The 85,000 flat rate accounts are generally residential buildings with less than four units. Flat rate customers are charged in accordance with the number of rooms and fixtures installed in the building as stipulated in Schedule "B, C and D" of the City of Toronto By-Law No. 356-1998. Flat rate customers represent approximately 65% of all customers in the former City of Toronto, however, their water consumption only amounts to approximately 23% of the total water consumption in the former City of Toronto.

It should be noted that the other former area municipalities in Toronto are all fully metered. There are approximately 452,000 water accounts in the new amalgamated City and the flat rate accounts of the former City of Toronto represent approximately 18.8% of these accounts while the water consumption of the flat rate customers represent approximately 6.4% of the total water consumption in the new City.

It should also be noted that the Council of the former City of Toronto adopted, in 1990, a Policy of Universal Water Metering whereby all new buildings must receive a meter as well as all buildings where the water service or the plumbing in the basement is being replaced. Furthermore, a public relations program for the voluntary retrofit installation of water meters was pursued by the former City of Toronto as part of an overall Water Conservation Strategy. In total, approximately 23,000 water meters have been installed since 1990 under this Program.

2.Benefits of Universal Water Metering.

The primary benefits of Universal Water Metering are the introduction of the user-pay principle, the advancement of water conservation and the opportunity for customers to reduce their water charges and save money.

There is no doubt that water is one of the cheapest commodities available to us - a litre of municipal water in the City of Toronto costs just 0.11 cents; 9.3 litres (two Imperial gallons) costs just one cent.

The low price for water is one of the factors permitting high water consumption in Canada and in Toronto. The average domestic consumption per capita per day in the new City of Toronto amounts to 274 litres. Domestic water consumption averages 215 litres per capita and day in British cities and 185 litres in cities located in France.

Clearly, if water conservation is to be promoted, then it is important that each customer is charged in accordance with actual consumption.

It should be noted that flat rate customers, as a group, pay their fair share for water and sewer services. A study carried out by the former City of Toronto in 1997 in West Toronto comparing water consumption and water revenue from metered residential customers with flat rate customers has shown that flat rate customers in that area, as a group, actually pay slightly more for water and sewer services than metered customers. However, it is clear that within the group of flat rate customers, there are considerable inequities. A single person household generally would consume less water than households with 2 or more persons, however, under the flat rate system, both customers would pay the same amount for water and sewer services if the number of rooms and fixtures in their buildings are the same. Similarly, customers who practice water conservation may pay the same water charges as customers who waste a lot of water. The advantages of water metering and of the user-pay principle are that individual customers will pay their fair share for water and sewer services, become more aware of the actual cost of the service provided by the municipality, and are given the opportunity to reduce water charges and save money by monitoring and reducing their water consumption and practice water conservation.

Experience in other cities has shown that water consumption will be reduced once water meters are installed. Experience has also shown that water consumption can be more significantly reduced if customers, at the time of the meter installation, are made aware of water conservation opportunities and are provided with water conservation retrofit devices such as low flow shower heads and toilet dams which reduce the amount of water used for flushing.

It is therefore proposed that the promotion of water conservation and the distribution and installation of water conservation kits be an integral part of the Universal Water Metering Program, as described in more detail under Section 3 below.

The water consumption reduction measured in percentage and quoted in the literature for other Cities who implemented Universal Water Metering Programs varies significantly, for example:

Town of Leamington and 16%

Town of Kingsville

City of Port Colborne 8%

Brockville15%

Kingston25%

The consumption reduction rates quoted for municipalities vary depending on whether water conservation is part of the program, how water rates are structured by municipalities and whether the consumption "rebound" effect has been reflected in the reduction figures.

Experience has shown that the initial water consumption reduction, immediately after water meters have been installed, generally will not be sustained and that there is a consumption "rebound" effect whereby water consumption will somewhat increase again over time.

Taking into account the experience by other cities, it is estimated that over the long term, the water consumption of current flat rate customers in Toronto will be reduced in the range of 5% to 15%, following the installation of water meters. This saving in water usage is equivalent to the water consumption of approximately 14,500 to 43,500 residents and would reduce the overall annual water and consumption of the new City by approximately 0.3% to 1.0% (1.4 million cubic metres to 4.3 million cubic metres per year).

The reduction in water consumption would provide water supply capacity for new development, serving an additional 14,500 to 43,500 residents or, alternatively, defer capital spendings for new water supply and wastewater infrastructure. On the other hand, it is estimated that the reduction in water sales will reduce annual revenues for water and services for the new City by approximately 0.7% to 1.5% ($3.0 million to $6.0 million). On the positive side, it should be noted that the reduction in water revenues to the City of $3.0 to $6.0 million is equal to the savings in water charges for the group of flat rate customers.

