Unravelling the mystery behind sewer line warranty packages

·6 min read
Homeowners in Ottawa are responsible for the cost of repairing or replacing underground water and sewer lines up to the edge of their property, a cost that easily exceeds $5,000. (Lindsay Bird/CBC - image credit)
Homeowners in Ottawa are responsible for the cost of repairing or replacing underground water and sewer lines up to the edge of their property, a cost that easily exceeds $5,000. (Lindsay Bird/CBC - image credit)

Like thousands of homeowners across Ottawa, Julia Mountford received an envelope this week from what appeared to be the City of Ottawa.

After all, it had the city's familiar logo on it.

It contained several sheets of information, including a blue-coloured cover letter — again, bearing the city's logo — that read across the top, "Protection plans for exterior water and sewer/septic line repair."

Printed underneath that subject line, just to the right, is the direction, "Please reply," and at the bottom, in the signature area, it says, "The City of Ottawa."

We live in a society where people don't read the fine print. - Julia Mountford, homeowner

"It certainly appeared to be a letter from the City of Ottawa," says Mountford. "In fact, on our local Facebook group, the first question was, 'I received a letter from the City of Ottawa. Does anybody know what this is about?' People believed it was from the City of Ottawa.'

But it wasn't.

Despite the municipality's familiar emblem splashed over much of the material, the information package wasn't sent by the city — it was from a private company selling its warranty services for sewer and septic lines.

Calls, emails about program flood in

Service Line Warranties of Canada (SLWC) — a subsidiary of the U.K. multinational corporation HomeServe — has permission to use the city logo to sell its optional insurance-like service, but the sales campaign is causing confusion and some consternation. The city did not provide addresses to the company; SLWC purchased mailing lists from outside vendors who compile and sell this publicly available information.

Residents in Ottawa received packages in the mail asking them to sign up for an insurance-like service provided by a private company.
Residents in Ottawa received packages in the mail asking them to sign up for an insurance-like service provided by a private company.(CBC)

CBC wrote about the program last month, when homeowners began to receive cards in the mail — again with the city's logo on it — informing them of the new, optional protection plan.

Since then, councillors have been hearing from concerned residents about whether they needed to sign up to the "city program." According to the city, it has received 200 calls and 200 emails.

Neighbours have been discussing it in their group chats, and others have taken to Twitter to complain about the followup sales packages that arrived in mailboxes this past week.

Mountford never thought it was a compulsory program.

"In my earlier life, I was a proofreader," she says. But she's concerned for others because "we live in a society where people don't read the fine print."

Further, "it isn't the city's place to promote a profit-making company, which is what they're doing with this program."

Reactions like Mountford's are likely not what the city was hoping for when it partnered with SLWC to offer homeowners coverage for repairs to water and sewer lines on their properties — out-of-pocket costs that can easily total in the thousands of dollars.

To those asking on social media platforms, no, this program is not a scam. And it may even be beneficial for some homeowners.

According to the company, more than 500 people have already signed up for the $11-per-month plan, which covers up to $16,000 for sewer line repairs, and $8,000 for water or well lines. SLWC will send out a local contractor to handle your repair and deal with any necessary permits. Residents are encouraged to check whether and how their home insurance policies covers these sorts of repairs before signing up for the warranty.

It's not the service SLWC is offering that has confused and even upset some residents; it's the packaging of a private corporation's business pitch in municipal public-sector colours.

Passed council with no questions

So who's responsible for this minor debacle?

Technically, council. But in the larger sense, it's a symptom of the principle of delegated authority, where councillors give permission for a process or project to go ahead, entrusting the details to staff.

Then, when the end result isn't what councillors may have wanted, they are taken aback.

Here's what happened in the case of the water and sewer warranty program.

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

In a February 2016 report to the environment committee entitled, "Residential Protective Plumbing Program" — which mostly dealt with a grant program to help homeowners pay for devices that could prevent basement and cellar flooding — staff recommended that councillors approve a "service warranty program" for homeowners to help pay for the pipe repairs.

The report describes the program in five paragraphs. It names SLWC as the company that would be used for the "opt-in" program, as the corporation had already been vetted by the Association of Municipalities of Ontario.

The report says the city would receive five per cent of the subscription fees (not as lucrative as it sounds), and "the city's logo would be used on information materials, as approved by the city."

The committee gave the entire report the green light after about five minutes of discussion, none of which was about this warranty program. Staff had prepared a short presentation on the report, but councillors decided they didn't need to watch it, as they had been sitting there for hours already dealing with other agenda items.

Council unaware of what they approved

After council approved the report later that month, with no comment or questions, staff were authorized to go ahead to work out the SLWC partnership. Now, some councillors say privately they are surprised by the very existence of this program, and what the marketing looks like.

Is it reasonable to put the responsibility for this on councillors? On the one hand, elected officials cannot and should not be micro-managing the professional staff of the city. Councillors need to be able to trust staff and allow them to do their jobs.

On the other hand, councillors do need to know what they are approving and exactly what authority they are delegating. Councillors have lots of dense reports to read, so it's understandable if this item was missed.

Perhaps if councillors had watched the presentation that staff had prepared, it would have elicited questions about how the logo was to be used, or sparked a conversation about whether the plan blurred the lines of government and private business, or moved councillors to require that any deal with SLWC be brought back to committee before being finalized.

And councillors may have discussed other ways to educate homeowners about the potential costs of repairs for water and sewer issues.

This is not the first time councillors — and their constituents — have felt the unintended consequences of delegating their authority to staff.

They did so when they approved an addition to the Château Laurier in the months before the 2018 election, and then were dismayed when the results were wildly unpopular. And they delegated authority to staff to handle the entire procurement process for the multibillion-dollar LRT Stage 2 extension, only to be shocked years later to discover they had given away their right to see the documents or even know whether bidders had met the minimum scores.

By those measures, the SLWC marketing campaign is small potatoes. But it's part of a larger problem whereby councillors are unaware of what they are approving. Granted, figuring out the minutiae of staff reports and their consequences isn't always easy — but it is one of the things we elect councillors to do.