Friday, January 30, 2015

City of Columbia sells endorsement to service contract provider HomeServe USA

Municipal water utility is third in state to ink a deal

Posted by Paul Bowers on Fri, Jan 30, 2015 at 7:34 AM

A third public body in South Carolina has signed a marketing agreement with HomeServe USA, a Connecticut-based company that sells service contracts on residential water and sewer lines.

Under the terms of a contract that Columbia City Council approved Tuesday night, HomeServe will be allowed to use an endorsement letter bearing the city seal in solicitations that it mails to customers of the city's water and sewer system. The advertisements could be sent out at least as often as five times a year.

In exchange for these exclusive marketing rights, HomeServe will pay the City of Columbia $55,000 up front, plus a 7-percent commission on all monthly policy payments from Columbia customers. HomeServe will also pay the city an additional $10,000 per year that can either be used to pay low-income residents' water and sewer bills or to provide water line repairs to households that cannot afford the service.

City Council's decision comes at a fortuitous time for the cash-strapped municipal water and sewer system. As The State has reported, Columbia needs to make $750 million in infrastructure improvements to comply with the federal Clean Water Act, and city officials earlier this month started exploring the option of selling or leasing the water and sewage system to a private, for-profit company.

The City of Columbia's agreement comes close on the heels of the Beaufort-Jasper Water and Sewer Authority's Jan. 5 decision to enter a marketing agreement with HomeServe. In exchange for the right to use the BJWSA's logo in advertisements, HomeServe agreed to pay the utility a $50,000 set-up fee and a 12-percent commission.

Previously, in September 2013, the Charleston Water System became the first utility in South Carolina to take money from HomeServe when it licensed away its logo for $120,000 and a 12-percent commission. Following a City Paper investigation that began in December, CWS announced this week that it would no longer allow HomeServe to use the utility's logo on the outside of mailing envelopes or on letters that it sends to Charleston-area homeowners.

HomeServe was originally one of three companies in the running for Columbia's marketing contract, eventually beating out New Jersey-based American Water Resources and Pennsylvania-based Utility Service Partners. HomeServe provided the Charleston Water System as a reference for Columbia officials.

Here's a copy of the solicitation letter that Columbia residents can expect to start receiving in the next eight to 10 weeks:

Columbia HomeServe Letter by CharlestonCityPaper

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