When it comes to performing snow and ice management for Canada's municipalities and its provincial governments, one might apply the French adage: A vaincre sans péril, on triomphe sans gloire. Translation: "To win without risk is a triumph without glory." The phrase, coined by the 17th-century French dramatist Pierre Corneille, hits home for many snow removal professionals who view municipal work as a great opportunity for reliable revenue—and a pricey investment that is not without risk.
To even get in the game, private snow contractors must invest in multi-
million-dollar liability insurance policies and equipment specific to the municipalities' needs. Although these terms often are no different from larger commercial snow contracts, working with municipalities raises additional issues.
Strict standards
In Canada, demands on the private snow contractor by municipalities and provincial governments appear higher than standard commercial work.
"We perform snow and ice management to the very best of our ability no matter who we are servicing, but the municipalities are definitely stricter—and we make sure we do everything for them to a T," says Jim Cooper, owner of Nutri-Lawn in Fredericton, New Brunswick.
His company is currently contracted to perform snow and ice management for four of Fredericton's schools and one of the city's major fire stations, and is under contract with the provincial government to handle snow removal of several parking lots. His city requires private snow removal contractors to maintain $2 million in liability insurance.
Paul Vanderzon of Amenagements Paysagers Vanderzon, Inc., in St. Bruno, Quebec, says the $2 million insurance policy is required in his city as well. In addition, a private snow contractor must put up a performance bond for 50% of the cost of the contract or a certified check for 10% of the contract price. Contractors also can be "fined for failure to perform—$500 for the first offense, $750 for each subsequent," he explains.
Rising trend
Outsourcing of city and provincial snow removal appears to be on the rise in Canada, according to Brian Riddell, president and CEO of Integrated Maintenance & Operations Services, Inc., an associate company of The Miller Group, which is considered an industry leader in Ontario road and highway maintenance.
Faced with budget constraints, Riddell says, municipalities see outsourcing snow removal as less expensive, and they are "finding better value for their money compared to in-house staff." He also believes the increase is due to "in-house staff attrition."
Piloting a program in Calgary
Calgary, Alberta, is among the cities outsourcing snow operations. "We were just awarded a contract with the city of Calgary that represents our largest partnership with the city to date, by a significant margin," says Ken Ruddock, CSP, president of Urban Landscape Solutions (ULS) in Rocky View, Alberta.
It's the first time the city of Calgary has considered "using a private company to conduct snow removal operations on a routine basis," says Dean C. Bell, manager, roads maintenance for the city of Calgary. The contract is a two-year pilot program (a one-year contract with a one-year extension option). It will allow the city "to assess the effectiveness of the program without having to first purchase more equipment and hire more people," he says.
To qualify, bidders had to meet the city's insurance coverage requirement of $5 million and various certifications. The insurance costs will run ULS approximately $50,000 a year, Ruddock says.
The scope of work covers 650 of the city's 14,000 lane kilometers. ULS' responsibility is for "Priority Two and Three routes that have been deemed 'trouble spots' through a study that identified high collision areas, as well as roads with grades that are difficult for our transit buses to climb," Bell says.
The city, he says, assesses proposals using the "Triple Bottom Line," which looks not only at price, but also social and environmental considerations. "We are looking for a company with solid environmental and safety programs, as well as experience fighting storms," he says.
ULS will provide four dedicated units, with operators available for dispatch to the city. "Our units will be tandem-axle trucks equipped with belly-mount plows and state-of-the-art sanding/liquid applications," notes Ruddock. ULS is having the new equipment built at a substantial cost. With such a short contract term, he admits, it's a risk.
"While we do not view any disadvantages with this type of work, I suppose some of the issues we face are the significant investment we need to make on a test project that has the potential to end after one year," he says. The biggest challenge, Ruddock adds, will be "a sharp learning curve and trying to satisfy a client base of more than one million."
The push to municipalities is not new for ULS. It has provided snow melting services to the city of Airdrie, 30 km north of Calgary, and has handled snow maintenance for specific Calgary properties. However, the Calgary roadway contract represents the largest percentage of municipal work for ULS since its inception in 1989.
"Prior to this contract, municipal work accounted for 1% to 2% of our total snow and ice management services," says Ruddock. "This new contract has the potential to account for about 12%."
The city of Calgary's roads department will control dispatch and the supply, stockpile and loading of materials. "The city also dictates the type of materials applied, depending upon weather conditions," adds Ruddock.
Nutri-Lawn's Cooper says New Brunswick also dictates which materials are used for deicing. "One of the government contracts has a 'no-salt zone' for its sidewalks, so we use premium ice melt product there, which is more costly," he says.
