Why a Deposit?

When applying for utility services, you may be asked to provide a deposit, to mitigate the debt risk associated with non-payment of utility bills. Westminster's rule of thumb for deposits is "Good payment history...Low or no deposit/ Poor payment history...Larger deposit."

To hedge the level of “bad debt” risk incurred from unpaid customer utility fees and charges, many utilities use the services of a database called “Utility Online Exchange” to determine the City's level of risk associated with your account. The closest Utility Online Exchange is Blue Ridge Electric Cooperative (BREC).  Through their extensive database, utilities are given an indication of a customer’s level of risk and then can determine any deposit requirements.  

Rather than providing a FICO credit score, Online Utility Exchange provides a simple “green light”, “yellow light”, or “red light” with green equating to being very good and red equating to being poor.

Deposit Amounts:

The following table will be used for deposit requirements:

* Young prospective customers may not yet have been able to establish a credit level and therefore would be charged these amounts – the same deposit levels currently being charged.

Initial Risk:

In the event that Online Utility Exchange indicates that a prospective customer has a red or yellow level of risk, the City will not collect the deposit in the form of a check.  Any prospective “yellow” light or “red” light customer will be required to pay their deposit by cash, money order, credit card, or debit card.

Risk Reassessment  - Customer Initiative:

After two years of good payment history, a customer who was initially required to place a deposit based upon either a “Red” light or a “Yellow” light, may (at their initiative) request that the City again process their name through the Online Utility Exchange. The customer shall pay a fee to offset the cost of the City processing their name again with Online Utility Exchange.

Deposits on successfully reassessed accounts will reallocated to the next lowest risk level, with the difference being credited to the customer’s account.

Risk Reassessment  - City Initiative:

At any time whenever the payment history of any account may create concerns for increased levels of risk, the City staff may process an increase of that account’s deposit.  After the first such occurrence, the customer will be sent a warning letter advising that the second occurrence will prompt a higher deposit requirement.  If the occurrence is the second returned check, the account will be placed on a “cash-only” status as is done currently.