Scathing audit reveals bungled management of Springhill landfill near Osgoode

Ottawasun.com
June 14, 2018
Jon Willing

The dismal relationship between the city and Tomlinson Group over the operations of the Springhill landfill has compelled auditor general Ken Hughes to suggest city bosses consider freezing the company out of future contract opportunities.

“We’ve never taken a step like this and made a recommendation this severe, this important,” Hughes said Thursday after tabling a damning audit of the Springhill contract. “But given the relationship that existed between the city and Tomlinson, we feel that it’s important that the city evaluate their relationship with Tomlinson based on the fact of their behaviour during the course of this contract.”

Tomlinson has more than $250 million in active contracts with the city, including those related to the downtown sewage tunnel, road reconstruction and transporting of liquid waste.

Michael Clement, general manager of Tomlinson Environmental Services, one of the company’s many divisions, said the firm values its relationship with the city.

“We have very strong relationships with the city. We have for numerous years and we want to continue to do so,” Clement said in an interview. “We won’t take that stuff lightly, for sure.”

The former Osgoode Township signed a contract with Tomlinson in December 1996 to manage the Springhill landfill. In January 1998, the township signed a separate lease with Tomlinson that allowed the company to run a construction and demolition waste recycling facility on the landfill site. The 2001 municipal amalgamation meant the City of Ottawa inherited the agreements.

According to the Springhill audit, the city doesn’t know if it’s owed money under the contract because there’s a lack of proper financial documentation. On top of that, the province’s environmental authorities investigating contamination have flagged the conditions of a nearby wetland as “one of the worst in the eastern region of the province,” the audit says.

The city, as owner of the 100-acre site, is contracted to receive 40 per cent of the net profit as royalties, with the rest going to Tomlinson. The city has only collected $6.3 million in royalties from Tomlinson over the 21 years.

A “remedial action plan” related to closing the landfill could cost between $7 million and $8 million, plus, there would be annual operating costs.

The city says Tomlinson should pay for it all.

“In our mind, everything that’s happening at that site is a result of the operation of that site, so we will be asking them to take ownership of that,” said Kevin Wylie, general manager of public works and environmental services.

The two sides only recently started talking to each other about it.

The city won’t know exactly how much Springhill will cost until it does more research over the summer.

A reserve fund was to pay for the costs of closing the landfill, but because the dump is filling up at a faster rate than the anticipated 2029 closing year, the account will likely not have the $1 million as planned, the audit says.

As of December 2017, the dump was 75 per cent full.

The environmental impact of the dump has alarmed the city and the Ontario Ministry of Environment. There were indications of groundwater problems in 2015-2016, but they were contained within the buffer properties Tomlinson purchased around the waste site.

Wylie said the city became more aware of the environmental impact last December. The city told Tomlinson to stop accepting garbage at the dump earlier this year, which the company did starting May 4. The land lease for the construction and demolition facility ends in October, and the city isn’t renewing it. The agreement on the dump, however, continues until the dump is full.

Osgoode Coun. George Darouze said there’s no evidence of a threat to drinking water wells. He has asked staff to monitor the groundwater up to almost one kilometre around the dump.

The audit says the city has failed to get Tomlinson to share financial information, which would help establish the royalty amounts.

Tomlinson disputes the accusation.

“I am not aware of any documents we did not provide to the city,” Clement said. He said he doesn’t believe the company has shortchanged the city in royalties.

The audit exposed lax oversight of the Springhill file at city hall. Wylie, who only became head of environmental services in 2016, couldn’t explain the lack of oversight between the 2001 amalgamation and 2010.

The city says it can’t disclose the results of a recent arbitration because of a confidential settlement with Tomlinson.

One of the questions in the arbitration was whether Tomlinson was giving discounts for waste brought to Springhill, which could affect the royalties paid to the municipality. The audit discovered 76 per cent of construction and demolition waste was from Tomlinson-related companies and 80 per cent of all the construction and demolition waste was processed at no charge. Tomlinson companies also received a discount on dumping waste into the landfill, the audit says.

“This was really a bad, bad contract from the start,” Wylie said. “It’s certainly a contract that staff would not even consider in this day and age. We’re really strapped with a contract that gives Tomlinson carte blanche to do what they want on that site.”

Coun. Allan Hubley, chair of the audit committee, said the behaviour exhibited by Tomlinson under the Springhill contract can’t be tolerated.

In 2011, Hubley sponsored a motion at council that gave the city the ability to blacklist poor-performing contractors.

“I’d hate to see Tomlinson get on that list because I know they do a lot of good things in the community and most of their work is good, so they’re a company that you only as a last resort would want to put on a list like that,” Hubley said.