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Home My WebLink About04. Sewer Service Line Warranty ProgramCentral Contra Costa Sanitary District July 6, 2015 TO: ADMINISTRATION COMMITTEE le VIA: ROGER S. BAILEY, GENERAL MANAGER FROM: ANN SASAKI, DEPUTY GENERAL MANAGER SUBJECT: SEWER SERVICE LINE WARRANTY PROGRAM In April 2015, the District received a presentation from Utility Service Partners (USP) to work in partnership with the District to provide a service line warranty program. The service line warranty would cover the underground service line from the point of connection to the District sewer to the home. USP is proposing to work in partnership with the District to provide this service to our customers. USP would provide and manage all aspects of the service at their expense and would seek the District's endorsement on their mailings, in exchange for financial benefit to the District. USP will be present at the July 6, 2015, Administration Committee meeting to provide an overview of the services that would be provided under the program and the benefits to the District. In general the program would provide the following services: • Up to $8,000 in coverage per repair incident o $4,000 per occurrence o $4,000 allowance for public street and sidewalk cutting, if needed • No annual or lifetime limit • No deductible • Repairs made only by licensed, local contractors and are warranted for one year USP is currently providing similar services to 250 cities, including the cities of Phoenix, Tucson, Mesa, and San Diego. In these cities, USP has customers enrolled in 69,608 service warranty contracts, both water and wastewater. There have been no denied claims in San Diego, Mesa or Tucson. Phoenix has been operational since 2012 and has 36,864 active warranties. More than 97 percent of claims are approved and 99 percent of those fall within the coverage limits. USP has maintained a 95 percent or better customer service rating. A breakdown of enrollment and claims are as follows: Administration Committee Page 2 July 6, 2015 Partner Date Implemented Warranty Enrollments (Water and Wastewater) Amount of Claims to Date Number of Claims Denied San Diego 2012 7,062 $205,086 0 Tucson 2014 16,662 $232,751 0 Mesa 2013 9,020 $122,680 0 Phoenix 2012 36,864 $964,201 48 Total 69,608 $1,524,718 48 Of the denied claims: 77.1 percent were denied because the customer was not actually enrolled in any of the services under the program. • 12.5 percent were denied because the problem existed before the customer enrolled in the program. • 10.4 percent were denied because they were outside of the terms and conditions. Most of these were because the actual problem existed inside the home and the product they were enrolled for was an external sewer or water line policy. Others were issues with water meter or hose spigots. As financial consideration, USP would be offering the District the following financial benefits for the partnership: An upfront brand license fee equal to $1.00 per the District's residential connection, payable upon the following terms: • One -half at the time of the launch of the initial marketing campaign • One - quarter at year two • One - quarter at year three • An annual royalty payment of $0.75 per paid service per month of enrollment • A bonus pool equal to $1.00 per District residential connections will be available for penetration rate milestones over the three year term The City of San Diego has been extremely satisfied with the program and from the comment cards they have seen, the customer service provided has been very good. While San Diego has experienced lower revenue than expected, they have stated that USP has been a great and reputable company to work with. Other firms that provide this type of service include HomeServe USA, which has partnered with Contra Costa Water District, Dublin San Ramon Services District, and Alameda County Water District to offer water line protection. N: \POSUP \Board of Directors \Board - Administration Comm ittee\201 5\Sewer Service Line Warranty Program 07- 06- 2015.docx Administration Committee Page 3 July 6, 2015 Some of the reasons that the District may want to consider partnering on a service line warranty program include: • Enhanced customer satisfaction. This optional coverage provides a way for customers to get service laterals repaired. • Educational outreach to provide District customers with a reminder that they are responsible for the service lateral on their property. • Diversification of the District's revenue stream. N: \POSUP \Board of Directors \Board - Administration Comm ittee\201 5\Sewer Service Line Warranty Program 07- 06- 2015.docx Building Peace of Mind, One Community at a Time Service Line Utility Service AL Warranty Program 50% of individuals surveyed could not afford a hypothetical emergency expense of $400 without selling belongings or borrowing money. - Federal Reserve 10,000 Americans reach retirement age every day Median age of home in the U.S is 40 years (1975) Water /sewer line repairs can range from $1,200 to over $3,500. "It's alarming, " said Gail Cunningham, a spokeswoman for the NFCC, a Washington, DC -based non - profit. "For consumers who live paycheck to paycheck -- having spent tomorrow's money -- an unplanned expense can truly put them in financial distress, it Utility Service AL Partners, [n� Lll� �F As their trusted utility company, you can help to offer your valued customers a low cost warranties that cover the costs of repairs and give them a fast, easy process for having their problems solved. No deductibles, no call out fees, no hidden charges, no forms to fill out. Utility Service Part r:. Utility Service TI: arl , Founded in 2003, USP was created to assist NATIONAL municipalities and utility companies in protecting LEAGUE their customers from the high cost of unexpected of CITIES Q" home repairs. Backed by Macquarie Capital. ACCREDITED A+ Chosen to administrator the National League of BBB Cities Service Line Warranty Program BBB Torch Award for Marketplace Ethics 240+ cities in 32 states are participating in the program E P,,lu,manl,• Inlronl, Y 201)WMwv Wt•atnm RwnyNarW BcfIC/ BWrMw Wla �,� Invested more than $64 million in private infrastructure B✓RRRR repairs Returned nearly $4 million to cities through revenue KANSASCITY M I S S O U R sharing component THE CITY OF SAN DIEGO A+ BBB rating and Torch Award recipient Tulsa Wneha Fublic PowerDisfnd stlllwater Y/`�: ' 4 oL Do -ITTLS ROCK �--- _ .