In October 2023, the Town of Cobourg confirmed a decision to change how the cost of Stormwater management would be recovered. Instead of embedding in taxes, it would be a fee related to usage. But the formula adopted to decide on the fee was unfair to some property owners and setting a fully comprehensive fee knowing runoff for every property would be onerous and costly. But responding to complaints, the Town put the fee collection on hold – at least for some people – and commissioned a review. At the Council meeting on 26 June 2024, Council decided to implement Option B of the resulting consultant’s report – basically, this mandates a fairly low flat rate for all residences and higher amounts for large Commercial, Industrial and institutional properties.
In my case (a condo townhouse), my rate will go up from $23.88 per year to $87.35 per year. To be clear – all residences, farms, vacant land and cemeteries will now pay $87.35 per year – this is a big reduction for many. But Commercial, Institutional and Industrial property types above 0.040469 Hectares (1 acre) will pay $2,102 per hectare although the wording of the by-law is not clear. Exempted from paying are Town owned properties and Schools. Properties in industrial parks (Northam and Lucas Point) are “factored in”; that is, they pay the fee. Not exempt are churches with properties larger than 1 acre. The unclear wording was highlighted in a presentation by Dick Kauling so Nicole Beatty moved to amend the motion to approve the By-law such that when rates are adjusted for 2025, that the enabling bylaw consider Dick’s suggested changes. Dick’s list of changes was not made available to the public.
The new bylaw is effective 1 January 2023 and one provision of the new by-law is that refunds for people who have been charged more than provided by the new by-law would be refunded the excess. There are 1601 properties eligible for refunds with 1260 of them with refunds less than $300. To reduce the administrative load of writing cheques and mailing them out, the bylaw provides that only those owed more than $300 would get cheques, The others would get a credit on their bill.
A presentation by Colline Bell said that she was happy with the new by-law except that she wants all those owed refunds to be sent cheques. However, Council passed the by-law unchanged.
Another item on the meeting Agenda was to consider who should do the billing of water, wastewater and stormwater: LUSI as now, the Town or a third party identified with an RFP? The review was no doubt prompted by a new draft Billing Services Agreement from Lakefront Utility Services Inc with increased rates. The idea of looking at options was raised by the Treasurer Adam Giddings and Lucas expressed appreciation for the effort by Staff to try and find cost savings. The estimated cost of having the Town do the billing would be $174K per year instead of LUSI at $223K per year. The cost of a third party would be determined by an RFP. This does not include start up costs in the first year and includes hiring an employee dedicated to billing. (Download the full analysis in Resources). But when it came to choosing, with little debate, Council chose to stay with LUSI with an updated re-negotiated contract.
Resources
Option B – as described in Consultant’s report
Flat rate for all properties up to 1 acre (0.040469 hectares) with additional charges for land area in excess of 1 acre for Commercial, Industrial and institutional properties
Previous Cobourg Blog articles
- Cobourg to now start billing Stormwater fee – 9 October 2023
- Stormwater rate review – See addendum 22 June 2024
- Stormwater Fee Schedule to be reviewed – 2 February 2024 – includes info on objections by taxpayers.
Other Links
- Download Consultants report (review) – pdf
- Download enabling by-law
- Download Billing Services Options report
- Video of Meeting – this topic starts at 5:12:50.
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So, the storm sewer charge will now be $87.35 for all residences, farms, vacant land and cemeteries. This may be a reduction for some, but another ‘tax’ increase for most. As an example, I live in an average, single family house and am presently billed $5.05 per month ( $60.60 per annum). Another money grab! On another note, include the amount in our tax bill rather than outsource collection at additional cost. This whole endeavor has been a fiasco from the start!
Let’s forget about fixing the east pier and give it to Parks Canada or the feds or Province
Obviously Cobourg has failed to handle it
Failed??? We ain’t got the doe! Taxes already took high!
It is a 20+ years problem and so ya ‘council(s)’ have failed us.
Why is it so expensive for LUSI or anyone else to collect this fee? LUSI already have our billing set up. Surely adding a line to our bills can’t be that ridiculous. It feels like a money grab. Yes the infrastructure needs work and maintenance but the collecting of a fee can’t add that much work to a process. I’d also charge more to rental properties. The amount of rent being collected from houses in the town of Cobourg that have been turned into duplexes is insane and of course they’re gonna turn around and charge this to the tenant probably both of them so they can double dip
Actually, Kathy, LUSI doesn’t have billing setup for all property owners. Often, renters rather than the property owner pay for water/electricity. Some properties have no dealings with LUSI at all since they have no electrical service or pay to Hydro One.
