May 21, 2021
I heard from many residents on the confusion that was caused by Service Line Warranties of Canada (SLWC) Program, which is a private company, using the city logo on their mail outs. I share the concern for this tactic since most of us know to watch out for the use of official logos out of context. There was no communications or heads up that this program was being launched with Councillors. The program was formulated in the last council before I was elected. I appreciate that the City’s Committee on Environmental Protection, Water and Waste Management passed a motion to look into this matter and I will support this directive when it reaches City Council.
Councillor Theresa Kavanagh
The City’s partnership with SLWC
The City of Ottawa has partnered with Service Line Warranties of Canada (SLWC) to offer Ottawa homeowners protection plans to help cover repair costs associated with their portion of water service and sewer/septic lines. SLWC is solely responsible for the administration of the program and participation is optional and voluntary for Ottawa homeowners.
Water and sewer service lines connect a homeowner’s property to the City’s water and wastewater systems. Homeowners are responsible for repairs to the portion of water and sewer service lines, including the stormwater sewer service line, located on their property. If a leak, break or clog occurs in the private portion of these lines, the homeowner is responsible for hiring a plumber and paying any of the associated repair costs.
FAQs
- Does the city do business with this insurer/warranty provider?
This is the first agreement the City has entered into with Service Line Warranties of Canada. The service plans are only offered to residential property owners, and therefore City facilities are not eligible under the plans. However, City staff reviewed the existing City of Hamilton and Region of Peel agreements with SLWC, along with work completed by the Association of Municipalities of Ontario, prior to entering into an agreement. Staff also reviewed SLWC’s A+ rating with the accredited Better Business Bureau organization.
- Is there any benefit to the city to offer this to homeowners?
This is program is an opportunity for the City to educate residential property owners about their responsibility for the cost of maintenance, repair and replacement of the private portion of their water and sewer service lines (from inside the home to the property line or water shut-off valve), while also offering 1 potential (and totally voluntary and optional) option to address the costs associated with this responsibility.
Under the agreement with SLWC, the City will receive a five (5) per cent royalty, which will serve to offset internal program administration costs associated with this program. This is a cost neutral arrangement for the City and its taxpayers. As such, the City will not be generating a profit from this arrangement.
Other companies are not in any way precluded from approaching the City to enter into a similar type of agreement.
- Is the purpose to encourage residents to subscribe to reduce liability or exposure for the city due to improper maintenance or construction issues or simply to assist homeowners?
The mailout is an opportunity for the City to educate residential property owners about their responsibility for the cost of maintenance, repair and replacement of the private portion of their water and sewer service lines (from inside the home to the property line or water shut-off valve), as many homeowners are not aware of this responsibility. The City receives many service calls each year from homeowners with a problem on the private portion of the water and sewer service lines, but the City is not responsible to resolve issues on the private portion of the water and sewer service lines, and this repair work can be in the thousands of dollars.
Through these service plans, the City can be assured that all repairs performed on this critical infrastructure meet the Ontario Building Code and that all appropriate permitting is obtained. In addition, SLWC only uses qualified local contractors.
- Is the work related to upcoming city projects (ex: LRT)? Is the city expecting that their work will cause issues with resident sewer lines?
The program mailout is unrelated to LRT construction or any other City infrastructure projects. Approximately 50 cases involving a leak on the private portion of the water service line are reported to the City each year, however it is hard to determine if this is representative across the City because work takes place on the private portion of the water line. Similarly, in a March 2018 report from the Ontario Sewer and Watermain Construction Association, it was reported that Ottawa experienced 43 sewer backups, but this may not be representative of the total number given that work on the private portion of the sewer lateral is not the responsibility of the City. Residents should consider the age and material of the pipes at the property, and whether there are private or public trees on the property, in considering whether they wish to participate in this is optional and voluntary service.
- Homeowners may wonder what the potential benefit is or if there are specific cost savings using this company. A rider could possibly be added to their own insurance for coverage of incidents.
