Sec. 26 3-4 Service DepositsSec. 26-3. - Service deposits and alternatives.
Employees of the utilities customer service department will determine the appropriate service deposit
requirement based on the customer's credit rating with the city utility system or by a reliable external
credit source available to the city.
(a) Residential customers. If a customer receiving residential service is required to make a deposit,
the deposit may be as much as an amount equal to one-sixth of the last twelve (12) months billing
at the service location or a similar location as determined by the utility representative.
(b) Residential exemption from deposit. No service deposit will be required of an applicant for
residential utility service if the applicant can provide and qualify for one (1) of the following:
(1) The applicant has an acceptable credit rating for twelve (12) consecutive months within the
last two (2) years with the city utility system.
(2) The customer receives an acceptable credit rating from a credit source available to the city.
The customer must pay the cost of obtaining the credit rating. This cost will be set annually
within the utility rate ordinance, but will not exceed one hundred dollars ($100.00).
(3) Customers with little credit history or a fair credit rating may be allowed to provide one of
the following alternatives in lieu of deposit:
a. A signed letter of good standing for utility services from a former utility company for
verification within twenty (20) days of applying for service; or
b. The applicant provides a cosigner who accepts responsibility and is verified to have an
acceptable credit rating with the city utility system, and who is willing to be listed on the
applicant's account to guarantee payment of the applicant's utility bills. This guarantee
will be in effect until the applicant develops an acceptable credit rating and the cosigner
requests removal from the account.
(4) Customer is participating in a verifiable permanent supportive or rapid rehousing program
and provides a dated and completed certification letter upon applying for utility services.
(5) Customer has been qualified as a victim of family violence and provides a dated and
completed certification letter upon application for utility services.
(6) Customer signs up for auto pay and maintains an acceptable credit rating for twelve (12)
consecutive months.
(c) Commercial customers. In the case of commercial or industrial service, if the applicant for service
is required to make a deposit, the amount of the deposit shall be an amount up to one-sixth ( 1/6
) of the last twelve (12) months of billing at the location where service is requested. If no 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.
(d) Commercial exemption from deposit. An applicant for utility service for a commercial or industrial
entity or business may not be required to make a deposit if the applicant:
(1) Provides the city an acceptable commercial/industrial credit rating for the last twenty-four
(24) months the customer received service from the city utility system; or
(2) The customer receives an acceptable credit rating from a credit source available to the city.
The customer must pay the cost of obtaining the credit rating. This cost will be set annually
within the utility rate ordinance, but will not exceed one hundred dollars ($100.00).
(3) If the credit of a commercial/industrial customer for service has not been established
satisfactorily to the city, the applicant may provide an irrevocable letter of credit in lieu of a
deposit within twenty (20) days of signing for service. The irrevocable letter of credit must be
executed by a Texas bank and must be approved by the city manager and city attorney. The
customer must maintain the irrevocable letter of credit in effect at all times. If the customer
allows the irrevocable letter of credit to expire, the customer shall pay a deposit in the amount
provided as listed above, or the city may terminate utility service.
(e) For purposes of this chapter, "acceptable credit rating" shall mean a credit rating which is based
upon a commonly used formula or a formula approved by the city council.
(Code 1966, § 25-4; Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No.
2002-316, § 1, 9-17-02; Ord. No. 2009-222, § 1, 9-22-09; Ord. No. 2010-292, § 2(Exh. A), 11-
16-10; Ord. No. 2018-016 , § 2(Exh. A), 1-9-18)
Sec. 26-4. - Additional deposit required.
(a) 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), (b), (c), or (d) is subsequently determined to no longer
be sufficient. The city may disconnect service if the customer does not remit the additional deposit
within fourteen (14) 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.
A customer may be required to pay a deposit or put down an additional deposit amount if:
(1) The customer has been terminated from the receipt of utility service due to non-payment of a
utility bill; or
(2) The city has determined there is evidence of a customer tampering with the city's meter; or
(3) The customer has an unacceptable credit rating and the city does not have in its files a current
cosigner who meets the requirements of section 26-3(a) or (b); or
a. Customer credit rating and deposit amount would be determined by internal point based
scoring
A <150 points No Deposit
B 150—300 Points No Deposit
C 301—750 Points No Deposit
D 751—2,000 Points 1 Month
E >2,001 Points 2 Months
(4) The customer has been required to pay or is paying off a utility account balance previously
deemed uncollectible or is past due; or
(5) The customer's irrevocable letter of credit filed with the city in lieu of a deposit has expired.
(b) Interest. The city shall pay interest on deposits at an annual rate established by city council. 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 is retained 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 be made
at the time the deposit is returned or credited to the customer's account. If the customer's account is
active, the deposit will automatically be applied to the customer's account to offset current billing.
(c) Credit checks. After making application for service, the customer service department may at any time
pursue a credit reference check. If the credit check shows the customer does not have an acceptable
credit rating, the customer will be required to place a deposit on the account. Failure to do so will result
in the discontinuance of service with no less than two (2) days of notification given verbally or in writing,
to the prospective customer by the customer service department.
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02; Ord. No. 2010-292, § 2(Exh. A), 11-16-10; Ord. No. 2018-016 , § 2(Exh. A), 1-9-18)