Item - 2021.IE23.6

The Infrastructure and Environment Committee recommends that:

1. City Council amend the City's Capacity Buyback Program eligibility criteria, effective January 1, 2022, to include:

a. customers whose property, or a portion thereof, is assessed on the annual returned assessment roll in the industrial property tax class (industrial customers), solely for the purpose of Parts 1b. and 1c. below;

b. the provision of one free water audit to industrial customers who have an annual water consumption of no more than 15,000 cubic metres per year; and

c. the provision of the one-time cash incentive for eligible permanent water savings measures to industrial customers who have an annual water consumption of no more than 5,000 cubic metres per year.

2. City Council delegate the authority to the General Manager, Toronto Water, to continue to establish, implement, administer, and monitor the Capacity Buyback Program including all related Capacity Buyback Program policies and procedures, and to make any future changes to the Capacity Buyback Program eligibility criteria as the General Manager, Toronto Water, considers appropriate on terms and conditions satisfactory to the General Manager, Toronto Water, subject to the requirement that any such future changes to the eligibility criteria for the Capacity Buyback Program be reported annually through Toronto Water’s Capital Budget submission.

3. City Council authorize the General Manager, Toronto Water to continue to prescribe any City form required for the Capacity Buyback Program Program, and to amend or revise such forms from time to time.

4. City Council amend Municipal Code Chapter Section 849-9 - Water and Sewage Services and Utility Bill, Annual verification of water consumption and sewage discharge as necessary, with respect to the Sewer Surcharge Rebate Program, effective January 1, 2022, to include the option of a tri-annual verification of water consumption and sewage discharge for Sewer Surcharge Rebate Program participants that meet the following requirements:

a. a participant has process metering at their facility;

b. a participant who is in arrears with regard to payments for water rates or sewer surcharges would not be entitled to the exemption; and

c. the percentage of water consumption and sewage discharge reported by the Sewer Surcharge Rebate Program participant in the preceding two annual verifications of water consumption and sewage discharge did not vary greater than 10 per cent year to year.

5. City Council authorize the General Manager, Toronto Water to undertake a review and stakeholder consultation on the Sewers By-law and Toronto Water's Pollution Prevention Program in relation to:

a. the potential use of risk-based thresholds for subject pollutant reporting;

b. evaluating the use of existing stormwater limits as potential threshold values; and

c. identifying emerging pollutants to be considered as subject pollutants.

6. City Council direct the General Manager, Toronto Water, to report back in the fourth quarter of 2022 to the Infrastructure and Environment Committee on the outcome of the Sewers By-law and Toronto Water's Pollution Prevention Program review and stakeholder consultation and any recommended changes to the Sewers By-law following completion.

7. City Council authorize the General Manager, Toronto Water, and the Chief Financial Officer and Treasurer, to consult with City water stakeholders, including residential, multi-residential, institutional, commercial and industrial customers, on the possible implementation of an administrative water charge beginning in the fall of 2021 and throughout the winter of 2022.

8. City Council direct the General Manager, Toronto Water, and the Chief Financial Officer and Treasurer, to report back to the Executive Committee on the outcome of the consultation of the City water stakeholder consultation on the possible implementation of an administrative water charge in mid-year 2022 following completion.

9. City Council authorize the necessary amendments to Municipal Code Chapter 849 – Water and Sewage Services and Utility Bill, and any other necessary Municipal Code Chapters as may be required, to give effect to City Council's decision.

10. City Council authorize the City Solicitor to introduce any necessary Bills required to give effect to City Council's decision and authorize the City Solicitor to make any necessary clarifications, refinements, including stylistic, format and organization, minor modifications, technical amendments or By-law amendments as may be identified by the City Solicitor, the General Manager, Toronto Water, and the General Manager, Economic Development and Culture.

The Infrastructure and Environment Committee:

1. Requested the General Manager, Toronto Water to submit a supplementary report to the July 14, 2021 City Council meeting, outlining:

a. possibilities for an enhanced information campaign regarding stormwater reduction;

b. possibilities for an incentives program related to stormwater reduction; and

c. required timelines for public consultation for a City-wide (all properties, including charge for residents, commercial and industrial) review for stormwater charge.

This report presents the outcomes of consultation with water users ("Consultation") on water fees, charges and programs designed to support business retention, economic growth, investment and employment and the goals of the City's Resilience Strategy. 

The Consultation was a multi-divisional initiative led by Toronto Water and Economic Development and Culture in collaboration with staff in the Office of the Controller, and the Policy Planning Finance and Administration Division.  Staff in Revenue Services, Technology Services, City Planning, and Environment and Energy Division were consulted in this initiative.

The Consultation comprised two rounds in Fall 2020 and Spring 2021 at which options to support the economic competitiveness of industrial and commercial customers, the City's Resilience Strategy goals, administrative efficiency, water conservation and broader environmental objectives were presented.  Consultation participants included industrial, commercial and institutional customers, environmental not-for-profit organizations, academia, and the consulting sector.

A broad range of options was developed by City staff and consulted upon based on City Council's prior direction and a review of best practices in other municipal jurisdictions on the following topics:

- current support programs for industrial, commercial and institutional customers;

- current policies and practices under Municipal Code Chapter 681, Sewers (Sewers By-law) with a view to achieving further administrative efficiencies;

- an administrative water charge;

- the possible decoupling of industrial and commercial customers’ costs associated with stormwater management from the water rate;

- a possible dedicated stormwater charge for owners of commercial parking lots;

- stormwater management incentives for industrial and commercial customers.

 
The options were assessed for cost impacts to water customers, City operational and capital costs and savings, resilience and environmental benefits, and implementation requirements.  The findings of the options assessment were presented in the second round of Consultation.

Based on the Consultation feedback and the outcomes of the options assessment, this report recommends certain changes to Toronto Water's current support programs for industrial, commercial and institutional customers which will streamline program administration, support water efficiency for customers, and provide the opportunity for additional cost savings to participating water customers.  Recommended changes include offering the Capacity Buyback Program's one-time free water audit and/or one-time cash incentive to certain industrial customers and incorporating a free desktop water audit in the Capacity Buyback Program's offerings to eligible participants.

In addition, for the Sewer Surcharge Rebate (SSR) Program for customers utilizing process metering satisfactory to the General Manager, Toronto Water, it is recommended that they be provided the option of a tri-annual verification of their water consumption and sewage discharge, instead of the annual verification of water consumption and sewage discharge currently required under Section 849-9. of the Municipal Code.

With respect to the Sewers By-law, this report identifies certain measures which will promote Sewers By-law compliance, help achieve increased administrative efficiencies and provide potential additional cost savings to eligible customers. Specifically, it is recommended that Toronto Water develop a Sewers By-law Navigation Guide and undertake a review of the Schedule 1 limits set out in the Industrial Waste Surcharge Agreement.  In addition, this report recommends further stakeholder consultation on the potential development of risk-based reporting thresholds for subject pollutants as part of a broader, future review of the Sewers By-law and Toronto Water's Pollution Prevention Program.

This report also provides the findings of an assessment (benefits, costs, implementation requirements) of water fees, charges and stormwater management incentive options considered through the Consultation.  These options include an administrative water charge, the possible decoupling of industrial and commercial customers’ costs for stormwater management from the water rate through a dedicated stormwater charge for industrial and commercial properties, a stormwater charge for owners of commercial parking lots, and stormwater management incentives for industrial and commercial customers.  This report recommends the City undertake consultation with all water customer classes on the potential establishment of an administrative water charge.