Since the implementation of the Universal Metering Program is proposed over a five-year period, the reduction in water revenues would also occur over a five-year period and, therefore, can be reviewed annually as part of the budget process.

1. Implementation of a Universal Water Metering Program

(1)General

The implementation of universal metering will require the full co-operation of property owners and residents involved and, therefore, the approach for the implementation must be carefully considered to ensure that any adverse side effects are minimized.

In some buildings, where the water service enters the front basement wall and the water pipe is exposed and of good condition, it will be relatively simple to install a water meter. In other buildings, the installation of a water meter will be expensive and disruptive to the residence because the water service may not enter at the front wall, it may be buried under the basement slab, the exact location of the incoming service may not be known, the internal piping may be concealed in walls or ceilings, the internal piping may be of poor condition, or the basement may be finished, making it difficult to access the piping and provide a suitable location for the water meter.

While public support for conservation and recycling efforts, as well as for environmental protection, has increased dramatically in recent years, it is also true that public concern over rising taxes and utility charges is growing. Therefore, while some customers readily volunteer, others are vehemently opposed to the installation of a water meter and may not be prepared to cooperate.

To ensure that the implementation of the Universal Water Metering Program adequately considers the concerns and needs of customers while meeting the City's goals, it is proposed that the program include the following:

(a)A Public Relations Program making residents aware of the initiative, its benefits, how it will affect them and how they can control and reduce their water and sewer charges by monitoring consumption and practising water conservation;

(b)Contacting of customers to arrange for initial inspection (where needed) and making appointments for the installation of meters;

(c)Installation of the water meters and instructions for residents on how to read water meters and monitor water consumption;

(d)Delivery and, where possible, the installation of water conservation kits in buildings where water meters have been installed;

(e)Follow-up and enforcement at properties where water meters could not be installed because of absent landlords, ongoing construction work, poor conditions of existing plumbing or lack of cooperation by customers; and

(f)Initial reading of water meters and consultation with residents where unusually high water consumption occurred due to leakage or unusual water usage.

The estimated average cost for each water meter retrofit installation based on the above services amounts to $247.00, including GST or $21.0 million for the total program based on current prices.

In consideration of the cost and the magnitude of the program, it is proposed to implement the program over a 5-year period as follows:

Naturally, the above program schedule is subject to approval of the necessary funding as part of the annual Capital Budget approval process and can be adjusted as required.

It should be understood that the above estimates are based on implementing the program on a block by block basis for one entire area. Installing water meters on an ad hoc basis across the City reduces productivity and result in higher costs. Therefore, the current voluntary Universal Water Metering Program of the former City of Toronto and the mandatory installation of water meters for buildings where the water service has been replaced will be discontinued. Customers who request retrofit water meter installations ahead of schedule will be required to pay a flat fee in the amount of $100.00 to cover the "out of step" installation cost. Of course water meters will continue to be installed by the City in all new buildings as per the current policy.

As indicated above, some customers are opposed to the installation of water meters and may not cooperate with the City. The implementation process will provide for adequate notification by letter (minimum three written notifications) as well as personal contact and will allow sufficient time for residents to comply with the mandatory meter retrofit installation. However, if customers continue to refuse the installation of water meters, the applicable flat rate water charges for such customers shall be increased 100% and a further 100% every three months thereafter.

(2)Water Conservation

As indicated above, the retrofitting of existing buildings with water meters offers an opportunity to promote water conservation to residents.

It is proposed to provide customers with one, free of charge, indoor or outdoor water conservation kit for each water meter installed and to offer additional water conservation kits at a cost of $15.00 per kit to customers with more than one bathroom.

Subject to the consent of customers, the water conservation kits will be installed by the City or its contractor at the time of the meter installation.

The City will also provide instructions to the customers on how to read water meters and monitor their water consumption.

Finally, at properties where after the first water meter reading cycle higher than normal water consumption has been determined, the City will provide consultation to property owners on how to detect water leaks and practice water conservation in order to reduce consumption and water charges.

(3)Request for Proposals

As described above, the implementation of the Universal Water Metering Program will require extensive public relations work and flexibility with respect to dealing with residents and property owners and arranging for the retrofit water meter installations.

The implementation of Universal Water Metering for approximately 20,000 customers per year requires a staff complement of 30 to 35 persons (e.g. public relations and administration staff, water conservation technicians, meter installations, certified plumbers, supervisory and administrative staff).

