HomeMy WebLinkAboutPolicy 07 - Conditions for Installment or Deferred Payments to the DistrictOTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
CONDITIONS FOR INSTALLMENT OR DEFERRED
PAYMENTS TO THE DISTRICT 07 10/15/84 10/06/10
Page 1 of 2
PURPOSE
To establish a policy regarding conditions for making installment
or deferred payments to the District.
BACKGROUND
Occasionally the District receives requests to allow payment of
certain connection charges on an installment or deferred basis.
Approval of these agreements will occur in very limited
circumstances where it is in the District’s best interest that the
agreement be made. In addition, if the District is to consider
such requests, the District must not be in a position of risk of
loss in the event of non-payment.
POLICY
The following procedures, terms and conditions shall apply to
requests and arrangements for payment to the District on an
installment or deferred basis:
1.Requests for installment or deferred payments shall be
reviewed by the District. Each request shall indicate the
terms desired with a maximum term of 12 months. The person
or party making the request shall furnish all financial
information or data deemed necessary by the District to
review the request.
2.The General Manager shall have authority to negotiate and
execute deferral agreements with residential and non-
residential customers where the value of the agreement does
not exceed the General Manager’s signatory authority as
established in Chapter 2, Section 2.01-D of the Code of
Ordinance. In addition, the General Manager will inform the
Board of such executed agreements within his monthly report
to the Board of Directors.
3.Where the value of the proposed agreement exceeds the General
Manager’s authority, the District shall make a recommendation
to the Board of Directors for approval or disapproval, with
reasons for the recommendation.
4.In emergency situations, the General Manager is authorized to
enter into a deferral agreement exceeding his/her authority
to allow a customer to connect to the District system. The
General Manager shall submit all such deferral agreements to
the Board for ratification at the next regularly scheduled
Board meeting.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
CONDITIONS FOR INSTALLMENT OR DEFERRED
PAYMENTS TO THE DISTRICT 07 10/15/84 10/06/10
Page 2 of 2
5.A minimum down payment of ten percent (10%) of the total
amount to be paid in installments or on a deferred basis is
required and is nonrefundable.
6.Any increases in rates, fees, or charges shall apply to all
connections which have not been made at the time the increase
is adopted, including but not limited to capacity fees and
annexation fees.
7.The only fees that will be considered for deferral are Otay
Capacity Fees and Annexations fees. All labor and materials
costs will not be considered for deferral as this would place
the District in a position of risk in the event of default.
In addition, the District will not make arrangements for
deferral of fees collected by the District on behalf of other
governmental entities. These fees must be paid prior to the
execution of the agreement or payment arrangements must be
obtained from the CWA or MWD by the applicant.
8.For each installment or deferred payment arrangement a
promissory note, payable to the District, shall be executed
to provide for terms of payment of the balance of principal
due, with interest payable monthly at a rate equal to five
percent (5%) per annum over the Federal Reserve Discount
Rate.
9.In addition to execution of a promissory note for the balance
of the payment, the District will consider requiring security
to guarantee payment of the promissory note, such as but not
limited to, a letter of credit, performance bond, lien
contract, certificate of deposit, or other security
satisfactory to the District.
10.An administrative fee for the establishment of a deferral
agreement of $500.00 will be charged for all such agreements.