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• DATE • April 8, 1986 TO Bill Hawkins, City Attorney FROM Marilyn G. Anderson, Clerk -Treasurer SUBJECT: Page 69, City Code Book 401.31 Deposit. Each user shall pay to the city a dep- osit, before connecting to the municipal water system, of a sum of $35.00, or a sum equal to 6 months of ant- icipated water usage, whichever is larger. Such sum shall be returned to such user upon his discontinuance of municipal water service if the user's obligation for water service has been met; if a balance remains owing, such sum shall, after 30 days after such discontinuance, be applied to such obligation. Would you please review this section of the City Code. I believe it is now illegal for the City to hold these deposits without pay- ing interest. A number of municipal water users have questioned the staff on this matter. We have said we would ask the City Att- orney for his opinion. We now hold deposits for about eighty re- sidents. We now have all the utility statements on our computer. However, the computer program is unable to handle these $35.00 deposits. I would like to see this section of the City Code eliminated since $35.00 rarely covers one quarter of service, let alone six months. In addition I would like to return the deposits without interest if possible when the current owner moves from the residence. Ev- entually we will not have to account for any of these deposits. Would you please address this issue at the April 28, 1986 Council meeting. Please address the legality of these deposits, whether they should earn interest and any problems involved in returning the deposits. I should have your written response by April 22, 1986 so that I can include it in the Council packets. Thank you for your attention to this matter. •