit a tender and the bid came in at an initial cost of $671 per day standby and $671 hourly. Staff went back to Harrison and negotiated a lower rate of $500 per day and $500 per hour, an estimated $2,849,750 per winter season or a 256 per cent increase from the previous contract.

Still unhappy with the proposed rate, staff sought an alternative and found Brighton’s QBT Excavating Services had four trucks and were willing to take four of the County’s ten routes at a cost of $200 per vehicle per day standby and $225 per hour operated per season on an eight year term. The estimated cost is $497,800 per season.

Debate was heavy around the horseshoe last week, with many councillors questioning how this large of an increase could be passed along to the taxpayer.

Councillor Jamie Forrester wondered if the tenders were too difficult to fullfill “What restrictions are we putting out to people that they have to come back with that sort of an increase? Is there anything special that we said they had to do? This is totally unacceptable. Where would we ever come up with this money?” said Forrester. “We are basically buying this guy’s fleet in two years. Maybe we have to play hardball with them.”

Commissioner of Engineering, Development and Works, Robert McAuley, explained that the County insists that all trucks be newer than 10 years old. “I’m not sure I can answer what have we done, because all we have done is insist on trucks less than 10 years old, which is not out of the norm for the industry. And that is strictly for reliability. It’s absolutely imperative that those trucks run 7/24 on those routes.”

Councillor Steve Ferguson also questioned the tender requirements. “This is the kind of stuff that just drives me crazy,” said Ferguson. “In the tender, the specification of the age of the trucks seems to be a stumbling block and a considerable issue. If the 10-year-old truck requirement had not been in the tender, would it have affected the results?”

McAuley explained that there wasn’t a lineup of bidders, and that staff had not heard from other contractors with older trucks. “To us it’s a reliability issue. At 10 or 15 years old they break down as much as they run, and on key routes that’s a problem. We are required to respond by law, and we can’t respond if the truck is broken down in the shed somewhere.”

Ferguson also asked if the contracts could provide a provision that the supplier would have to meet a performance obligation or risk being penalized.

“They are required to be inspected and calibrated every year,” said McAuley. “What the councillor is suggesting is already part of the contract. The question is the age of the vehicle from a capital investment point of view I guess. Would somebody with a 15- year-old truck be open to the bid? We’ve said no. If council wants, we can retender and open it to 15, I’m not sure how that would change the bids, if it would at all.”

Mayor Robert Quaiff defended McAuley and County staff for doing their best given the situation. “The tender went out under our procurement bylaw and the process for tendering. When it came back we had one company tender. One company only. It was out of sight. It was 338 per cent up from the previous year. I think staff did their job by getting in touch with that contractor and saying we have a problem, you expect us to take this to this council and get approval?” The mayor also wanted to stress that the County doesn’t have a procurement problem. “I don’t believe we have a bad procurement process or tendering process, where we are noted as being the villain and that everyone is putting up their contract price up by 10 to 15 per cent because we are Prince Edward County. I just don’t buy that.”

Many councillors were wary of locking into long contracts, and passing the burden onto the next two terms of council. McAuley explained to council that locking into a contract allows the County to implement a plan to acquire 10 trucks and 24 drivers of its own. “I tend to take the position we should be internalizing. But this is what council and the County has chosen to do. It has been fine up until this year. The last contract we awarded four years ago was right at the tipping point, more or less, between and internal cost and an external cost. This one is clearly throwing it the other way. And the contractor was told, he’s killing the golden goose.” If there is a silver lining to the strategy of internalizing, there is more road work that could be done.”

Councillor Kevin Gale couldn’t bring himself to support the motion and wanted to see further negotiation from staff. “We are dealing with a contractor that does a lot of work with Prince Edward County in a lot of capacities. So, personally speaking, I think there should be a little bit more negotiation. There is definitely a perception, and a very accurate one, that we are in a corner with no way to get out. In the same token we are accountable to ratepayers. But I think we have to retender or do something. This is just an unacceptable amount. I think this is a situation where the past has caught up with us, unfortunately,” said Gale. “Someone is laughing all the way to the bank at our expense.” Councillor Gord Fox agreed with that sentiment. “I feel we are in hostage negotiations here. I think we have to go back to the source and ask the service provider to explain and or justify this increase to the taxpayers.”

Councillor Bill Roberts wondered if thinking outside of the box was a good approach. Roberts asked the commissioner if he had been comparing the County’s costs and practices to other municipalities in the province.

McAuley reminded council that this is part of his job. “We routinely fine-tune our operating practices to try and save the County money. When I compare ourselves to the performance measures of our peer groups, we are right in the range of the cost to maintain a kilometre of road. Where we have difficulties is we have 2,200 lane kilometres for 25,000 people. That’s where the problem happens. We have a disproportionate number of roads for our population to support. And we are of very few in the province that have that circumstance.”

Council awarded four winter plow routes to QBT Excavating for an eight-year term at an annual cost of $497,800. It then passed a motion that staff be directed to negotiate with Drew Harrison Haulage Limited and report back, bearing in mind the overall relationship of the proposed contractor and the corporation. In the meantime, the winter season creeps closer.