1994-132EbPWvSv0mvU7ILIn 229
ORDINANCE NO. - /3Z
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AMENDING SECTIONS 26-3
THROUGH 26-7 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:
°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 a
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 acceptable credit rating for the last twelve
months the customer received service from the city utility system
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 signer who currently receiving utility
service from the city and who has a 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, or sibling, who has received service from another
electric utility company within the past two years with a accep-
table credit rating for the past twelve (12) months becomesa co-
applicant, agreeing l 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
credit rating which is based upon a formula approved by the
mean a 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.
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(b) Exemption from deposit for mommeieial service. An ap-
plicant 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
[edit rating for the last twenty-four months the customer re ved
service from the city utility system. The period has to be within
the three years prior to the date of application. Credit ref-
erences from residential utility accounts a 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 iindustrial customer for service has not been established tisfac-
torily to the city, the applicant may provide a rety bond or an
irrevocable letter of credit in lieu of a deposit. The bond must
bee cuted 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, or where applicable, the
letter of credit, r effecat all times If the customer allows
the bond or letter of credit to expire, the customer shall pay a
deposit in 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 a amount as provided
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 a unacceptable credit rating and
the city does not have i its files a current cosigner or applicant
who meets the requirements of Sec. 26-3(a);
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(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. 06-6. Amount of deposit.
) Residential customers. If a customer receiving re'-
dentialservice 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
industrial service, if the applicant for service is required 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 service requested, whichever is greater. 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.
(c) Additional deposits. The city may require a customer to
make a additional deposit in the event that a deposit made as
specified i subsection (a) or (b) is subsequently determined to n
longer be sufficient. Inn event will the amount of the deposit
exceed 1/6 of the last twelve months' billing at the service
location. The city may disconnect service if 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 se -
ually, on October 1 and April 1 of each year, to equal the in
terest rate of a one 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 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 0 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.
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232
(e) 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
or place a deposit. Failure to do so will result in the discontin-
eance service with no less than two (2) days of notification
given i 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 an additional 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-fourconsecutive c -
cial o industrial billings without having service disconnected
fornon-payment of bills c meter tampering 9114 with n more than
two occasio 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 a customer's bill o 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 n 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) Reconnect 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
the city council and on file in the office of the city secretary
and maintaina deposit sum equal to one-sixth of the last twelve
(12) months' billings on billing at the location where service is
requested.
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SECTION II. That the City Council approves the Risk Model
Assessment and the formula for determining unacceptable, 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 Section 26-11.
$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 issuance. Payment must be received in the
city cashier's office by close of business on the due date, in
order to avoid assessment of a penalty. Payments placed in the
mail and showing a postmark 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:
DEBRA
AA..../ CRAYOVITCH, CITY ATTORNEY
BY:jL4 /d[ec-_'!)
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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 1121 billings
No returned checks
2. Acceptable
No more than two 121 late payments, i.e., two 121 payments at
Credit History Code 2 or higher, aver the past twelve 1121 billings
No returned checks
3. Unacceptable
Three 131 or more late payments, i.e_ three 131 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 101 through six 161.
Code
Total bill paid by due date.
Total bill paid between penalty posting and bill
calculation - Good previous credit history.
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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 nom 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.
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