Complete Universal Water Metering Programs in a number of other cities in North America have been carried out under contract by private companies. There are several companies in Canada which have specialized in implementing such programs including all planning, public relations, delivery and installation of water meters and the promotion of water conservation.

Therefore, it is proposed to issue a "Request For Proposals" for the complete implementation of the 1999 Universal Water Metering Program to qualified contractors, subject to funding for this purpose being approved as part of the 1999 Water and Wastewater Capital Budget. The selection of the successful (preferred) proposal will be based on experience and available resources, proposed methodology with respect to planning, administration, public relations and water conservation as well as the quoted contract price.

(4)Water Meter Reading and Water Billing

Upon installation of water meters under the Universal Water Metering Program, initial meter readings will be undertaken by meter installers.

The period between the first reading and the second reading will be considered a trial period. Water charges will be computed based on the second water meter reading and communicated to customers for information purposes only.

In cases of higher than normal water consumption, the trial period will allow residents to reduce their water consumption, e.g. repair leak and/or practice water conservation. In addition, the City will provide consultation and assist residents in reducing their water consumption where necessary. The third reading of water meters will be utilized to generate water billings based on actual consumption.

As per City of Toronto specifications, all new water meter installations are provided with remote reading devices attached to the outside wall of the building. Meter readers obtain the information from the remote reading devices utilizing hand-held, computerized interrogators. Information is down-loaded from the interrogators into computers for processing of the water bill at the water revenue office.

Reading an additional 85,000 water meters will require additional meter reading staff. Alternatively, water meter reading and billing could be carried out in conjunction with the meter reading and billing of Toronto Hydro and/or Consumers Gas.

Furthermore, water meters could also be read by residents who then phone-in the information to the City or enter it on a postage-free postcard addressed to the water revenue office. This approach is currently being used in the former City of North York and was at one time also used in the former City of Etobicoke.

It is proposed that staff of the Water and Wastewater Division and the Water Revenue Section of the Finance Department undertake a study to analyse feasible options to carry out water meter reading and billing efficiently and effectively and that the City Treasurer and the Commissioner of Works and Emergency Services report to the Works and Utilities Committee on such options.

Conclusions:

There are 85,000 residential water customers in the former City of Toronto which are currently charged for water and sewer services on a flat rate basis. While the flat rate accounts represent 18.8% of all water accounts, their water consumption amounts only to approximately 6.4% of the total water consumption in the new City.

As part of the required harmonization of water and sewer rates across the new City, it is proposed to introduce Universal Water Metering and implement the phasing out of flat rate charges. The primary benefits of this initiative are the introduction of the user-pay principle, the advancement of water conservation and the opportunity for customers to reduce their water charges and save money.

The estimated cost of a five-year Universal Water Metering Program to retrofit all 85,000 customers with water meters amounts to $21.0 million. It is estimated that the implementation of the program would reduce water consumption by an amount equivalent to the water usage of 14,500 to 43,500 residents. This would allow serving additional development with water or deferring the construction of new water supply and wastewater infrastructure. Water revenues for the City would reduce in the range of 0.7% to 1.5% ($3.0 to $6.0 million) as a result of phasing out of flat rate charges . However, on the positive side, the reduction in water revenues to the City equals savings in water charges for the group of flat rate customers. Funding in the amount of $5.0 million for the implementation of the 1999 Universal Water Metering Program has been requested as part of the 1999 Water and Wastewater Capital Budget. It is proposed that subject to the approval of the necessary funding, a "Request For Proposals" be issued to qualified contractors for the complete implementation of the 1999 program; including, public relations and administration work, promotion of water conservation and the supply and installation of water meters.

The additional water meters will increase the cost and the staffing requirements for the reading of meters. This increase will occur gradually over a five-year period. It is proposed to investigate the feasibility of reading water meters jointly with Toronto Hydro and/or Consumers Gas or alternatively to have residential customers read water meters and transfer the information through phone-in or on pre-paid postcards to the City's water revenue office.

The implementation of the Universal Water Metering Program will affect more than 70% of all households in the former City of Toronto. Therefore, it is proposed that this report be forwarded to the Toronto Community Council for their consideration.

Contact Name and Telephone Number:

Werner Wichmann, P.Eng.

City Engineer

Works and Emergency Services

Toronto Community Council Area

Phone: (416) 392-7703

Fax: (416) 392-0816

email "wwichman@city.toronto.on.ca"

Michael A. Price, P.Eng., FICE

General Manager

Water and Wastewater Services

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