Water rates could be hiked as much as 2 per cent next year to pay for more than $1 million in new equipment, software and staffing needed to go after tenants who don't pay their water bills.
That's the conclusion outlined in a staff report coming to Cambridge council later this month at the request of Coun. Helen Shwery, who tabled a motion in May to have staff review the city's water billing policy because some landlords don't think it's fair.
The city's policy is to send delinquent water bills to property owners instead of going after tenants for payment.
It was established in 2015 "to minimize the need for water write‐offs" and "reduce collection costs incurred by the city."
Like many municipalities, Cambridge endorsed the concept of holding property owners financially responsible for all water‐related charges, regardless of who is the ultimate consumer.
For nearly the last decade, delinquent notices have been sent to landlords in a fairly streamlined process that ultimately results in notices being mailed to property tax mailing addresses.
If the process was to revert to the old way, reminders to pay would go to tenants, followed by multiple contact attempts, additional notices of disconnection and ultimately disconnection.
It would require equipment upgrades, software upgrades, program changes and hiring six new full time staff members at a cost of about $1 million annually.
Depending on which of two options council chooses, should they decide to go ahead with change, the operating impact would require a water rate increase of 1.8 to 2 per cent.
One option would introduce a specialty water meter into the advanced meter infrastructure network equipped with an integrated shut-off valve.
This would result in an incremental water rate increase of 2.3 per cent in addition to the projected 3.5 per cent increase, as forecast through the Water and Wastewater Long-Range Financial Plan approved by Council on April 30, for a total of 5.8 per cent.
A second option is to use a legacy process that the city used prior to 2015 and currently in place in comparable municipalities.
This would result in an incremental water rate increase of 2.5 per cent for a total of 6 per cent.
Tenant rights advocates endorse keeping the current policy because they believe sending delinquent water bills to landlords keeps them accountable for fixing leaky plumbing fixtures, which are often the cause of high water bills.
But landlords who delegated at a meeting in May said they think it's unfair the city holds them responsible for a tenant's unpaid water bills.
And they claim the option of recouping that money through the Landlord and Tenant Board isn't often effective because of a backlog of complaints.
Kayla Andrade, founder of Ontario Landlords Watch, supports the move to revert to the old system and told CambridgeToday it's not the business of the landlord to collect on behalf of a product produced by the city.
She said the move would also protect tenants because delinquent bills are one way landlords can force eviction and damage a tenant's credit rating.
That likely wouldn't happen if the city was requesting payment.
In presenting her motion, Shwery said the city has a responsibility to support businesses and the current water billing policy makes it tougher for businesses to be sustainable and profitable.
Councillors Scott Hamilton and Ross Earnshaw voted against the idea, citing the fact that landlords are in business to profit and should take on risk as part of their business model.
"What I'm concerned about is shifting that responsibility to the city so the city absorbs that particular loss while the landlord continues to profit. That is a hit to the taxpayers and the tax base and that's the concern that keeps coming back to me," Hamilton said.
City council will debate the issue July 16.
