City opts to not pursue service line protection plan

Monday, April 26, 2021

LE MARS — The Le Mars City Council considered authorizing a marketing agreement with HomeServe USA Corp to provide residential service line protection in Le Mars.

The council had a lengthy discussion on the issue before a decision was made.

The topic was first brought to the council in February, and was described as a program which would allow property owners a variety of coverages: External Water Service Plan; External Sewer/Septic Line Plan; and Interior Plumbing and Drainage Plan.

At that time, the council approved sending out a Request for Proposal (ROP) to see what companies would provide and the amount of city involvement.

According to City Administrator Jason Vacura, two requests were sent out and only one proposal from HomeServe USA Corp was received by the March 26, 2021, due date.

The program would provide service plans for residential exterior water service lines and residential exterior sewer service lines. Enrollment in the program is not required by the city and is 100 percent voluntary. The city’s involvement is in the form of a partnership through the marketing of the program.

The city would receive a 10 percent commission on enrollments, and there is no cost to the city for participating in the program.

One of the requests the company is asking for in its agreement is to use the City of Le Mars logo on letterhead sent to homeowners about the insurance.

City Attorney Michael Murphy said the company has its program in Sioux City.

“It’s an insurance program,” he said. He noted Sioux City staff had some increased workload due to the fact that city letterhead was used, and citizens thought the program was being offered by the city, which it was not.

“I would anticipate that our city staff would get more calls,” Murphy said.

Water Superintendent Rich Sudtelgte said one of the advantages would be citizens would get a cheaper monthly rate on this insurance rather than adding it to their homeowners or property insurance.

Sudtelgte recommended endorsing the program, as it could save citizens money.

“It would also educate them that those service lines are theirs, they own them. It covers from the tap on the main to the meter, so if a person has a bad valve in their basement that’s not working before the meter, it’s covered. If their curb box doesn’t work, it’s covered. Our code requires it,” Sudtelgte said.

Council member Clark Goodchild had reviewed the program and talked with his insurance agent.

“I personally think this is a very, very, very good program. You can choose to take it or not take it, it doesn’t matter,” he said. “I think it’s a good value should you need either of these services, so that is my take on it. I think there are a lot of benefits to doing this.”

The program would cover all single family dwellings. The coverage is purchased by the property owner.

Council member Ken Nelson thanked Sudtelgte for all the work he has done on researching the company, but said he had concerns.

“I have had a discomfort with the company, or the fact that we’re endorsing a company. I just worry about what happens 20 years from now if the company goes bankrupt,” he said. “I don’t know but I have a feeling that homeowners will come back to the city and say, ‘well you brought these people in.’ Is there some liability for the city? That’s been my concern from Day One. I just don’t have confidence that this company may be here in 30 years,” he said.

Council member Rex Knapp focused on the endorsement aspect of the agreement.

“I have a hard time endorsing any business to sell business stuff within the city, or giving them our mailing list of homes to go and sell,” he said. “I also know I have about 100 people that understand they own that line, but 4,200 that don’t.”

Vacura said the next step would be to come up with an agreement with HomeServe and work through how it would be advertised.

Knapp said, “That makes a difference for me when they (property owners) open up a letter and it says ‘City of Le Mars.’”

“They absolutely want the city’s letterhead to go out on these letters,” Murphy said.

Knapp admitted he was a fence sitter on the issue, and questioned how many would sign up for the program.

Following the discussion, Goodchild made a motion to authorize staff to prepare a marketing agreement with HomeServe USA Corp to provide residential service line protection.

Mayor Dick Kirchoff asked three times for a second to the motion but there was none. The motion died for lack of a second.

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