Why do you think that the amount of stormwater runoff from a property (the essence of calling it a “fee” rather than a “tax”) is determined by the rent charged? Surely the impermeable area of a property doesn’t vary with the rent!
Adding the stormwater fee to the property tax bill is the only reasonable approach for collection. Both the property tax and stormwater fee are paid by the property owner, The property tax collection system has everything setup to send bills to all property owners. The stormwater bylaw even specifies that unpaid stormwater fees are to be collected via property tax. Most billing related issues will apply equally to property tax and stormwater fees so additional clerical effort would be minimal if the bills were combined. There seems no justification for involving LUSI in collecting stormwater management fees.
Town Staff don’t want to do it.
The whole Water Bill should be under the Public Works Dept. at the Town. And the Hydro should be paid direct to Hydro One. Get rid of Holdco/Lakefront convoluted tax grab system. (Somebody must be making a pile of money – but it ain’t the taxpayer). Absorb the people we already pay at Lakefronto to the Town’s Public Works Dept. Like they do almost everywhere else.
Kathleen,
Environmental (sewer) is a departmental business unit within Public Works. Waterworks is an orphan. It is also a departmental business unit of the Town, but it doesn’t belong to any department. It’s not even on the Town’s org chart. The Town owns the assets, liabilities revenue and costs of both Waterworks and Enviro. The Town indirectly owns the electrical distribution business (LUI) through Holdco.
With regards to billing, LUSI is simply an outsourced contractor. LUSI is also contracted to operate the Town’s water system (Waterworks).
LUI has the license for electricity distribution in Cobourg. I have participated in two of LUI’s cost of service OEB hearings and have found that, for the most part, LUI is well run and the their distribution fees are lower than most, including Hydro One.
The charge for electricity (not distribution) is simply a pass through from Hydro One. LUI makes no profit from the electricity “sale”.
The numbers don’t support your suggestion of a “tax grab”. There could be some modest savings by elimination Holdco (the holding company) and the Town directly owning LUI and LUSI.
Ken,
I don’t believe that property value or size are the best proxies for property tax or storm water. However, that’s what we have currently.
The SW costs (ops & cap) are part of the levy and prior to 2023 were funded by property tax. Funding by a tax was (is?) appropriate as the SW system benefits all. SW fails most of the criterial for being a “fee”. This was clearly outlined in Colleen Bell’s delegation to Council
As a partial consequence of the province mandated asset management system requirement, Watson determined that the Town’s SW system was significantly underfunded and needed $1.6M+ annually. If this additional funding requirement was added to the levy and therefore property tax, the levy increase would have been 14%. With an election pending, this was not acceptable to the Council of the day.
Billing the SW fee (tax) on the Town’s property tax bill did nothing to hide the increase. Better to adopt a “now you see it, now you don’t tactic”. The solution, bill SW on the utility bill and hope the residents don’t connect the dots.
The resulting SW billing fiasco clearly shows that the tactic didn’t work.
Now that option B is in place and is satisfactory to most, I agree with Ken that the SW fee/tax should be billed as part of the Town’s property tax billing. The Town has the resources (system & staff) in place to do this and the cost increase would be nominal.
A billing agreement between the Town and LUSI for Waterworks and environmental (sewer) needs to be put in place. The costs presented by LUSI seem high and should be closely reviewed by “experts”
Condo storm water fees – who decides on rate for each condo unit – a municipal employee? Criteria? Are all condos in Cobourg charged same rate whether they are “towers” or “ground level” townhouses? I haven’t seen any reference to these fees being charged to the condo corporations rather than individual owners.
But you ARE the Corporation. If you pay monthly fees to your Budget, you are paying already. If you want your Corporation to pay, they will only increase your monthly fee to compensate in the Budget.
The old SW bylaw provided that condo owners were charged an equal portion of the total SW fee for the entire complex (total/ # of units) The billing is made to the individual “property” owner, not the condo corp.
I’m not sure if this was carried forward into the new SW bylaw.
