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'df dwt 1; 11. R I. dN 11 R li ''r <br /> RIVERSIDE PUBLIC UTILITIES <br /> P U B L I C U T I L I T I E S Board Memorandum <br /> BOARD OF PUBLIC UTILITIES DATE: FEBRUARY 20, 2015 <br /> ITEM NO: 7 <br /> SUBJECT: INTEREST RATE PAID ON CUSTOMER DEPOSITS <br /> ISSUE: <br /> The item for Board of Public Utilities consideration is approval of the annual interest rate to be paid an <br /> customer deposits, as provided by Riverside Public Utilities' Electric and Water Rules. <br /> RECOMMENDATION: <br /> That the Board of Public Utilities approve the annual interest rate of 0.03%for customer deposits. <br /> BACKGROUND: <br /> Deposits are collected from customers who wish to establish service and do not have a goad credit history or <br /> from customers who have been disconnected and want service to be reconnected. Approximately 16%of the <br /> Utility's customers fit this category, with combined deposits totaling $4.Q million. Currently, 34%of that total <br /> represents commercial customers. <br /> The minimum residential deposit is$100 for electric and $40 for water service. Commercial customers are <br /> charged a deposit equal to two month`s service for the location. Interest is applied monthly to the deposits <br /> received. Deposits are held for one year or upon termination of services. If the customer account is in goad <br /> standing,the deposit, plus interest, is applied to the customer's account to offset any outstanding balance or <br /> refunded to the customer if no balance is due. <br /> The previously approved methodology used to determine the amount of interest to accrue monthly is based <br /> on an average of local banks' passbook rates. The rate calculated for 2015 is 0.03% which remains the <br /> same as 2014. The investment of funds on deposit must be short-term and highly liquid. The calculation is <br /> performed annually and is reflective of current market conditions. <br /> FISCAL IMPACT: <br /> There is no fiscal impact associated with setting the interest rate paid to customer deposits. <br /> Prepared by: Laura Chavez-Nomura, Utilities Assistant General Manager Finance/Administration <br /> Approved by: Girish Balachandran, Public Utilities General Manager <br /> Approved by: Stephen H. Badgett, Interim Assistant City Manager <br /> Approved as to farm: Kristi J. Smith, Interim City Attorney <br />