Raleigh to consider making new water customers put down $100 deposit

Among the items on tomorrow's City Council agenda is a proposal that would require new Raleigh water customers to pay a $100 deposit to get service. Raleigh currently does not require customers to put a deposit down before opening a water and sewer account.

But the city’s Public Utilities and Finance departments say the amount of people skipping out on their water bills has risen in recent years, particularly in the last few months as the economy has deteriorated.

City staff is recommending that new residential and commercial customers be required to put down a $100 deposit beginning Dec. 1. That's the date when the city will switch over to tiered-water rates for residential customers and move to monthly billing, two features made possible by new billing software. Existing customers would not be subject to the deposit ordinance unless they have a poor credit history with the city.

Between 1999 and 2008 the annual amount of bills going unpaid to the Utilities Department has increased from $543,371 to $1,226,850. The utility system’s revenues increased from $37.6 million to $89.3 million during that same period.

The city disconnects on average 1,720 accounts per month with an average bill of $100. Over the last year about $30,000 of unpaid utility bills were due to bankruptcies and about $370,000 was due to bad checks or over-drafts, according to the city. In a memo to the City Council, Chief Financial Officer Perry James and Public Utilities Director Dale Crisp said that “the current economic situation only exacerbates the ability to collect on accounts that have gone in to delinquent status.”

Most other utilities in the Triangle do require new customers to put down a deposit. OWASA and Durham charge $50. Cary charges $60 but will soon raise its deposit to $150.

Raleigh already charges new water and sewer customers a $50 new service fee, meaning residents would need $150 to get service hooked up. The city’s proposal would allow for new customers to have the deposit spread over several bills.

The City Council meets at 1 p.m. Tuesday in City Hall, 222 W. Hargett Street. At 7 p.m the council will hold a public hearing to discuss City Manager Russell Allen's budget proposal.