All of this is “as clear as mud”. Still no idea who actually calculates the fees for a condo development. Criteria? Ground area occupied by development, number of units, etc? Multi-story condo buildings have smaller footprint than townhouse complexes but more units. But are all condos charged the same?
Terry Ashcroft,
You wrote “who decides on rate for each condo unit”.
Staff does (likely on the advise of a consultant), and approved by Council.
As set out in the Town bylaw 056-2024, appendix B, the flat rate for all property types is $87.35 per year. Commercial/industrial/institutional property types above .040469 hectares pay an additional $2,102.
“Property Type” means the grouping of property codes, as assigned by the Municipal Property Assessment Corporation (MPAC), that have a similar runoff coefficient ie. commercial, industrial, institutional, agricultural/Vacant, residential (low density), residential (medium density), residential (high density).
There is nothing specific about condos as there was in the previous 2022 SW bylaws.
And the self-serving illusion continues. If collection of the SW “fee” had been passed to the Town instead of remaining with LUSI, any justification for calling it a fee instead of a tax would be gone. What about that “cost saving”?
Good point. And why is another person required to collect this fee. Add it to our tax bills which are already set up. No need to be paying anyone to collect the fee.
I agree. Sometimes someones’ bright idea, only causes turmoil. The fee should have stayed as a tax inclusion and no one would have been the wiser.
Tucker,
The SW cost was (and is) part of the property tax levy. The funding and the amount is what changed. SW cost was about $400K per year. Watson suggested that the Town needed $1.6M+ annually to cover the SW asset repair and replacement costs.
The previous council, in an election year and facing a 14% levy increase, chose to “divide and conquer” (or now you see it, now you don’t) strategy. In 2023, the $1.6M SW fee was removed from the levy in the hope that Cobourg taxpayers wouldn’t connect the dots.
And “Watson” is a consultant that we (the taxpayers) paid to come up with this strategy? “Watson” has no interest in the Cobourg property owners or how the Town is run or what the result of their “opinion” would be. How much did we spend to get their “opinion”? Could the “elected officials” that were appointed to run our Town not come up with an answer of their own?
Tucker,
I think you are expecting too much from Council members. They do not have the experience or expertise in this and many other areas. That is what staff is supposed to do. Staff is responsible for Town operations.
Could staff have come up with a SW solution on their own? Perhaps.
But staff likely doesn’t have the expertise or resources to do this sort of work.
There is also the cynical view that staff want to avoid risk and having to take ownership.
Better to have a consultant to blame.
That said, there are “expert” residents in Cobourg who could been used. The quality of the work shown by the numerous SW delegations is evidence of this.
Option B is largely a result of the work done by the SW delegations rather than Watson.
Town staff and some officials gave Watson a revenue target and dictated how to meet it. Watson acted as 3rd party launderer, took the dictation, labelled it “equitable”, and collected a handsome fee…twice.
$50k. Right, Bryan? It was election time. I did not vote for the Councillors who voted to hire Watson.
Kathleen,
I think $50K for Watson’s fee is about right. There is also a fee for the “rework” that hasn’t been disclosed.
Wow. Re-work? You mean, Screw-up don’t you? And we have to pay for it – again.
Regarding SW as a fee or tax: the billing/collection entity is not relevant. The SW charge is a TOWN creature, and the Town is totally responsible for it, not LUSI who is simply a hired contractor.
I don’t believe that town owned properties such as Northam and Lucas Point are exempt. See https://pub-cobourg.escribemeetings.com/FileStream.ashx?DocumentId=42812 page 702 of 710 which lists public schools as the only exempt properties.
That said, it appears that town staff have chosen to not bill those who lease town properties such as Memorial Arena (curling club and others), Fire Hall Theatre, Northam (Wheetabix, Cameco, V13, Fare Share, etc). In addition, other businesses such as William Academy are not being billed. This increases the charges for the rest of us and must be corrected.
Information in the Post is taken from words said at the meeting. Specifically, in response to a question from Adam Bureau, Adam Giddings said that properties at Northam have been “factored in” and “they are being charged”. Go to 5:33:30 in the video. Presumably the same applies to Lucas Point Tenants. Perhaps they are paying indirectly through some method? As I have said, the by-law wording is not clear – it seems that Staff are taking direction from Council but they have not accurately documented that. Councillor Miriam Mutton also agrees that Northam tenants will be paying.
