DEPARTMENT: Finance Department
DEPARTMENT HEAD: Troy Elliott, Deputy Chief Financial Officer, Finance
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT: Utility Service Line Warranty Program Provider
SUMMARY:
This ordinance authorizes a contract with Utility Service Partners Private Label, Inc. (USP) to implement a Utility Service Line Warranty Program, where USP will market to and contract directly with residents, selling warranties to cover repairs to their water and sewer plumbing. As compensation, the City will receive royalty payments on the sales and a brand licensing fee with a guaranteed minimum amount over five-years of $2.5M.
BACKGROUND INFORMATION:
City of San Antonio residents may experience unexpected and potentially costly water and sewer line repairs. The San Antonio Water System (SAWS) is responsible for maintaining the water line from the main to the resident's water meter or to the property line for the sewer line. There can be confusion over where SAWS' responsibility ends and the resident's responsibility begins. The Utility Service Line Warranty Program offers residents warranties that covers the cost of repairs in their area of responsibility.
For a monthly premium, the Program provides coverage for water, sewer, and/or indoor plumbing that is on the resident's side of the meter and provides education and awareness on the issue through the company's marketing materials. The Program is voluntary and has no deductibles, annual limits or life-time limits; however, there is a per incident cap of $3,000 for indoor plumbing and $4,000 for water or sewer line repairs.
Premium *
Coverage
Monthly
Annually
Sewer
$6.50
$73.00
Water
$4.50
$49.00
In-home plumbing
$6.99
$78.88
Total
$17.99
$200.88
* The contract contains a price reopener in the third-year to allow the vendor to review their historic claims experience prior to setting the premium for years 3, 4 and 5. The contract specifies the new prices, if any, must be agreed upon by the ...
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