Laserfiche WebLink
fid A i E N �,," lR G ^.,fv <br />RIVERSIDE PUBLIC UTILITIES <br />I �I <br />Board Memorandum <br />BOARD OF PUBLIC UTILITIES DATE: February 7, 2014 <br />ITEM! NO: 6 <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 on <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 />commercialDeposits are collected from customers who wish to establish service and do not have a good 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 $3.9 million. Currently, 31 % of that total <br />represents <br />marketThe minimum residential deposit is $100 for electric and $40 for water service. Commercial customers ar <br />charged a deposit equal to two month's service for the location. Interest is applied monthly to the deposit I <br />received. Deposits are held for one year or upon termination of services,,,, If the customer account is in goo I <br />standing, the deposit plus interest, is applied to the customer's account to offset any outstanding balance o <br />refunded to the customer if no balance is due. I <br />The previously approved methodology used to determine the amount of interest to accrue monthly is base <br />on an average of local banks' passbook rates. The rate calculated for 2014 is 0.03% for deposits effective a,.. <br />of March 2014. The investment of funds on deposit must be short-term and highly liquid. The calculation i <br />performed annually and is reflective of current <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: Belinda J. Graham, Assistant City Manager <br />Approved as to form: Gregory P. Priamos, City Attorney <br />