Homeowners are encouraged to check with their insurance provider regarding their insurance coverage for the maintenance, repair and replacement of the private portion of their water and sewer service lines (from inside the home to the property line or water shut-off valve) before signing up with the plan.
Enrolment in this program is completely optional and voluntary, and in no way effects the service the City continues to provide on the public portion of the water and sewer service lines (from the property line or water shut-off valve beyond).
- What if the insurer does not fulfill their professional obligations?
City staff, have been and, are in continuous communication with SLWC and will be monitoring the program to ensure residents receive excellent service. The term of this Agreement is for 2 years which started on September 1, 2020. Either party has the right to terminate the Agreement at any time with 30 days written notice. If termination occurs, SLWC has to meet all of its contractual obligations to the enrolled residents.
- Why was the company allowed to use the City’s logo?
The City allowed the use of it logo only after City staff reviewed the existing City of Hamilton and Region of Peel agreements with SLWC, along with work completed by the Association of Municipalities of Ontario, prior to entering into an agreement. City staff are in continuous communication with SLWC and will be monitoring the program to ensure residents receive excellent service. Other companies are not in any way precluded from approaching the City to enter into a similar type of agreement.
More questions and answer at Ottawa.ca
Important Points of Clarification
- The SLWC Program is a voluntary program that was approved by Council in February 2016 to provide residents with an optional service that could help address ongoing issues related to the private portion of water and sewer services (including private septic systems). There is absolutely no requirement for residents to enroll in the repair plans offered by SLWC.
- The Program is part of the Association of Municipalities of Ontario’s (AMO) Local Authority Service Program, and it is under this program that the City was able to enter into the Agreement using the Co-operative Purchasing provision (Section 36) of the City’s Procurement By-law (No. 50 of 2000).
- SLWC is Headquartered in Canada and is a subsidiary of a U.S.-based company, similar to other contractors that the City enters into agreements with. This agreement between the City and SLWC is not directly with a U.S.-based company or entity. SLWC hires local, qualified contractors to complete the repair work – keeping dollars in the community.
- The City cannot advise residents if they are covered for private water or sewer connection line issues under their existing private insurance policy. While some insurance policies offer this as an add-on coverage, it is recommended that residents contact their insurance provider to seek confirmation and to discuss their options (including the possibility of enrolling in a repair plan offered by SLWC).
- While the age of the house, construction materials, soil conditions, and presence of trees are all factors that may increase a property’s susceptibility to water and/or sewer line failures on the private property, the City does not have the data to accurately predict which properties are most at risk.
- The City did not sell or otherwise provide resident names or addresses to SLWC as part of this program. SLWC purchased its records through a third-party, which are accessible through public information.
- SLWC and its contractors will be solely responsible for any work performed under the repair plans. The agreement between the City and SLWC contains appropriate indemnification and insurance provisions to shift any risk away from the City. Any suggestions that the City and its taxpayers will bear increased exposure to financial risk for this work is false and unfounded.
- NOTE: All residents, regardless of whether they have insurance or service warranty coverage, maintain responsibility for water and sewer connections on private property and for having repairs completed by a qualified contractor.
- SLWC is not providing a City service (i.e., a service the City is responsible for), and this arrangement is not considered a Public-Private Partnership (P3).
- Should residents receive information from SLWC and wish not to receive additional information in the future, they can contact SLWC at 1-844-958-0069 to request that they be removed from the mailing list.
- NOTE: Follow-up letters have already been mailed to residents that received the postcards, so requests for removal would only apply to any documents from that point forward.
