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~i <br />Elk River -~ <br />Municipal Utilities <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />July 3, 2007 <br />To: Elk River Municipal Utilities Commission <br />Jerry Takle <br />Jerry Gumphrey <br />Jim Tralle <br />From: Bryan Adams <br />Subject: Customer Deposit Policy <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />At our June 2007 Elk River Municipal Utilities Commission meeting, one of our agenda items <br />was customer write-offs for unpaid bills. During that discussion the need for a Customer Deposit <br />Policy was introduced. <br />Attached is the following information for your review. <br />1) Proposed Deposit Policy <br />2) Survey of other utilities concerning their customer deposit policy <br />Five to Six years ago, the Elk River Municipal Utilities did have a customer deposit policy. It <br />was discontinued for the following reasons. <br />I) Write-offs were small - at about our current level of 1 %. <br />2) Administrative efforts became burdensome with tracking deposits, interest and letters of <br />credit. <br />3) Perception of electric utilities being hard to work with and need to come to utility office <br />to obtain service. <br />With the economic times, we are seeing many more delinquent bills. Also, the public in part <br />views utility services as an entitlement, not a service that needs to be paid for. The proposed <br />policy offers the following advantages over the previous policy. <br />With the proposed policy residential customers with good credit and providing social security <br />numbers can complete applications over the phone and do not need to come to our offices. This <br />will probably be 75% of our customers. Our previous policy, we only required deposits from <br />rental properties and this could be viewed as somewhat discriminating. <br />