The following information relates to the 2014 fees and the arbitration ruling:
- The Municipal Obligation Arbitration Award Recap
- The 2014 Steward Obligation Gap
- Using Reserves To Pay Some Of The Obligation Gap
- 2014 Fee Schedule And The Associated Adjustment Due To Arbitration
- Steward Invoices And Payments
The Municipal Obligation Arbitration Award – Recap:
Retired Justice Robert Armstrong rendered his decision in the arbitration between the Association of Municipalities (AMO) and the City of Toronto, and Stewardship Ontario on November 25. While he validated all of Stewardship Ontario’s key legal arguments that steward payments should be limited to reasonable costs, he found that in the absence of a negotiated agreement between AMO/City of Toronto and Stewardship Ontario, the 2014 obligation should be set at $115M.
Stewardship Ontario has calculated a 2014 Adjustment Fee Schedule designed to address the municipal obligation shortfall which is due to be paid to municipalities by March 31, 2015. The 2014 Adjustment Fee Schedule was approved by Stewardship Ontario’s Board on December 9, 2014 and Waste Diversion Ontario’s Board on December 10, 2014.
Fulfilling the 2014 Steward Obligation Gap
The arbitration award set the 2014 municipal obligation at $115M. Fees paid by stewards in 2014 were based on the 2013 fee schedule because the ongoing arbitration prevented the WDO Board from approving the 2014 Blue Box Program Rules and fee schedule. Steward fees paid in 2014 raised a total of $99.7M which has left a funding gap of $17.4M after accounting for program management costs and CNA/OCNA in-kind payments.
Relief from Reserves
After careful consideration of the effects of using reserve funds to cover the full funding gap, a decision was made by the Board of Directors to retain 10% of annual operating costs in reserve, in accordance with Stewardship Ontario’s reserve policy and WDO’s reserve guidelines. Despite this restriction, Stewardship Ontario is able to apply $9.7M of reserves, leaving $7.7M to be raised from our Blue Box stewards.
2014 Adjustment Fee Schedule
The full 2014 Adjustment Fee Schedule, reflecting the above, can be viewed here.
Steward Invoices and Payments
Stewardship Ontario issued its fourth and final 2014 invoice to stewards in early November. The arbitration decision requires us to issue a fifth 2014 invoice. The 2013 Rules (which remain in effect because the 2014 Rules were not approved by WDO) do not permit Stewardship Ontario to issue five invoices for one obligation year. Stewardship Ontario therefore sought and received approval from WDO to create an Arbitration Adjustment Rule (available here to view) that permits the issuance of a fifth 2014 invoice to stewards. The fifth invoice, in the aggregate, will equal the difference between the 2014 steward fees invoiced to date, and the amount required to fulfil our obligations as awarded under the arbitration, less the reserve funds applied.
Stewardship Ontario will endeavour to issue invoices to stewards before the end of this year and payment will be due February 27, 2015. Any steward that is unable to make the necessary payments by February 27th and wishes to discuss a payment plan is asked to contact Steward Services as soon as possible at 1-888-980-9549, or email us at:WeRecycle@stewardshipontario.ca.
To help answer some of the questions you might have, we have included a Q&A document, available here. If you have any other questions, please call the Steward Services team on 1-888-980-9549 or email WeRecycle@stewardshipontario.ca. We will combine all your questions and publish another Q&A.