Sewer repair partnership with U.S. firm puts city at risk, prof says

A professor of local law says a public-private partnership between the city of Ottawa and a U.S. warranty firm creates the risk of financial liability for the city and the royalties paid to the city are not worth it.

“If this private partner doesn’t do their job properly, the city could end up on the hook for the damage they cause or for the work they haven’t done. And that affects me as a taxpayer … affects me,” he said Stéphane Émard-Chabot, a former Ottawa city councilor who now teaches local law at the University of Ottawa.

Earlier this week, Ottawa homeowners received cards in the mail with the City of Ottawa logo on them to notify them of the new optional protection plan.

However, the letters were actually sent on behalf of the city by Service Line Warranties of Canada (SLWC), based in Pennsylvania, to announce the company’s partnership with the community.

For a monthly fee, SLWC will cover the cost of repairing a homeowner’s underground water or sewer line in the event of a failure, as homeowners are responsible for those lines up to their property line or the water shut-off valve.

Stephane Émard-Chabot, a city government attorney who teaches at the University of Ottawa, says partnering with Service Line Warranties of Canada could hold the city liable for issues related to the company’s work. 0:55

However, the deal is problematic not only because of its ethics, but also because of its potential risk to the city.

“The calculation really has to be this, whatever penny the city gets for the plan I buy for my house, if that contractor or his subcontractor hits a gas line and blows up half of my neighborhood, it’s well worth the risk that the city has to pay for it. Is it worth that much? That really is the question, “said Émard-Chabot.

In Ottawa, homeowners are responsible for repairing or replacing underground water and sewer pipes up to their property line. (Website of the City of Ottawa)

City bags royalties of sales

SLWC charges homeowners $ 55 per year for water pipe protection and $ 75 per year for sewer cover, plus taxes. Repairs to a home’s water or sewer system can range from $ 4,000 to $ 10,000, and potentially more for larger properties.

CBC has received a copy of the partnership agreement stating that the city will receive a quarterly royalty of 5 percent of all revenue SLWC makes from the sale of its Ottawa service plans.

In return, the company can say the city endorses their protection plan and can use the community’s logo for correspondence with homeowners as well as on their website, subject to guidelines.

“This is a red flag,” said Émard-Chabot. “From the government’s point of view, this is something that also raises concerns about the blurring of private and public.”

Homeowners in Ottawa have received these named cards from SLWC on behalf of the City of Ottawa. (CBC)

Supported by the Association of Municipalities of Ontario

SLWC responded that its partnership structure was endorsed by the Association of Municipalities of Ontario, and Ottawa has joined other communities in the province that have already partnered with it.

“These service plans provide a convenient option that homeowners can purchase as an option to avoid the expense and inconvenience of repairing these lines,” said Myles Meehan, senior vice president of public relations for HomeServe USA, the parent company of SLWC.

He added that the SLWC provides adequate insurance to protect the city in the event of a dispute with a homeowner.

Myles Meehan, vice president of public relations at SLWC’s parent company HomeServe USA, said the city of Ottawa is protected from liability in the event of a dispute with a homeowner. 1:15

“The city is protected from it. We touch it, we own it,” said Meehan.

In the drinking water section of the City of Ottawa website, a FAQ page for the SLWC program states: “A homeowner who signs up for the program should do so with the understanding that the city in no way justifies or is liable for it.” Work or performance of SLWC. “

Despite those assurances, a homeowner could sue both the company and the city and have them cleared up later, Émard-Chabot said.

A screenshot of the banner posted on the SLWC website shows the approved use of the City of Ottawa logo alongside the company’s pitch for its protection program. (SLWC website)

Pipes can already be covered by home insurance

While insurance broker Steve Tanner agrees with the city’s desire to raise awareness of aging water and sewer pipes on private property, he advises homeowners to call their insurer to see if they are already insured.

“You may not need this plan,” said Tanner, president of Tanner Insurance. “This coverage is already available through your home insurance and I think the majority of insurers will automatically include it in their policy.”

If they don’t already have coverage, homeowners can usually add coverage for an additional fee that they think is likely to be lower than the monthly fee charged by SLWC.

However, SLWC’s Myles Meehan points out that, unlike insurance, his company’s service plans don’t require the customer to pay a deductible.

“If I have a problem with any of these lines, I’ll make a call and have one of the local contractors waiting in Ottawa come out to do these repairs,” he said. “I don’t have to worry about the expenses.”

Steve Tanner, President of Tanner Insurance, says most home insurance policies already cover the cost of repairing or replacing underground water and sewer pipes. (Steve Tanner)

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