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HomeMy WebLinkAbout1994-132EbPWvSv0mvU7ILIn 229 ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AMENDING SECTIONS 26-3 THROUGH 26-2 OF THE CODE OF ORDINANCES OF THE CITY OF DENTON, TEXAS BY ESTABLISHING REQUIREMENTS FOR DEPOSITS FOR UTILITY SERVICES RECEIVED FROM THE CITY: AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: F'CTION I That Section 26-3, Section 26-4, Section 26-5, and Section 26-6 of the Code of Ordinances of the City of Denton are hereby amended so that said sections shall hereafter read as follows: Sec. 26-3. service deposits. (a) Exemption from deposit for residential service. No service deposit will be required of a applicant for residential utility service if the applicant can provide one (1) Of the following; (1) An as ceptable credit rating for the last twelve months the customerreceived service from the city utility system or another electric utility company. The period has to be within the last two years. The applicant must provide the city a letter of credit for verification. (2) A cosigner who is currently receiving utility service from the city and who has an acceptable credit rating with the city utility system and will execute a written guarantee to guarantee payment of the applicant's utility bills. (3) A member of the applicant's immediate family, i parent, child, orsibling, who has received service from another electric utility company within the past two years with an accep- table credit rating for the past twelve (12) months becomes co - applicant, agreeing in writing to pay the account should the customer fail to make payment. (4) An acceptable store an a Risk Model Assessment o other evaluation of an applicant's credit approved by the city council. For purposes of this chapter, "aceptable credit rating" shall mean a credit rating which is based upon a formula approved by the city council. An "excellent credit rating" and "unacceptable credit rating" shall refer to credit ratings which are based upon a formula approved by the city council. 230 (b) Exemption from deposit for mommeieial service. An ap- plicant for utility service for a commercial or industrial entity or business may not berequired to make a deposit if the applicant: (1) Provides the city an acceptable commercial/industrial [edit rating for the last twenty-four months the customer received service from the city utility system. The period has to bewithin the three years prior to the date of application. Credit ref- nces from residential utility accounts are net accepted for exemptions of commercial/industrial deposits; or (2) Demonstrates an excellent credit rating by supplying to the city for review and verification, current relevant financial information which may include: annual reports, information from cognized financial rating agencies, information from credit reporting agencies, references from other electric utility sup- pliers; and such other financial data that the city manager or his designate may require. (c) Deposit alternatives. If the credit of a ial/ industrial customer for service has not been established satisfac- torily to the city, the applicant may provide a surety bond or an irrevocable letter of credit in lieu of a deposit. The bond must beexecuted by a surety authorized to do business in the State of Texas. The letter of credit must be executed by a Texas bank to the satisfaction of the city manager and city attorney. The cus- tomer must maintain the surety bond, r where applicable, the letter of credit, i effect at all times If the customer allows the bond or letter of credit to expire, the customer shall pay a deposit n the aunt provided in sec. 26-4 or the city may terminate utility service. (d) Deposit due. If one (1) of the conditions in subsections (a), (b), or (c) above cannot be met, then the customer requesting utility service will be required to deposit an amount as provided c for herein before receiving utility service from the city. with regard to subsection (a), the city may provide service for up to twenty (20) days while the applicant attempts to meet the exemption requirements. The city shall notify applicant that service will be terminated if the applicant does not meet the requirements for exemption. In addition, a customer may be required to pay a deposit if: (1) the customer has been terminated from receipt of utility service due to non-payment of a utility bill. (2) the city has determined there is evidence of tampering with the customer's meter; (3) the customer has an unacceptable credit rating and the city does not have in its files a current cosigner or applicant who meets the requirements of Sec. 26-3(a); 231 (4) the customer has been required to pay or is paying off a utility account balance previously deemed uncollectible. (5) the customer has filed a petition for relief under the applicable provisions of the United States Bankruptcy Code; or (6) the customer's letter of credit or surety bond filed with the city in lieu of a deposit has expired. Sec. 06-4. Amount of deposit. ) Residential customers. If a customer receiving resi- dential s service i required to make a deposit, the amount of the deposit shall be $150 or an amount equal to one -sixth of the last twelve (12) months' billing at the location where service is requested. (b) Commercial customers. In the case of commercial or industrial service, if the applicant for service isrequired to make a deposit, the amount of the deposit shall be $300 or an amount equal to one -sixth of the last twelve months of billing at the location where s requested, whichever is greater. If o previous history is available for the location, a representative facility similar to the type where service is requested will be used to establish the amount of the deposit. (c) Additional deposits. The city may require a customer to make an additional deposit in the event that a deposit made as specified in subsection (a) or (b) is subsequently determined to n longer be sufficient. In no event will the amount of the deposit exceed 1/6 of the last twelve months' billing at the service location. The city may disconnect serviceif the customer does not remit the additional deposit within ten (10) days of,the city's request provided a written disconnect notice has been issued. Such disconnect notice may be issued concurrently with the written request for the additional deposit (d) Interest. The city shall pay interest On deposits at a adjustable rate. The rate of interest will be adjusted semi- annually, ually, on