Background
On February 24, 2016, Council approved the Residential Protective Plumbing Program – Review and Proposed Program Updates report (ACS2016-COS-ESD-0006), which included a recommendation to delegate authority to the General Manager of Environmental Services to implement the Service Warranty Program, as outlined in the report. This recommendation was based on a program review that examined best practices in other large scale Ontario municipalities, which identified this as a voluntary opt-in service for residents that could help address ongoing issues related to the private portion of water and sewer services, including unpredictable failure, lack of homeowner awareness, and high cost of repair. It was also indicated in the report that this program would be offered to residents at no cost to the City, with a five per cent royalty being provided to offset internal administrative costs. As part of this program, it was also stated that SLWC would be permitted to use the City’s logo on its information materials, as approved by the City.
Following Council’s approval of the 2016 report, staff began working in consultation with Legal Services and Supply Services staff – using lessons learned from other Ontario municipalities – to negotiate and execute an agreement with SLWC, consistent with the delegated authority provided by Council. Since that time, extensive work has been undertaken with all parties to prepare promotional materials, FAQ documents, and to update the City’s website to provide key information to residents. Work has also been completed to identify how to coordinate and share information with City staff on repairs affecting both the public and private portions of the water or sewer line.
Service Lines Warranties of Canada (SLWC) in Ontario Municipalities
Headquartered in Canada, SLWC (a subsidiary of HomeService USA Corp.) is a leading provider of home repair solutions in North America, serving over 3.7 million customers across Canada and the United States. Specific to Ontario, the SLWC Program is not a new program or concept, with the City of Hamilton first signing on for this service offering in April 2014. Since that time, the SLWC Program has been adopted and endorsed by 62 leading cities and municipalities across the province (as of February 2021), and is part of the Association of Municipalities of Ontario’s (AMO) Local Authority Service Program. It is under that latter program that the City was able to enter into the Agreement under the Co-operative Purchasing provision (Section 36) of the City’s Procurement By-law (No. 50 of 2000).
Since being endorsed, the Program has offered the following coverage to participants in these municipalities:
Overall, SLWC has a very strong track record nationally, with a claims approval rating of 97 per cent and a customer satisfaction rating of 98 per cent, and an “A+” Rating from the Better Business Bureau (BBB).
Program Purpose and Benefits
As outlined in the 2016 report to Council, the primary purpose of this voluntary/optional opt-in program is to help address ongoing issues related to the private portion of water and sewer services. Many residents incorrectly assume that water and sewer line connections outside of the house are either the City’s sole responsibility or are covered by their home insurance policy, and this is unfortunately often not the case – leading to unexpected additional costs for residents.
While it has been accurately reported that coverage for these types of unpredictable events is often offered by insurance providers, it is staff’s understanding that the vast majority of insurance policies do not automatically include this type of coverage; rather, this coverage is typically offered as an add-on coverage, similar to coverage for earthquakes, flooding and identity recovery. Moreover, where this add-on coverage is applied, residents need to be mindful that it often requires the payment of a deductible when claims are made; alternatively, the option of a warranty service (such as that offered by SLWC) may be slightly more costly on a monthly basis but does not include any deductible for receiving repair work. As is the case with evaluating any form of add-on insurance or warranty coverage, the most important thing is that residents are aware of their situation and risks, aware of the options available to them, and are equipped to make an informed decision on whether or not the risk to their property needs to be mitigated, and if so – which option is best for them.
The other notable benefit of offering the SLWC Program to residents is that they can have confidence that all repairs are being coordinated and performed by local qualified individuals. While some insurance policies may require homeowners to do some of the legwork in coordinating the trades and necessary inspections (which includes validating that the individuals are qualified), the SLWC Program is reachable 24/7 and handles the entire process with a network of trusted and qualified contractors. While some insurance companies may follow a similar process to SLWC in terms of handling all of the logistics once a claim is made, this is another item that residents should enquire about with their insurance provider to understand what their responsibilities may be in the event of private water or sewer line failure.
Lastly, it should be clearly noted and understood that the City of Ottawa is not taking a position on whether warranty service coverage is preferential to insurance coverage (or vice versa). Rather, the City believes that SLWC presents a viable and affordable option for residents that wish to be covered for unpredictable issues related to water and sewer lines on private property which are their responsibility.
