VALPARAISO | The city's water department has switched to a "No deposit but plenty of returns coming" policy.
Residential water customers have paid a deposit since the 1940s, Customer Service/Billing Manager Mary Woodworth told the city's Utilities Board on Tuesday. The utility currently has almost $200,000 in customer deposits, including about $82,500 from former customers.
"Many of these deposits date back to the 1990s with a few even older than that," she said of the latter.
The utility's policy has been to return the $50 deposit after two years, if the customer maintains a good credit history of paying bills. Woodworth told the board the Indiana Administrative Code states customers are trustworthy until they prove themselves otherwise by becoming delinquent or using a check with insufficient funds.
"To cover the state requirements, we must make an attempt to refund these deposits," Woodworth said.
Arranging refunds for existing customers will begin immediately. Those for the 2,074 inactive accounts will be somewhat tougher. Woodworth said the money was held for various reasons. Sometimes the person moved, and other times the money was held to make sure the sewer bill was paid.
Many involve delinquent accounts, and Woodworth said the utility plans to be more aggressive in trying to collect on those in the future. Board Attorney Mike Langer said that has been a catch-22 in the past because it costs $105 to file a claim in small claims court, and many of the bills are for $100 to $300, making the return on the filing investment minimal even for those the city was successful in collecting.
Woodworth said she planned to start mailing checks to the last known address of the inactive accounts, and, if the checks came back as undeliverable, the unclaimed deposit would be listed on the utility's website for a year. If not claimed, it would be put in the operating fund.
The board decided it would be better to send a letter first rather than have the checks circulating in the mail. The remaining $114,000 will be refunded immediately to those with a good credit history and no deposits will be charged for new customers in the future.
Woodworth said the "no deposit" policy could double to utility's bad debt write-off each year. It was just under $10,000 in 2012, and she estimated it could be $20,000 this year. That is still less than one percent of the total water revenue, Utility Director Steve Poulos said.