October 1 and April 1 of each year, to equal the e in- terest rate of a ne year United States Treasury note. If a refund of the deposit is made within thirty (30) days of receipt of the deposit, no interest will be paid. If the deposit isretained more than thirty (30) days, payment of interest shall be retroactive to the date the entire amount of deposit has been made. The deposit shall cease to draw interest on the date it is returned or credited to the customer's account. Payment of the interest to the customer shall made at the time the deposit is returned or credited to the customer's account. PAGE 3 232 (a) Credit checks. After making application for service, the customer service department may pursue a credit reference check. The customer will be given service promptly after application, but if the credit check shows the customer does not have an acceptable credit rating, the customer will be required to produce acosigner r place a deposit. Failure to do so will result in the discontin- eance of service with no less than two (2) days of notification given in writing, to the prospective customer by the customer ser- vice department. Sec. 26-5. Refunds of deposits. The city shall refund deposits to applicants and customers if one of the following events occurs. (a) The customer's service has been disconnected. The city shall refund the deposit plus accrued interest less any outstanding balances. A transfer of service from o service location to pother shall not be deemed a disconnection and the city shall not require anadditional deposit unless authorized by Sec. 26-3 or Sec. 26-4 hereof. (b) When the customer has paid bills for service for twelve conscutive residential billings or twenty-four ecv s cutive c - imercal o industrial billings without having service disconnected for non-payment of bills or meter tampering pE$ with no more than two o each year i which a bill was delinquent as provided by Sec. 26-6 (a)provided the customer is not delinquent in the payment of the c, en[ bill. The city shall refund the deposit (plus accrued interest) to the customer in the form of cash or credit to acustomer's bill or release the customer's surety bond or irrevocable letter of credit. Sec. 26-6. Other fees. (a) Connection and transfer fees. A connection fee in an amount established by the city council and on file in the office of the city secretary will be charged to new customers requesting water and/or electric service, and a transfer fee in an amount established by the city council and on file in the office of the city secretary will be charged existing customers for transferring from one (1) location to another. (b) Reeonnect fee and deposit. If water and/or electric utility service is disconnected for nonpayment, then the customer will be required to pay a reconnect fee r amount established by n the city council and on file in the office c of the city secretary and maintain deposit sum equal to one -sixth of the last twelve (12) months' billings on billing at the location where service is requested. PAGE 4 233 SECTION II. That the City Council approves the Risk Model Assessment and the formula for determining u ceptable, cep - table, and excellent credit ratings attached hereto as Exhibit "A", and incorporated by reference herein. SECTION III. That Section 26-4 through Section 26-8 of the Code of Ordinances are hereby renumbered, respectively to Section 26-7 through Section26-11. $ECYSON IV. That Section 26-6 (a) (Billing and collection for services) , renumbered to Section 26-9 (a), is hereby amended so that said subsection shall be and read as follows: Sec. 26-9. Billing and collection for services. (a) Due date for payment of statements. The due date for the payment of the bill for utility services shall not be less than fifteen (15) days after is e Payment must be received in the city cashier's office byclose of business on thedue date, in order to avoid assessment Of a penalty. Payments placed in the mail and showing apostmark on the due date will not be considered as being received on the due date. SECTION V. That this ordinance shall become effective immed- iately upon its passage and approval. PASSED AND APPROVED this the 10( day of 1994. BOB C LLE"BERR�Y, MATO ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: DEBRAAA.�../ CRAYOVITCH, CITY ATTORNEY BY:jL4 /d[ec-_'!) PAGE 5 234 CREDIT/COLLECTIONS SECTION DEFINITIONS FOR CREDIT RATING Credit ratings are functional measurements applied to Customer Service credit operations. For new residential customers, credit ratings determine the acceptability of Letters of Credit, Co -Signer's agreements, and Co -Applicant's agreements. For residential and commercial transfer customers, the credit rating may determine whether or not the customer will be required to pay a deposit. Two criteria make up the credit rating: 1. Credit history 2. Returned check history Below are the credit ratings used by the City of Denton: 1. Excellent No late payments over the past twelve (12) billings No returned checks 2. Acceptable No more than two (2) late payments, i.e., two (2) payments at Credit History Code 2 or higher, aver the past twelve 1121 billings No returned checks 3. Unacceptable Three (3) or more late payments, i.e., three 13) payments at Credit History Code 2 or higher, over, the past twelve 114 billings One or more returned checks Procedures for Determining Credit Rating The credit history is located In the upper right hand corner of the credit history screen with late payments flagging on a progressive scale of zero (0) through six (6). Code Total bill paid by due date. Total bill paid between penalty posting and bill calculation - Good previous credit history. 235 Procedures for Determining Credit Rating, can't. Code 2 Total bill paid between penalty posting and bill calculation - bad previous credit history. 3 Some portion of bill unpaid at next bill calculation. 4 Some portion of previous bill unpaid five days after latest billing. Disconnect notice issued. 5 Cut order prepared. Some portion of previous balance unpaid on delinquent date of current bill. 6 Physical disconnect for non pay. The returned check history is located In the upper right hand corner of the credit history screen directly beneath the credit history. Code Represents one returned check within one billing cycle. 2 Represents two returned checks within one billing cycle. NOTE: Ratings post monthly with the most recent month on the left. A maximum of the twelve (12) most recent months show at any given time.