Elk River Municipal Utilities Customer Deposit Policy

In order to minimize the risk of collecting payments from customers who default on their accounts, the Elk River Municipal Utilities (ERMU) has adopted this Customer Deposit Policy. The amount of deposit required will depend on the risk identified with the customer. To assess this risk, the ERMU will utilize available known credit history through on – line resources and their applicable nationally recognized scoring methods (such as FICO or Beacon) and/or ERMU past experience with the customer.

For residential customers, the risk of nonpayment will be assessed as follows:

A: If credit score falls above 68% probability of non default and no negative history (disconnection for non- payment or late payment 2 times in 12 months) with the ERMU, no deposit is required. Failure to provide a social security number will result in the required deposit.

B: For all others, a deposit of 2 times estimated average monthly utility bill (electric, water, sewer) will be required before utility service will be extended. With good credit history for a period of 3 years, the deposit will be credited to the customer’s utility account. The appropriate interest will be applied to the monetary deposit per State statutes.

For commercial and industrial customers, a service agreement would need to be signed that identifies the guarantor of their business and the guarantor’s social security number. A deposit of 2 times the estimated monthly bill will be required. The deposit shall be in the form of a cash deposit, personal payment guarantee, or an irrevocable letter of credit. The irrevocable letter of credit will be renewed as required and failure to do so will result in a charge equal to the amount of the letter of credit applied to the monthly utility bill. With good payment history for a period of 3 years, the deposit will be credited to the customer’s account or personal guarantee/ letter of credit will be returned to customer.

For residential, commercial or industrial customers who are disconnected for nonpayment, a 2 month estimated utility bill deposit will be required before reconnection.