City staff propose water bill deferral program

Low-income seniors and low-income residents with disabilities could ask for permission to defer their water-bill payments until they sell their properties if city council approves a new program proposed by staff.

The proposal, unveiled Tuesday in a report by the city’s finance department, would replicate an existing property-tax deferral program, which has been running for about 11 years.

Water and sewer bills have some of the highest year-over-year increases in the broader list of user fees charged by city hall. In 2018, the water rate increased by four per cent and the sewer rate by five per cent. The stormwater fee increased by five per cent.

If council follows a long-range plan to pay for drinking water and wastewater infrastructure, customers hooked into the municipal water and sewer systems should expect to see increases each year. Landowners paying a stormwater fee are also projected to pay more.

In 2017, residential properties on average paid $1,050 each in water bills. About 110 property owners qualify for the tax deferral program, and using that as a rough measure of the take-up of the proposed water-bill deferral program, the city figures $115,500 in water bill payments would be deferred annually.

There are 144,140 homeowners who are 65 years old or older, according to property assessment data collected by the city. Seven per cent of Ottawa homeowners that age are estimated to have annual incomes of $30,000 or less, based on Statistics Canada information. The city doesn’t have definitive data on the number of low-income seniors and people who are disabled.

Under the proposed scheme for residential properties to begin in 2019, successful applicants must be the owners. The low-income threshold for households is a maximum of $41,130.

The deferral, however, won’t be free. The city would charge interest of five per cent annually plus a fee for recording the deferrals on the tax roll.

Repayment of the water bills would have to happen when the property is sold, if the applicant no longer meets the requirements or when all the outstanding water bill amounts, fees and interest, plus any deferred amounts under the property tax deferral program, exceed 40 per cent of the property value. The amount would also be due if the applicant dies, unless a spouse qualifies under the deferral program.

The city hasn’t found another Canadian municipality that allows full deferrals of water bills.

The environment committee will consider the proposal during a meeting next Tuesday before making a recommendation to council.