Equipment requirements
Municipalities typically require outside contractors to maintain certain snow removal equipment such as combination units, plows, spreaders, graders and front-end loaders. "We had to have certain sized equipment to even qualify for the tenders," says Cooper, who owns three loaders for his municipal contracts.
This year, he found a means to offset his initial investment. "During the off-season, I'm leasing a backhoe to the province for six months, and I'm also leasing my loaders to a private contractor who uses them for his provincial work," he says.
For more than 40 years, Vanderzon's company had done it all in St. Bruno: sidewalks, the library, arena, police and fire station, City Hall, water pumping stations, bicycle paths and various other city-owned buildings. It serviced eight municipal properties that totaled nearly 8 acres and 31,752 sq. ft. of sidewalks and 10.32 miles of 8-ft.-wide bicycle paths.
"The trigger was 1 inch, with salting included," he says. "The city requires the contractor to have either a 100-hp agriculture tractor with a 9-ft., 9-in. pusher box or blade and/or a 4x4 truck equipped with a 2-yd. salt/sander spreader and an 8-ft. or larger plow for each site, in addition to the appropriate equipment to clear sidewalks, ramps, steps, etc.," he says.
In the past, the company has handled 52.58 miles of St. Bruno streets and 21.75 miles of its sidewalks. "The trigger was 2 inches, and no salting," Vanderzon says, "and once called, you were responsible for performing all the work within five hours." For this work, he says, the outside snow contractor is required to have two tri-axle trucks with a plow and side wing measuring a minimum of 14 ft., four-wheel loaders or 170-hp ag tractors with plow and side wings measuring a minimum of 14 ft.; and two 75-hp ag tractors or equivalent equipment with 4-ft. plows.
This year, St. Bruno put out to bid all its municipal opportunities for private snow contractors, "which included three- and five-year options, based on a seasonal price," says Vanderzon. The company lost out to three companies of similar size. "This will be the first year in over 40 years that we have no municipal contracts," says Vanderzon.
Increased competition
It's an issue many Canadian snow contractors are facing. The rise in municipal opportunities for outside contractors has meant a step up in the competition.
"We have seen the competitiveness increase greatly," says Vanderzon. Typically, St. Bruno's municipal work is bid on by local companies, but this year five outside companies sent proposals. "Two out of the three companies who won were from neighboring municipalities," he says. In the end, says Vanderzon, it was based on price.
"Most of the contracts went for 20% less than three years ago, and the street and sidewalk contract went for 50% less than five years ago"—even though the costs to do the work has increased, he says.
In New Brunswick, "it's highly competitive to get the work," says Cooper. "Government officials consider only the area's most respectable snow contractors and the best price, so we have to be really competitive with our bid to obtain the work."
Ruddock believes ULS ultimately won the Calgary bid because of its experience, its equipment fleet, SIMA membership and certified snow professionals on staff, and a logical operational plan.
For most professional Canadian snow contractors, "municipal work accounts for 10% to 50% of their total work," says Riddell. "As municipalities increase the outsourcing of winter work, contractors will likely increase the amount of their municipal work."
There is also a trend toward lengthening the contract period. "Most of the outsourced contracts are five, seven or even nine years," adds Riddell.
"In our area," says Vanderzon, "we are seeing contracts increase to seven years, with annual cost-of-living increases."
Complementary niche
For companies that win the bid, the extended contract term is welcome news. But for those who lose bids and make substantial investments in equipment to get in or stay in the municipal sector, the consequences may be devastating—particularly because many snow contractors say such accounts make for efficient work.
"We can easily clear the municipal areas in one pass during night-time events, since there are no vehicles to hinder us," says Cooper.
For Vanderzon's company, which does a substantial amount of residential snow removal, the municipal work represents additional efficiencies for his entire business. "It's beneficial for us to also control the way the streets are plowed," he says. "We often waste three hours per tractor following the plow, or just waiting for them to show up, which in one sector amounts to 36 hours per event wasted." Additionally, contractors who perform municipal work "can utilize their resources—trucks and operators—over a longer period of time," Riddell says.
Regardless of the upfront investment in equipment, insurance liability, potential fines and other contractual requirements, Canadian contractors all agree that municipal work has one great benefit: recurring revenue.
"A big advantage is municipalities pay on time, and there is no risk of not getting paid since the city of Fredericton and the province are in good financial shape," says Cooper.
Perhaps another adage applies to the growing municipal opportunities: no pain, no gain.
Debora Babin Katz is a marketing consultant and freelance writer. Her company, d.communications, assists companies in business development and effective sales and marketing. Contact her at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
