(Source: Toronto Star)

Councillors criticize system that sees payments pile up if homeowners, builders don’t seek refund

The City of Toronto is sitting on $16.7 million of unreturned damage deposits received from infill builders. And under its own rules, after two years the city can keep it.

Deposits of $2,000 per project are collected to cover the costs of roadway damage during construction, mostly from builders who need to dig a trench to hook up services to houses being built in existing neighbourhoods. While the city refunds the money if the repair work is satisfactory, the rules stipulate that the builder must apply to get it back in writing.

But people should not have to chase down their deposit. It should be automatically handed back, says Councillor Mike Del Grande.

According to a 2008 report, the city had $16.7 million in deposits that had not been returned, about $5.5 million of that more than two years old.

Welsh [Gary Welsh, general manager of transportation services] wants to hire two staffers to work on clearing those deposits, in part by sending letters to 500 to 1,000 homeowners this year indicating they will forfeit their money if it isn’t claimed soon.

In recent years the city, which earns interest on the cash, has transferred $4 million of forfeited deposits into a fund to carry out general road repairs.

City council will decide whether to okay the hiring when the 2009 operating budget comes up for approval March 31 and April 1.

Read Paul Moloney’s full article “City keeping millions in deposits” in the Toronto Star (March 18, 2009).

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