The city's auditor general is condemning many of the practices in the contract between city hall and Orgaworld for the processing of kitchen waste.
The 20-year contract, which was signed in 2008, allows Ottawa to send up to 80,000 tonnes of kitchen waste to the Orgaworld plant yearly at an annual cost of $8-million.
But the city has never come close to reaching that minimum.
The auditor-general's report, released at city hall Wednesday morning, says there were key documents and information missing about how city staff came to the estimation we could send that much to the Orgaworld facility each year.
And city staff made serious errors in the data they compiled.
In reality, Auditor General Ken Hughes says Ottawa can only generate between 12,000 and 57,000 tonnes of organic waste each year, not 80,000.
The city won a dispute with Orgaworld to allow leaf and yard waste to make up the difference.
But Hughes says the city can process that waste for $16 a tonne on its own, not the $104 a tonne charged by Orgaworld.
According to Hughes, the city has paid Orgaworld nearly $8-million that wasn't necessary.
"Ottawa has been paying a premium to send some of its leaf and yard waste to Orgaworld on one hand while not being able to meet guaranteed volumes at the plant on the other," said Hughes in a statement. "Together these penalties to date total $7.7 million."
That figure does not include the $1.7 million in external legal fees taxpayers also paid during to fight the arbitration battle. Hughes said if there was better documentation by city staff, that figure could have been close to $1 million less.
One veteran city councillor says he and his colleagues dropped the ball when it came time to sign the contract.
Councillor Peter Hume says while city staff might have drawn up the contract, councillors should have taken a closer look.
The audit into the green bin project was launched in 2011.
Hughes makes 10 recommendations in his audit, all of which have been agreed to by management.
The recommendations include terminating the contract with Orgaworld and considering other alternatives, like building a city-owners facility or a new contract with another supplier.
City manager Kent Kirkpatrick says it would cost between $8-million and $10-million to escape the 20-year contract.