The city will require all new customers and any prior customers who have demonstrated a record of nonpayment of water bills in the manner defined below to establish and maintain credit by posting an account security deposit before service will be rendered. After eighteen months of good payment history, as determined solely by the finance director or public works director, the deposit may be credited to the account or returned to the customer.
A.
New Applicant. In order to establish creditworthiness, every new applicant for utility service will pay a security deposit to the city for the purpose of establishing credit. The amount of the deposit is set forth below.
B.
Previous Customer. If an applicant has had a previous account with the city, and service on that account was terminated on one occasion within a period of twelve months due to late or nonpayment of fees and charges owed to the city, a security deposit, as described in subsection A of this section, will be required.
C.
Amount. The amount of the deposit will be determined by the finance director or public works director and will be equal to the average bimonthly utility billing for each class of customer, e.g., single-family residential, multifamily residential, commercial, business and industrial, based on bills for establishments of similar size and function. The required amount of deposits for each category will be revised annually, to the nearest ten dollars, and will be effective on July 1st of each year and set forth in the city-wide fee schedule.
D.
Payment. The deposit may be paid in any form of payment accepted by the city before service on the new account will begin.
E.
Applicability of Deposit. In the event of nonpayment of all or a portion of a bill, the deposit shall be applied to cover any unpaid charges on the account following issuance of the final bill when service is terminated.
F.
Replacement or Change of Deposit. Where water service has been discontinued as a result of late or nonpayment of charges and the deposit or a portion of the deposit is used to cover overdue charges, the customer will fully restore the deposit in an amount equal to the current average bimonthly utility billing for the appropriate customer class, in addition to the payment of any other applicable fees and charges imposed by the city schedule of rates and fees, before the city reinstates service.
G.
Interest on Deposit. No interest shall accrue or be paid on any amounts deposited with the city.
H.
Return of Deposit. Upon permanent discontinuance of service and closing of an account, the city will refund the deposit to the customer without interest less any unpaid fees and charges due and owing the city for water service furnished to the customer's premises prior to discontinuance of service. The finance director is authorized to return deposits or credit the account in a manner consistent with this chapter for any accounts which have been in good standing for eighteen months.
I.
Bankruptcies. When the city receives notice that a customer has filed for bankruptcy, the city may apply the customer's security deposit to cover any delinquent fees and charges the customer owes the city for water service furnished up to the date of the bankruptcy filing. The city may also enter into a new security agreement with the customer pursuant to applicable federal law, under which the city may require the restoration of the security deposit to the extent it is depleted, or the payment of a new deposit in the amount specified in the city schedule of rates and fees. The city may terminate the water service of a customer who is in bankruptcy and fails or refuses to enter into a new security agreement with the city to provide assurance of future payments and performance in instances where such is permitted under applicable federal law.
(Ord. 721 § 1)