Metro Hall
55 John Street
22nd Floor
Toronto, Ontario
Canada M5V 3C6
www.city.toronto.on.ca
Tel: 416-392-8768
Fax: 416-392-3821
Urban Planning and
Development Services
August 24, 1998
To:Urban Environment and Development Committee
From:Commissioner, Urban Planning and Development Services
Subject:Information regarding Vital Services in Rental Residential Properties in the
City of Toronto
Purpose:
Report submitted in response to a request from Council for information on the anticipated
actual financial loss from the provision of vital services when necessary under the current
legislation; and the ability of Toronto Hydro and other essential services to provide the
continuation of services under the same conditions as were previously applied to the "Urgent
Hazard Program" by the former City of Toronto (under the former City of Toronto Act).
Funding Sources, Financial Implications and Impact Statement:
Enacting a Vital Service By-law would require reinstating funding of $120,000.00 per year.
An amount of $60,000.00 was cut from the 1998 budget to reflect mid-year cancellation of the
programme as approved in the budget process. In addition, funds up to $900,000.00 per year
in the peak years could be required for payment of utility bills, with no assurance that these
funds would be recovered by the City.
The projected funding of $120,000.00 per year for administration of a Vital Services By-law
for the entire city is the same amount as expended for the former City of Toronto. It is
anticipated that should a Vital Services By-law be deemed necessary, it could be written with
associated operational processes and policies that would reduce administrative costs, by
having some of the administration carried out by the utility companies, or having them cover a
portion of the costs.
It should be noted that the new legislation would continue to allow a municipality to have
rents directed to the City until the debt is repaid. This rent collection process would likely be
costly to administer.
Recommendation:
That this report be received as information.
Council Reference/Background/History:
The former City of Toronto had an "Urgent Hazards Programme" (established under the
authority of the City of Toronto Act, 1936) , under which Utility bills which were in arrears to
the point where the Utility company planned to cut supply would be paid by the City, and a
lien registered against the property. This lien allowed for recovery of the funds as municipal
taxes. In the 1998 budget process, funds for administration of this programme were not
provided. None of the other former municipalities had such programmes. While the intent of
the programme was to protect persons at risk, there is a belief that it had evolved towards
acting as a tool of the utility providers for bill collection, or a lever in landlord tenant disputes,
rather than its specific intended function.
Following submission of a report to the Urban Environment and Development Committee and
considered by Council at its meeting of July 29, 30 and 31, 1998, I was asked to provide
information as to the financial impact on the City if a Vital Services By-law were enacted City
wide, as a replacement for the Urgent Hazards Programme, and on the ability of Toronto
Hydro and other essential services to provide continuation of services.
Comments and/or Discussion and/or Justification:
As a Public Utility, Toronto Hydro has by way of Section 31 of the Public Utilities Act the
power to establish a lien on a property with outstanding bills. Recovery of the funds by
Toronto Hydro under that legislation has the same priority as municipal taxes. Consequently,
Toronto Hydro has in that regard for the entire present City of Toronto, power equivalent to
that available to the former City of Toronto. Toronto Hydro could establish a bill collection
process for themselves which would virtually guarantee recovery of funds, and would not
require outlay of funds by the City. This would, of course, require that Toronto Hydro
establish a policy that they would use this process as an alternative to cutting of power in
those cases where cutting the power would put vulnerable persons at risk.
Only the former City of Toronto had an urgent hazards programme. While circumstance may
have arisen regarding cutting of utilities in other former municipalities, appropriate
mechanisms to deal with these circumstances were generally applied. As previously reported,
measures exist in the current (and draft harmonized) Property Standards By-laws to deal with
emergency situations. Public Health has, through the Health Protection and Promotion Act,
power to require or cause work to be done to alleviate situations where there is a health
hazard.
