Collection of Service Fees -

Small Commercial Garbage Service

The Works Committee submits the joint report dated June 30, 1999, from the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services without recommendation, having regard that a motion recommending adoption of the report lost on a tie vote.

The Works Committee reports, for the information of Council, having:

(1)requested the Commissioner of Works and Emergency Services to investigate the collection of the fees from the landlord in a like manner to taxes, so that the landlord can collect from tenants; and further that the City Solicitor investigate whether landlords can collect from tenants in a like manner to business taxes; and that a report thereon be submitted to Council for consideration at its meeting on July 27, 28 and 29, 1999;

(2)requested the Chief Financial Officer and Treasurer to submit a report directly to Council on providing businesses with the option of making payments on a monthly basis;

(3)requested the Commissioner of Works and Emergency Services to submit a report directly to Council on the following:

(i)a standardized approach to waste collections, including frequency of collection;

(ii)services fees being tax-deductible; and

(iii)businesses having the option of reducing the number of waste collections from six or five times per week to three times per week; and

(4)further requested the Commissioner of Works and Emergency Services to report back to the Works Committee on:

(i)a program to educate businesses on the options available for reducing the number of their collections to a lower level; and

(ii)a plan, with costs, for the provision of recycling services for main street businesses with garbage collection two or three times per week.

The Works Committee submits the following joint report (June 30, 1999) from the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services:

Purpose:

To inform the Works Committee respecting the status of collection of service fees in 1999 from business operators currently receiving municipal waste collection services more than two times per week from the City.

Financial Implications:

Projected revenues in the amount of $2.3 million have been approved in the 1999 Operating Budget for implementation of service fees. The collection of service fees must be implemented this year in order to capture the 1999 revenues projected in the budget.

Recommendations:

It is recommended that:

(1)the Chief Financial Officer and Treasurer proceed with the billing and collection of service fees in 1999 on a pilot basis from business operators receiving three, five and six garbage collections per week;

(2)the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services report back as part of the 2000 Operating Budget on the pilot billing and collection program as described in this report and any changes required next year, including enforcement and operational issues;

(3)the current three times a week garbage collection service be maintained for commercial properties located on Lake Shore Boulevard West in the former City of Etobicoke; and

(4)the appropriate City officials be authorized to take all necessary actions to give effect to the above.

Background:

City Council, at its meeting of April 26, 27 and 28, 1999, as part of the 1999 Operating Budget, adopted a three-year phase-in plan to deal with small commercial garbage and recycling collection that includes the implementation of service fees in 1999 to all commercial locations currently receiving more than twice a week collection. For 1999, service fees of $150.00 for three times a week collection, $600.00 for five times a week collection and $800.00 for six times a week collection were approved for the existing small commercial locations receiving this service. Currently, three times per week collection is provided in specific commercial districts in the Etobicoke and York communities, whereas five and six times per week collection is provided to restaurants and green grocers in the Toronto community.

Council also instructed staff to consult with the Lake Shore Boulevard West Business Improvement Area on the possibility of reinstating twice a week garbage collection for commercial properties located on Lake Shore Boulevard West in the former City of Etobicoke and reverting the collection to Tuesdays and Fridays.

Discussion:

Service Fees:

The implementation of service fees for the collection of garbage from the small commercial locations currently receiving this service in the City requires the maintenance of a database containing information respecting the names and addresses of business operators and the frequency of collection per week. Since tax bills for 1999 have already been sent to property owners, the billing of service fees for garbage collection will be sent out separately. Since budget approval, staff have reviewed and considered whether to bill the property owner, directly bill the business operator, or to consider the issuance of specially marked disposal bags or stickers to identify the payment of fees for garbage set out for collection.

Staff from Finance, Legal and Works and Emergency Services have discussed the above-noted methods of collecting the service fees and considered the feasibility and requirements necessary to implement each during 1999. Legal staff have advised that under the waste management provisions of the Municipal Act (section 208.6), Council may establish fees for the use of any part of its waste management system. Under the service fees provisions of the Act (section 220.1) and the regulations enacted under those provisions, Council can only impose fees on persons who discard waste.

This can be contrasted to the special rate provisions of the Act (section 208.5) which allow a rate to be levied on the owners of land or buildings and to recover such rates in similar fashion as taxes. The special rate would be imposed on land according to its assessed value. Similarly, monthly rates can be determined and charged on the owners or occupants of a building to defray the expense of waste management and recovered in similar fashion as taxes.

