TORONTO —; A recent auditor general’s report reveals that missing information within the water collection database and a lack of procedures for prioritizing high-value overdue accounts is partly to blame for the more than $26 million dollars yet to be collected from businesses and homes in Toronto.
“You’re absolutely right if you’re suggesting that it’s quite remarkable that so much money is in arrears to the city,” said Councillor Josh Matlow, who sits on the Audit Committee.
“It just seems like we’re not just leaking water, we’re leaking money.”
Some water accounts have overdue balances that range as high as $300,000, according to the report by Auditor General Beverly Romeo-Beehler.
The length of time some of these accounts have been outstanding is also surprising.
“As at Aug. 31, 2015, approximately $3 million was outstanding for two or more years,” the report reads.
“Some accounts have been outstanding for over 10 years, with a few accounts having balances outstanding since 1999.”
One commercial account holder had a balance owing of $106,500 and failed to make a single payment since the account was set up in early 2014 according to the report.
The city uses the money it collects to upgrade vital, aging water infrastructure – repairs expected to ring in at around $5.6 billion over the next 10 years.
The missing money is also forcing the rest of Toronto to pay the cost, according to the Canadian Taxpayer’s Federation.
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“In January, we had our water rates go up by eight per cent. That’s about $72 dollars a household,” said the CTF’s Ontario Director Christine Van Geyn.
“So effectively here in Toronto we’re subsidizing people who don’t pay their water bills because the city hasn’t been effectively collecting [the balances] on them.”
The City of Toronto bills around $1 billion annually for water usage from its 490,000 commercial and residential water accounts. In 2015 residents used 307,105,017 cubic metres of water, and Wards 27 (Toronto Centre-Rosedale) and 20 (Trinity-Spadina) used the most, according to data from the city.
“The Auditor General’s report highlighted that $15.2 million was past due more than 60 days,” said city Treasurer Mike St. Amant. “Given that water billings are approximately $1 billion per year, this represents about 1.5 per cent of annual billings. Collection on water is better than other utilities as the City has the ability to collect overdue accounts by adding them to the property’s tax bill.”
But Romeo-Beehler found that $15 million in unpaid water bills, outstanding for more than 58 days, were not transferred to property tax rolls for collection. “While a portion of these accounts were not transferred for legitimate reasons, we estimate that interest and fees in the range of $1 million to $1.5 million have been foregone,” she wrote.
After finding the holes in the system, Romeo-Beehler made 19 recommendations to city council to improve billing procedures, including the following:
Request the Director of Revenue Services to develop a report identifying high risk and high value accounts;Request the Director of Revenue Services to develop a report to identify missing information in water accounts and ensure accounts are updated;Request the Director of Revenue Services to develop criteria for assignment of long overdue accounts to third-party collection services;Request the Director of Revenue Services, in consultation with the General Manager of Toronto Water, to evaluate options for restricting the supply of water on large overdue accounts where all other available collection measures have been exhausted;Request the Director of Revenue Services to develop a formal dispute resolution process and reporting criteria for disputes that remain unresolved for an extended period of time.
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