�, , mesa a z MIDLAND `',i9L�a D NORTH LAS VEGAS F.-•G 1r4,, F ._ II I I) • NORWT CITY OE ABILENE TFD �� (.ii1 �:I IiX1'.�� qQ��Y Cl�� '. Vlanta / „r, yC ,_..... U IN Ut I'ALMD: \LI w�q•�•�'` �y- ��G1,Yv� +L t.t.�� s� ►�.t.r- Ci of Phoenix ooessn j11 Utility �zp Service Pari. Homeowner can enroll in sewer line protection for leaking, clogged or broken water and sewer lines where the flow of the line is impeded due to normal wear and tear, ground shifting or tree roots. Coverage includes: Up to $8,000 coverage per repair incident. $4,000 per occurrence, plus an additions $4,000 allowance for public street and sidewalk cutting, if needed. No annual or lifetime limits No deductibles, service fees, forms, or paperwork 24/7/365 availability Repairs made only by licensed, local contractors This program does not cover: damage to a sewer line that is caused directly or indirectly by the homeowner, a third party, natural disasters, acts of God, updating and /or moving lines where the flow of sewage is not impeded, in order to meet code, law, or ordinances or to satisfy directives of the sewer utility company or others, including inflow and infiltration issues or mandated separation of storm and sanitary drain lines; any shared sewer line that provides service to multiple properties, detached houses, secondary buildings or branch lines, whether known or unknown; commercial properties, mobile homes, primary sanitary lines that are over six (6) inches in diameter, lift stations or lift pumps, sump, trash or grinder pumps or storm sewer laterals; any damage /cleanup to the inside of the home, including personal property, or replacement or "matching" of any floor covering or affected area (e.g. carpet, hard wood, marble, ceramic tile, dry wall, paint, plaster or wallpaper, etc.). . Utility/ A Service Keep our promise to your homeowners 97.55% claim approval rating 1.13% exclusion from Terms and Conditions 0.26% non - active 1.06% customer was not enrolled in the warranty for which they had filed a claim 95% customer satisfaction rating Saving homeowners from financial difficulty The program has helped more than 100,000 homeowners save more than $64 million (USID) in service line repair costs Utility Service i ,• A Local Contractors —The Face of our Company Contractor paid by USP Customer Surveyed Problem occurs Repair Completed Customer calls in — 24/7/365 Contractor Dispatched CONTRACTOR NETWORK oe Contractors who become part of our network must first pass a third -party background check and service guidelines established by USP. The Contractor Services Team welcomes the input of local leaders who are often most aware of frequently used contractors in their respective communities. i-imer Utility Satisfaction Service Customers who had repairs performed were surveyed. Respondents stated: "Awesome warranty for this price - why would you NOT get it ?" - William P., Phoenix, AZ homeowner V is nice to have peace of mind about high costs of repairs." - Michael M., Phoenix, AZ homeowner Dear Felicia, On Christmas Day my sewer line backed up into my house and into my tub! I could not flush toilets or take a shower or wash dishes or clothes or even my hands. It turned out to be due to a clogged sewer line in my front yard. Thanks to you, I had the warranty and did not have to pay for the $2,000 plus repair! Thank you! The warranty company had good customer service and the local plumbing company that they sent to do the work WAS AMAZING! They did a wonderful job and were very respectful of my property (and my anxiety about the situation). Thank you so much Felicia for always looking out for us! - Cindy D., homeowner; Atlanta, GA Utility Service "The Service Line Warranty Program helps Phoenix residents and the city government. Revenue from the program goes to core city services like police, fire, parks, libraries and senior centers. The warranties give residents an affordable option for repairs to their sewer and water lines." - Jon Brodsky, Public Information Officer - Phoenix, AZ EXPERIENCE REPUTATION PARTNERSHIP "The city has fully vetted this program and conducted proper due diligence. The program is endorsed by the National League of Cities, North Central Texas Council of Governments, multiple state municipal leagues and over 200 cities nationwide. They also have an exemplary BBB record dating back to 2003." —Todd Gloria; City Council, San Diego, CA Utility Service Partners.. After an exhaustive review of providers, Utility Service Partners was exclusively chosen to administer the National League of Cities Service Line Warranty Program Also Endorsed by: • North Central Texas Council of Governments • Iowa League of Cities • West Virginia Municipal League • Oklahoma Municipal Services Corporation "This award underscores one of the primary reasons the National League of Cities selected USP as a partner and extended our agreement for another five years. The organization's exemplary record of customer service and transparency is what has driven the success of this partnership over the years." — Clarence Anthony, Executive Director National League of Cities • League of Arizona Cities and Towns • Indian Nation Council of Governments • Local Authority Services - Canada Utility Service + USP: Pay for and organizes all the marketing, printing, assembly, postage Handle all sales inquiries Process application forms and payments Issue service agreements Operate the emergency hotline 24 hours a day, 365 days a year Build and manage the contractor network Deploy jobs to contractors and manage through completion Ensure customer satisfaction Partner: Approve all marketing materials Receive a risk -free revenue share on each contract enrollment Receive the customer service value and improved satisfaction this program provides Utility Service RIT -I! to USP has proven that a company committed to providing exceptional service and a valuable product at a fair - market price can successfully partner with local government USP's Partnership with NLC + Experience + Reputation = Trust for you and your residents USP will keep its promise to our customers Next Steps Internal approvals Simple agreement -4 Marketing plan