Summary#
Montréal city council unanimously adopted a position to award AON Parizeau inc. a three-year insurance-broker contract for a $1,225,000 surety bond for the Centre de traitement des matières organiques de Montréal-Est (Montréal-East organic materials treatment centre). It also approved an indemnity agreement with La Compagnie d’Assurance Saint Paul. The city’s position is for the agglomeration council to make the final decision at a later meeting.
- The bond is a financial guarantee required for the centre to operate as a facility that processes organic residual materials.
- The contract would cost $18,375, non-taxable. City staff say it would be awarded through a direct agreement, not a call for tenders.
- The indemnity agreement would cover the new bond and five existing bonds that name Travelers, following that insurer’s name change to Saint Paul.
- The bond amount is set according to the centre’s purpose and its stated processing capacity of 60,000 tonnes a year.
What it means for you#
- City and agglomeration: The city council has set its position; the agglomeration council makes the final decision later. If approved, the agglomeration would pay the contract cost from the Environment and Ecological Transition Service’s operating budget.
- Centre operator: The bond is required for the centre to operate. City staff say it ensures the city’s obligations under environmental law and regulations are carried out.
- Residents: The decision does not directly change residents’ services, fees, or requirements.
Money#
The proposed contract cost is a maximum of $18,375, non-taxable, for three years.
- City staff say the agglomeration would pay the full amount from its operating budget.
- Staff say the negotiated rate is $6 per $1,000 of bond coverage, with a 16.67% discount for a three-year bond.
- The $1,225,000 is the bond amount, not the contract price.
What is unclear#
- The materials do not give the terms of the indemnity agreement or explain what the city could have to repay under it.
- The materials do not say whether the agglomeration council will approve the city’s position.
Case for#
- The bond is required under the cited regulation for the centre to operate, and the city’s resolution provides for that guarantee.
- City staff say AON Parizeau’s program, developed with the Union des municipalités du Québec, offers municipalities a negotiated rate and a discount for a three-year term.
Case against#
- The contract would be awarded through a direct agreement, and the materials do not provide a comparison with other brokers or prices.
- The indemnity agreement also covers five existing bonds, but its terms and possible financial implications for the city are not provided.