STAFF REPORT

To: Works Committee

From: Barry H. Gutteridge , Commissioner, Works and Emergency Services

Subject:Garbage and Recycling Service Fees for Small Commercial Locations

- 1999 Results

Purpose:

To inform the Works Committee about the 1999 results for the collection of recycling and garbage service fees from small commercial business operators receiving municipal waste collectio0n servuices more than two times per week from the City.

Financial Implications and Impact Statement:

Service fee revenue in the amount of $650,000.00 has been received out of the total 1999 invoiced amount of $1.49 million. Service fee revenue of $2.3 million was originally identified in the 1999 Operating Budget. The 2000 Operating Budget includes $1.5 million in fee revenue and an expenditure of $120,550.00 to administer the service fee program.

Recommendations:

It is recommended that the procedures set out in Appendix 1 of this report be adopted for enforcement of the collection of outstanding service fees for commercial locations receiving three or more garbage collections a week.

Background:

City Council, at its meeting on April 26, 27 and 28, 1999 adopted a three-year plan to phase in service fees for commercial locations receiving three or more garbage collections a week. Currently, three times a week garbage collection is provided in specific commercial districts in Etobicoke and York Community Council areas, whereas five and six times a week collection is provided for approved restaurants and green grocers in the Toronto Community Council area.

Existing eligibility criteria in each of the Community Council Areas were to be maintained until the end of the year 2000. Council also directed that any business may reduce its number of weekly garbage collections, provided it is able to store its waste on-site in a manner satisfactory to the Commissioner of Works and Emergency Services and the Medical Officer of Health. Service fees were to be phased in according to the following table:

 Table 1

Annual Garbage and Recycling Service Fee Schedule

 A joint report dated June 30, 1999 from the Chief Financial Officer and Treasurer, and the Commissioner of Works and Emergency Services for consideration by the Works Committee at its meeting of July 14, 1999 (Item No. 2), indicated that as part of the 2000 Operating Budget, a report would be forwarded to the Works Committee on the 1999 Program results and changes required for next year (2000), including enforcement and operational issues.

 Discussion:

 The implementation of service fees for small businesses receiving three or more garbage collections per week first required an accurate list of businesses receiving the service. The former City of Toronto maintained a file of businesses, mainly restaurants, that were approved to receive five or six garbage collections a week. The Etobicoke and York communities provide three times per week garbage collection to selected commercial districts to alleviate garbage accumulation on the streets. No list of commercial locations was maintained for these areas, and it was necessary to physically visit each location to construct a list of eligible businesses.

 In August 1999, notifications were sent to businesses listed as receiving more than three garbage collections a week. The notification explained the service fee schedule and the 1999 service fee based on our record of current weekly collection frequency for that business. A "Change of Service Request Form" was also included with the notification providing the business owner or manager with the means to correct the outlined information or request a change of service (reduce or increase garbage collection frequency). The deadline for requesting a change in service was stated in the notification as September 17, 1999, but was later extended by one month.

 The following table shows the number of businesses that were notified and the consequent change request and other associated activity from September 1, 1999 to December 31, 1999:

Table 2

1999 ICI Service Fee Activity Summary

 As shown in Table 2, 3857 businesses were notified in August of 1999 of the pending service fee invoices. In response, 1817 Requests for Service Change forms were received, requiring some form of service review. Approval was given to 1056 businesses (27% of businesses notified) to have their collection frequency reduced to two times a week. Consequently, these businesses were not subject to 1999 service fees. An additional 226 businesses were removed from the list (83 use private contractors, 143 were out of business, etc.), resulting in 2575 businesses eligible for 1999 service fees out of the original 3857 businesses notified in August.

 The high level of requests for reduction in service for Etobicoke and York businesses (77% and 41% respectively) was expected. It was noted early in the project that Saturday evening garbage collection to alleviate garbage problems in the specific areas of these communities is not solely due to commercial garbage. Many businesses generate small quantities of garbage and some operate only from Monday to Friday. Only 2 out of 424 requests for service reduction were denied.

 The response from the Toronto CCA businesses was unexpectedly high with 1249 businesses (44% of those notified) requiring some form of service review. As shown in Table 2, businesses requesting and approved for two times a week collection totalled 634 (22% of those notified). Only 14 requests for reduction in service were denied. Requests for changes in service from Toronto restaurants have continued into this year, at times exceeding 50 requests per week.

The restaurant business is volatile with frequent ownership changes, closures and new openings. Maintaining an accurate and current list of businesses with changing service level requirements for service fee invoicing purposes has proven to be a challenge.

A total of $1,487,160 in 1999 service fees was invoiced to commercial locations with $652,998 or 44% of the total amount invoiced received from these accounts as of February 10, 2000. Approximately 1,420 businesses out of the 2,534 billable locations invoiced for service in 1999 have not remitted any payment to date. In response to the low service fee recovery level, the enforcement procedures set out in Appendix 1 of this report are being recommended for approval by Council as the actions to be taken in relation to non-compliant accounts.

As part of the harmonization of all services in the City, staff has been instructed to bring forward to the Works Committee for its June 2000 meeting, a report with recommendations in regard to standard eligibility criteria for commercial recycling and garbage collection services, and standard service fees for the entire city. The following issues will be considered in the June report:

 (1)Criteria for determining the eligibility of a business for municipal collection and the level of service based on some or all of the following attributes:

-Building size, stories, area, etc

-Building type (retail, mixed retail/residential, restaurant, etc.)

-Property attributes (frontage, area, etc.)

-Business size (area, garbage generation, etc.)

-Business type (restaurant, green grocers, etc.)

-Density of commercial district based on average frontage, average ground floor area, etc.

(2)Merits of charging the owner of the property rather than the owner or operator of the business.

(3)Recycling collection options with respect to frequency of collection and types of material collected.

 Conclusions:

The existing three-year phase-in plan to implement the service fees for small commercial garbage and recycling collection will continue in order to capture the $1.5 million in revenues projected in the 2000 Operating Budget. To expedite the payment process, it is essential that enforcement procedures be taken for businesses that do not pay and continue to set out garbage on non-collection days.

Contact:

Andrew Pollock

Director, Policy and Planning

Solid Waste Management Services

Works and Emergency Services

Phone: 392-4715

Fax: 392-4754

E-mail: apolloc@toronto.ca

General Manager

Solid Waste Management Services

Commissioner

Works and Emergency Services

AMS:AMS

(ici-rev.doc)

APPENDIX 1

ACTIONS TO BE TAKEN IN RELATION TO NON-PAYMENT OF SERVICE FEES FOR COMMERCIAL BUSINESSES RECEIVING SOLID WASTE COLLECTION THREE OR MORE TIMES A WEEK(1)The Commissioner of Works is authorized to notify delinquent accounts and to take action pursuant to such notification as follows:

(a)Accounts 60 days overdue shall be notified that payment must be received immediately to maintain their current level of garbage collection service; and

(b)Accounts 90 days overdue shall be notified that the City's solid waste collection service will revert to two collections only per week with the reduction in collection service to commence three weeks after the date of the notification should the outstanding payment not be received by the City within two weeks of the date of the notification. The reduction in collection service shall be in addition to the rights of the City to enforce payment by court action.

(2)Businesses shall continue to be subject to all enforcement procedures under any of the City's by-laws relating to the handling of residual solid waste. In particular, without limitation, businesses which continue to set out garbage on non-collection days will, after appropriate warning, be subject to existing By-law enforcement procedures in each of the former municipalities. The procedures may include issuance of Certificates of Offence (Part 1 tickets) and/or a summons.