Hotel operators have billed the city of Toronto nearly $ 15 million in its emergency program to protect homeless people in the city’s hotels for the past two years, the auditor general said in a new report.
Toronto Auditor General Beverly Romeo-Beehler says as the city moved to rapidly expand its housing operations to hotels in the wake of the COVID-19 pandemic, the owner of a hotel charged him for things for which he was not specifically responsible under his contract. but he paid the money anyway.
No funds have been recovered so far.
Romeo-Beehler said the city was charged a three-percent “DMF” surcharge for rooms it rented in six hotels, known as the “Target Marketing Tariff,” intended to support the promotion. Greater Toronto Hotel Association.
Romeo-Beehler and his staff said they were given increasingly changing definitions of what this “DMF” charge was for, but in any case, it shouldn’t have been paid at all.
This fee paid by the city amounted to $ 2.4 million, plus the HST between August 2019 and August 2021.
“When we asked SSHA staff why they paid these additional fees, they stated that the rate was an industry standard hotel rate,” the auditors wrote in their report.
“The contracts clearly state that the price (that is, the room rate) is all inclusive, except taxes.” DMF “is not a tax and should not have been paid.”
The auditors found that a hotel operator offered to reimburse the city $ 381,000 of the money it raised, but in April 2022 no refund was received.
The city also charged $ 5.3 million between August 2019 and August 2021 for “facility surcharges” related to meal service for hotel residents.
But the auditors found that “the city is already being charged separately from room bills for any dining room used to provide meal service at the rates set out in the contract.”
In a two-week hotel, auditors found that the city paid $ 11,250 to rent space for catering staff to serve food to residents, but was also charged an additional $ 21,473.10 plus HST in the form of “facility surcharge”.
“Since there is no express term in the contract to pay a ‘Surcharge for facilities’, (Administration of accommodation, support and housing) should evaluate what has been paid so far and take steps to recover all amounts paid as far back as possible, “the auditors wrote in their report.
The auditors also found that a hotel operator charged the city $ 5.4 million plus HST for rooms in its hotels that were never occupied and that the city was not responsible for it under its contract.
In total, the $ 13.2 million plus taxes spent could have accommodated 140 people in hotel rooms, including all their meals and other support services for an entire year.
Toronto spent a total of $ 320 million on hotel reception operations in 2021.