Town trying to avoid appearance of selling sewer, water line and grinder pump insurance

This term of council is being a little more cautious about stirring up a controversy from 2017, when some Niagara-on-the-Lake property owners were outraged over letters they received from the town, seemingly endorsing an insurance program for sewer and water lines.

The letters sent at that time were perceived as a sales pitch for Service Line Warranties of Canada — a company headquartered in Canonsburg, Pennsylvania — outlining a program that provides coverage for repairs to outside sewer and water lines on homeowners’ property.

It was signed by then Lord Mayor Pat Darte, and had the town logo on the envelope and letterhead. Shortly after the first letter was sent it was followed by a reminder notice, saying “please disregard if you have already enrolled.”

The agreement of the day called for either the mayor or clerk of the municipality to sign, and since the town clerk was new to the job, Darte said at the time he would sign it, in order to fulfill the contract with the warranty company.

The program was seen by staff as a benefit to residents, but they said at the time they did not have control over the aggressive marketing of the program.

A report to councillors in June describes the sewer, water line and in-home warranty program as providing residents with insurance that will “help repair, replace, or restore critical sewer and water line laterals between the mainlines and connections on private residential property. This is the owner’s responsibility, but is often perceived as the town’s responsibility.” In NOTL, the warranty is also offered on grinder pumps.

Letters of renewal are going out to residents soon, and the report was updating councillors on the program.

The partnership originally included a five per cent commission, which some residents considered a kickback, or hidden tax.

The town continues to receive five per cent of the program’s revenue, as part of the agreement with SLWC, which uses the town’s name and logo on letterheads, advertising, billing, and marketing.

The warranty is offered through Local Authority Services, described as a not-for-profit provider of business services for Ontario municipalities, created in 1992 by the Association of Municipalities of Ontario (AMO).

The program is endorsed by AMO, and benefits many residents across the province, with more than 60 municipalities participating, the recent information report to councillors says.

The 2017 controversy was revived at a June meeting of the committee of the whole, when Lord Mayor Betty Disero initiated a discussion of the program renewal that was included in the information package.

As a councillor in 2017, she remembers “the bundle of controversy” the town endorsement of the program caused, and doesn’t want to revive the “angst” that resulted from the original letters.

She made two requests of staff, that her name as Lord Mayor not be on the letter, and that there be some communication with residents to explain the program, including a phone number or email address for them to call if they want their name removed from any list the company might have.

“I don’t want to be seen as selling insurance,” she says. “It doesn’t look right. I don’t want people to think they have to buy it because it has my name on it.”

She says she originally thought the program might be a good idea for those in St. Davids with grinder pumps, who would not have to pay for expensive replacements when their pumps fail, but she didn’t want to be seen as endorsing it.

Operations director Sheldon Randall, one of the staff members involved in the original agreement, told councillors recently he believes the letter is appropriate, including having the town logo on it. “It was endorsed by the town, and there is a benefit to the town,” he says, adding the warranty provides an option for residents, and one that is purely voluntary. 

When the original agreement was signed, Randall said town staff did its due diligence, and supported the program.

CAO Marnie Cluckie says the town is still under an agreement that includes an annual extension of the partnership and the mailout of letters.

A lot of issues in past years have been addressed, she says, including that the letters only go out to property owners who front on those services.

They can contact town staff if they don’t want mailouts, she adds.

Although there was some discussion about rewriting the letter or removing the logo so the town wouldn’t appear to be endorsing it, councillors agreed the letter could go out as planned, without Disero’s name on it.

A letter to The Local recently from Service Line Warranties says NOTL homeowners will soon receive information in the mail about the available optional service plans. “It’s been a few years since homeowners received any information from SLWC, so I hope that sharing this information with you will be useful in informing residents and avoiding any confusion about the mailing,” the letter states.

“While it has been some time since NOTL homeowners have received information about the program, homeowners will soon receive updated information in the mail about the available plans; there is no obligation to sign up for a plan. The mailings will include the Niagara-on-the-Lake logo to indicate that the mailing is legitimate, and that there is a partnership in place between the Town and SLWC.”

As of May, the town information report says, a total of 293 residents were enrolled in 416 total policies: 233 for sewer service lines, 147 for water service lines and 36 plumbing and drainage policies. A total of 51 repairs have been completed to date, saving Niagara-on-the-Lake residents $100,517 in retail repair costs.

For more information visit https://notl.com/content/
service-line-warranty
-program.