Under current legislation, while it is feasible to pass a Vital Services By-law with similar
provisions, the priority for recovery of the outlay would not be with the same priority as
municipal taxes. Consequently, there could be no guarantee that the funds would be
recovered. In extreme circumstances, this could amount to over $500,000.00 per year. For
1995, 1996 and 1997 the funds expended within the former City of Toronto were
$891,481.08, $246,761.07 and $323,823.38. The City Solicitor has reported earlier on what
would be required to establish a priority equivalent to taxes.
A review of the peak year of 1995 indicates that funds were expended relating to 376
situations. A number of these were multiple situations at the same property; i.e., in some
cases, utility bills were paid several times. About 70% of the situations related to Hydro, 22%
to Consumers Gas, and the balance to non-utility items. One payment related to a specific
problem property, and was $191,000.00. In subsequent years, one factor in the reduction of
funds expended related to agreements regarding administration of the programme in that
claims from Utilities would not be made in relation to relatively small amounts.
In addition to these amounts, there are administrative costs to the City. These were estimated
at $120,000.00 per year. In the 1998 budget process, there was a budget reduction of
$60,000.00 (half year impact) to reflect the approved cancellation of the Urgent Hazards
Programme.
By provision of early notice of potential problem situations, and through administrative
changes by Consumers Gas and Toronto Hydro, the number of urgent, or hazardous situations
could be minimized. While discussions with Consumers Gas indicate that they would have
some concerns about administrative changes which would provide somewhat earlier notice of
problem situations to the City, this could be required under a Vital Services By-law.
Consumers Gas has indicated some willingness to take over a portion of any administrative
process carried out by the City.
This principal concern in this matter is provision of heat in the winter. In that regard, the
Director of Municipal Standards has reviewed the policies of Consumers Gas. That company
advises that they do visit each problem property to determine if cutting of the gas supply
would put any vulnerable persons at risk.
Initial discussions have also taken place with Toronto Hydro and they did indicate willingness
to work together to develop processes to ensure protection of vulnerable persons. They have
also advised that processes have been developed in the balance of former municipalities which
have worked effectively.
Conclusions:
Staff are of the opinion that a Vital Services By-law should not be enacted. Other mechanisms
are available to address the risk to vulnerable persons without incurring the administrative
costs and uncertainty of recovery of funds advanced. With respect to Toronto Hydro,
legislation exists to allow them essentially the same power of recovery of outstanding bills as
under the Urgent Hazards Programme. It would be appropriate if they were requested to adopt
a programme to recover debts in a manner which does not either put vulnerable persons at
risk, or require the City to act as guarantor/ bill collector.
The policy of Consumers Gas referenced above does note that "gas service may be
discontinued only as a last resort", and the company advises that they would generally not cut
service in the winter where vulnerable persons would be at risk.
Prior to considering enacting a Vital Services By-law, should such be deemed necessary, it
would be appropriate for a working group comprised of representatives from Municipal
Standards, Public Health, and the relevant Utilities or fuel providers to establish policies in
respect to discontinuing service/supply, and to monitor these policies in action for at least one
year. It is possible to minimize the number of situations under
which Emergency Orders either under a Property Standards By-law, or the Health Protection
and Promotion Act, would have to be used by ensuring that the Utility companies provide
sufficient notice of planned cutoff to allow for proper evaluation of specific situations and
provide the opportunity to apply alternative solutions.
Establishing a Vital Services By-law under current legislation could put the City in the
position of having significant and potentially non-recoverable funds owing. The former City
of Toronto had between 1995 and 1997 paid between $300,000.00 and $900,000.00 per year
to cover utility bills. Should the programme be extended to cover the new city, this amount
would increase. These funds were not included in departmental budgets, but were requested
from general revenue to cover emergency situations. In addition, funds of up to $120,000.00
would have to be reinstated in an annual budget to cover administrative costs for the
programme.
Contact Name:
Harold Bratten, Director
Municipal Standards
Metro Hall, 22nd Floor
392-8768
VIRGINIA M. WEST
Commissioner
Urban Planning and Development Services
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