HomeMy WebLinkAbout05-21-2019 Item 08 - Allow Alternate Forms of ID or Deposit to Establish Utility Accounts
Department Name: Utilities
Cost Center: 6101
For Agenda of: May 21, 2019
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Mychal Boerman, Water Resources Program Manager
SUBJECT: ALLOW FOR ALTERNATE FORMS OF IDENTIFICATION OR A DEPOSIT
TO BE USED FOR ESTABLISHMENT OF UTILITY ACCOUNTS
RECOMMENDATION
Adopt a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo,
California Repealing and Replacing Resolution No. 10904 (2018 Series) to Establish a
Reconnection Fee and Refundable Deposit Requirements.” (Attachment A)
DISCUSSION
Background
Social Security numbers have been used for many years as a key identifier in the financial
services industry. The City is proposing to eliminate the collection of Social Security number
data in favor of other verification methods for water and sewer accounts to enhance security,
privacy, and convenience for the customer.
In order to establish water and wastewater service in the City, customers are currently required to
provide their Social Security number. If the final balance due on a water and wastewater account
is not paid, a Social Security number is used by the City’s collection agency, Financial Credit
Network (FCN), as a means to locate the customer, attempt to collect the balance due, and for
credit reporting purposes. As an alternative, the City currently allows a customer to pay a deposit
to avoid providing a Social Security number.
Proposed Change
Staff proposes to collect a state issued driver’s license number in lieu of Social Security number.
If the customer does not have a state issued driver’s license, another form of state or federal
government issued identification with a birth date would be accepted. If the customer does not
have, or chooses not to provide, another form of state or federal government issued identification
with a birth date, they would be required to pay a deposit. FCN has confirmed that a state or
federal government issued identification that includes a birth date is as effective for collection
purposes as a Social Security number.
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The need to change to accepting a state issued driver’s license number or government issued
identification rather than a Social Security number arose while the City’s Information
Technology Division (IT) was conducting a technology risk assessment. IT staff identified
collecting and processing Social Security numbers on City systems as an area of risk for identity
theft and similar crimes. Social Security numbers previously collected for existing customers are
stored on a third-party server owned by the City’s Utility Billing software provider and are
secure.
Previous Council or Advisory Body Action
In 1993, by memorandum, the City’s Finance Director, as permitted by Ordinance No. 1204,
declared that if customers decline to provide their Social Security number when establishing a
City water and wastewater account, they are required to pay a deposit prior to the start of service;
and established a deposit will be collected when an account is shut off for non-payment.
In 2018, the City Council adopted Resolution 10904 (Attachment B), raising the required deposit
from $90 to $300 and including the deposit on the City’s annual update of the Master Fee
Schedule to ensure that the required deposit is kept up-to-date.
Policy Context
Resolution 10904 requires a customer to provide a deposit of $300 to establish water and
wastewater service if a Social Security number is not provided. There are no state or federal
requirements associated with the City’s policy or deposit requirements.
Public Engagement
Public engagement was not required for this change to be made and no formal noticing
requirement was necessary. This change should not have measurable impact on future customers
who are signing up for service but will reduce potential identity theft risk. In order to
communicate this change with customers, the City’s Utility Billing website and bill processing
site will be updated to reflect these changes.
CONCURRENCE
Utilities Department staff collaborated with staff from the Finance Department and IT Division
regarding the proposed changes. Finance and IT concur with the information provided in this
report.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended action in
this report, because the action does not constitute a “Project” under CEQA Guidelines Sec.
15278.
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FISCAL IMPACT
Budgeted: N/A Budget Year: N/A
Funding Identified: N/A
Fiscal Analysis
In 2017-18, the Utilities Department referred $80,054 in outstanding payments from water and
wastewater accounts to FCN for collection. Of that amount, $33,638 was recovered by FCN. The
unrecovered funds account for 0.12% of the Utilities Department’s revenue for 2017-18. The
level of recovery is not expected to change because FCN considers a government issued
identification with a birth date to be as effective for collections purposes as a Social Security
number.
ALTERNATIVES
The City Council could take no action, thus continuing to require a Social Security number or
deposit is provided when signing up for a water and wastewater service. This is not
recommended because continuing to collect and store Social Security numbers exposes the City
to identity theft risk.