John, I’m confused!
You reported that town owned properties are exempt. Mr. Giddings said that town owned properties are not being charged but that Northam is being “factored into the analysis” (whatever that means). The billing data that I obtained through an Freedom of Information (FOI) request indicates that Northam, William Academy, the Fare Share Food bank, the curling club at Memorial Arena and others are not being charged. Appendix A of the bylaw only exempts schools covered by the Education Act.
It seems a simple question: Are all properties paying their fair share?
The by-law as written is in disagreement with what was said at the meeting.
There should be No special Benefits to Town Tenants
This would be unfair to other Landlord s who have to
compete & pass these cost along to their Tenants as TMI costs
This is unfair competition with the Private sector
The Town already has the Cheapest Industrial Rents and price per serviced acre of land in the area .
Again special offerings , pricing and privileges should
Not be available to a select cherry picked few .
Again are the Tax payers supporting the Towns tenants
by way of lower than Market pricing I believe so.
The only way to know, is if the rents increase accordingly.
All else is obfuscation.
Andre,
Unlike residential rents, commercial/industrial rents are for longer terms (5-10 years) and are not subject to rent controls. Annual rent increases are very rare. Common area charges cover services like snow clearing, ground maintenance, property tax and other specifically listed charges. A stormwater fee is unlikely to be listed. A stormwater tax may be chargeable, depending on the wording of the lease.
To further complicate matters, Municipal Act sec 106 prohibits “bonusing” by the municipality. If Town business units such as Northam, marina, campground, CCC, Heenan & Memorial arenas, Waterworks, environmental, and parking are not charged the SW fee/tax, private sector businesses that are charged the SW fee/tax could take legal action against the Town.
The Mayor claims this is ridiculous as it would be the Town charging itself. This is true on a full entity basis. However, departmental cost allocation is a very common practice and the Town does it, particularly in regards to departmental wage allocation. The business units should and can pass the SW cost on to their customers (higher fees, full cost recovery), so the net to the Town is revenue, not cost.
Watson reported wide variation (none, a few, several) in the SW exemptions provided by the municipalities Watson polled.
As Ken notes, Williams Academy appears to not be charged the SW fee/tax even though it is a private school and not covered by the education act exemption.
The stormwater fee/tax issue is complex and not likely to be resolved by a simple one size fits all solution.
Council should be commended for approving option B. It seems to work well for the vast majority. Staff and Council now have to resist having the SW fee/tax eroded by exemptions.
Thank you for the elaboration. We could replace rent with the phrase overall monthly cost versus what renters would pay to private landlords.
The mayor is disingenuous or not financially literate. The town would not be charging itself if it has an excuse to charge their tenants more. It would only be true of Venture 13, to which Cobourg partially contributes.
Cobourg ignored the Ontario Regulations on Stormwater fee computation and acted arbitrarily (it became a tax), so it is no surprise they ignored Municipal Act 106 as well.
I agree council should be especially commended for over ruling the Mayor’s last minute addition of Option C, and his heavy handed pitch for it in session. Late in the meeting he admitted to pushing Watson for its addition in their report. The budget used to justify the fee was inflated from the start.
Andre,
You wrote “It would only be true of Venture 13, to which Cobourg partially contributes” Cobourg taxpayers subsidize V13 in the amount of $215K in 2023 and 2024. In 7 years of operation V13 has cost the Cobourg taxpayers upwards of $1.4M.
What do we have to show for it in the promised new businesses and Jobs?
ZERO
Then why in the devil has Cobourg Council not “Shut It Down”?
Cornbread,
Excellent question.
Staff and Council simply refuse to learn the lesson that Port Hope learned with the IdeaHub.
There’s also the danger that they might actually reduce costs.
We are veering off topic somewhat, but government would not know an innovation fist if it hit them in the face, and largely they know it, so they push the picking of winners & losers to innovation hubs. So far so good.
Problem is the innovation hub itself is an entity that feeds off government money, charging fees to innovators for services, and paying salaries. There could be some DEI (didn’t earn it) criteria in there too. True innovators work out of their basements, garages, or wherever, and succeed despite government.
As such, Venture 13 might as well pay a SW fee.