Consequently, property owners could argue that, insofar as service fees are concerned, it is their tenants who use the system or discard waste and therefore should be billed. Nonetheless, Legal further advises that the City may have the option of passing a by-law as part of the regulation of its system which provides as a condition of commercial waste collection service to a defined area that landlords agree to receive the service and to be billed for service fees directly. This option may, however, result in property owners declining the service and tenants being forced to contract with the private sector or set out garbage illegally. The billing of the property owner/landlord also requires the cross referencing of property tax databases with the Solid Waste Management's commercial collection database. This option is deemed more complicated at this time, and could delay the collection of fees by one or more months. Staff have agreed to consider this option further for possible implementation in 2000 as part of the property tax bill which would obviate the need for separate billing and collection.

The second option, namely, billing the business operator/tenant directly, could be implemented more readily in 1999 and also complies with Legal's opinion that invoices should be sent to the business operators as they are generating and discarding the garbage and therefore using the City's service. This option could be implemented with minimal computer system changes for invoicing and requires that only the business operator database be updated. The Revenue Division of the Finance Department will invoice and collect the fees based on the information supplied by the Solid Waste Management Division's commercial collection database. To simplify billing and collection processes, it is proposed that no discounts for early payment or penalties for late payment will be applied in 1999. In addition, businesses will have the option of making two installments for the payment of service fees in 1999. Details respecting due dates and payment options will be included in a comprehensive brochure to be sent to business operators when invoices are mailed. A separate notice advising the business operators of the frequency of their existing collection service and the rates applicable in 1999 will be sent out shortly in advance of the mailing of invoices to allow sufficient time for recipients to advise the City of any change in the service requested. Therefore, based on Legal's advice and given the need to the implement the service fees, it is proposed to proceed with this option on a pilot basis in 1999 and report back as part of the 2000 Operating Budget on any changes required next year.

The last option considered was a fee-per-bag system. This option requires additional research and more time is needed to consider operational issues. The Commissioner of Works and Emergency Services was requested to report to the Works Committee by December 1999 on a fee-per-bag system of funding commercial garbage collection, and this will be the subject of a separate report at that time. Accordingly, it is premature to consider this option for the collection of service fees in 1999.

Commercial Garbage Collection Frequency in the former City of Etobicoke:

The illegal set-out of garbage on Saturday at the curb along the Lake Shore strip in the former City of Etobicoke by businesses and residents, has been a problem that numerous enforcement and educational initiatives have failed to solve. The Works Department of the former City of Etobicoke decided to move to three garbage collections per week (Monday, Thursday and Saturday night) for this area when the collection contract for the southern portion of Etobicoke was renewed in January 1997. This additional collection has led to less litter in this area. Staff have consulted with the Business Improvement Areas along Lake Shore Boulevard West, who have indicated that they would be prepared to return to twice per week on Tuesdays and Fridays. Staff, however, are still concerned that resumption of twice a week collection will again result in an unacceptable accumulation of garbage in this area, especially during the weekends. It is therefore recommended that the three times per week collection schedule be maintained.

Enforcement:

All Solid Waste Management related by-laws from the former municipalities are being revised and will be harmonized into one by-law for the new City of Toronto. This new by-law, which is scheduled to be brought to Committee for consideration in the spring of 2000, will address enforcement issues related to the collection of service fees. If the timing of the harmonized by-law is delayed, it may be necessary to prepare an interim by-law(s) to address enforcement issues.

Conclusion:

A method of billing and collecting service fees for the collection of garbage for small commercial locations has to be undertaken this year in order to bill the $2.3 million in revenues projected in the 1999 Operating Budget. To expedite the collection process, it is proposed that service fees be billed to the business operator on a pilot basis in 1999. A report on the pilot collection program and any changes required for next year, including enforcement and operational issues, will be submitted as part of the 2000 Operating Budget. In anticipation of an unacceptable accumulation of garbage along Lake Shore Boulevard West in the Etobicoke community, it is recommended that the current three times a week garbage collection service be maintained for commercial properties.

Contact Names:

Giuliana Carbone, Director

Revenue Services, Finance Department

Telephone: (416) 392-8065

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The Works Committee reports, for the information of Council, having also had before it during consideration of the foregoing matter a communication (July 12, 1999) from Mr. Terry Mundell, President, Ontario Restaurant, Hotel and Motel Association, providing comments with respect to the collection of service fees; requesting clarification on the periods for notification and invoicing, the criteria established for business operators to qualify for a change in service level, and the means of collection and verification of information for the database; and reiterating the industry's concerns that user fees are a temporary solution.