Water and wastewater arrears in Norfolk have spiked since the COVID-19 pandemic was declared in March.
Norfolk backed off on collection efforts while the community adjusted to the pandemic shutdown and its economic impact.
However – effective Jan. 1 – Norfolk staff recommends the county move to a collection model that applies unpaid tenant arrears against a landlord’s tax bill. If approved, this would bring Norfolk’s collection policy in line with Brant County and Haldimand County.
“Aggressive collection efforts were suspended,” tax collector Sue Boughner says in a report that was to be considered at Tuesday’s meeting of Norfolk council. “Service disconnection was also halted to ensure citizens had adequate water supply for hygienic purposes. During this period, tenant arrears increased significantly.”
Norfolk County has incurred significant costs in recent years due to difficulties collecting tenant arrears. In her report, Boughner says water arrears totalled $385,920 at the end of 2018 and $457,000 at the end of 2019.
By the end of October, treasury staff estimates arrears will be in the range of $771,000.
The proposed remedy would attach tenant arrears, after 60 days, to a landlord’s property tax bill. Landlords, in turn, would be encouraged to work out arrangements that hold tenants ultimately responsible.
The staff report contains a legal form titled “Tenant authorization to release account information to the landlord.” This form would be filed with ERTH Solutions, the company that oversees water billing on behalf of the county. Once a tenant gives authorization, landlords can request account information on demand.
Another option is for landlords to request a deposit to cover water arrears as they arise.
Norfolk County also has the option of cutting off water service to multi-residential buildings that have dedicated, multiple shut-offs. In the case of multi-unit buildings with a single pipe at the property line, the county would ultimately have to resort to an attachment to property taxes to avoid penalizing others on the property in good standing.
“Property owners and their tenants are well aware of the counties’ policies,” Boughner says. “Property owners know they will not be held accountable for arrears if the account is in the tenant’s name.
“Tenants of multi-units with single service are aware services will not be disconnected and have no regard for their consumption or any intention of settling their account. Arrears listings often contain repeat tenants.”
Staff says it is not fair for other ratepayers to compensate for tenants who don’t pay their water bill. Staff also points out that writing off the cost of water and wastewater services to businesses that don’t pay up is an unfair subsidy paid by those who honour their obligations.
“Many municipalities have transitioned to adding uncollectible tenant’s arrears to owner’s property tax account thereby eliminating write-offs, collection expenses, and administration costs,” Boughner said.
“Not only is this practice beneficial to the municipality, it provides fairness for all ratepayers. It is unfair that property owners are held accountable for their own consumption and also make up the shortfall created by another property owner’s tenant.”