Attachments:
a - Resolution Amendment to Rescind and Replace 10904 (2018 Series)
b - R-10904 rescinding and replacing Resolution No. 7080-1992 series to establish a
reconnection fee and refundable deposit
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R ______
RESOLUTION NO. _____ (2019 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA RESCINDING AND REPLACING RESOLUTION
NO. 10904 (2018 SERIES) TO ESTABLISH A RECONNECTION FEE AND
REFUNDABLE DEPOSIT REQUIREMENTS
WHEREAS, Chapter 13.04.030 of the City of San Luis Obispo Municipal Code provides
that a deposit may be required prior to initiating water and wastewater service and allows such a
deposit to be established by Resolution; and
WHEREAS, in 1993, by memorandum, the Finance Director, as permitted by ordinance
No. 1204, declared that if a customer declines to provide their Social Security number when
signing up for City water and wastewater service, they are required to pay a deposit prior to the
start of service; and established no deposit will be collected for non-payment of a balance on an
active account; and
WHEREAS, current processes for collection of unpaid balances on closed accounts
through the City’s collection agency depend on a Social Security number for identifying the
debtor; and
WHEREAS, collecting and processing Social Security numbers increases the risk of
identity theft,
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
that:
SECTION 1. A state or federal issued government identification with a date of birth will
be collected in lieu of a Social Security number at time of account setup;
SECTION 2. A deposit will be collected for establishment of a water and wastewater
service when the customer declines to provide the number of a state or federal government
issued form of identification with a date of birth. This deposit amount is set at $300 and will be
included in the City’s Master Fee Schedule and will be increased annually by the applicable
inflator according to the Master Fee Schedule process.
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Resolution No. _____ (2019 Series) Page 2
R ______
SECTION 3. Resolution No. 10904 (2018 Series) is hereby rescinded and replaced
according to the Resolution set forth herewith.
Upon motion of _______________________, seconded by _______________________, and on
the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2019.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
City Clerk
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RESOLUTION NO. 10904 (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, RESCINDING AND REPLACING RESOLUTION
NO. 7080 (1992 Series) TO ESTABLISH A RECONNECTION FEE AND
REFUNDABLE DEPOSIT REQUIREMENTS.
WHEREAS, Section 13.04.030 of the City of San Luis Obispo Municipal Code provides
that a deposit may be required prior to initiating water service and allows such a deposit to be
established by resolution; and
WHEREAS, in 1992, Resolution No. 7080 established a refundable deposit for all
accounts for which water has been disconnected for non-payment; and
WHEREAS, in 1993, by memorandum, the Finance Director, as permitted by Ordinance
No. 1204, declared that if customers decline to provide their social security number when signing
up for City utility service, they are required to pay a deposit prior to the start of service; and
WHEREAS, current deposit levels are ineffective and insufficient in securing owed
balances. In the case of termination of service due to non-payment, they add additional hardship
to those already struggling to pay their utilities bill; and
WHEREAS, current processes for collection of unpaid balances on closed accounts
through the City's collection agency depend on a social security number for successfully
identifying the debtor.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. No deposit will be collected for non-payment of a balance on an active
account.
SECTION 2. A deposit will be collected for service request when the customer declines
to provide their social security number. This deposit amount is set at $300 and will be included
in the City's master fee schedule and increased annually by the applicable inflator according to
the master fee schedule process.
R 10904
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Resolution No. 10904 (2018 Series) Page 2
SECTION 3. Resolution No. 7080 (1992 Series) is hereby repealed to the extent
inconsistent herewith.
Upon motion of Council Member Rivoire, seconded by Vice Mayor Christianson, and on the
following roll call vote:
AYES: Council Members Gomez, Pease and Rivoire,
Vice Mayor Christianson and Mayor Harmon
NOES: None
ABSENT: None
The foregoing resolution was adopted this 5th day o.
ATTEST:
Teresa Purrington
City Clerk
FO
Jffir-istine Dietrick
city Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this 2514 day of v-e _ , Zp 1$
Teresa Purrington
City Clerk
R 10904
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