Title
Consider a memorandum/resolution authorizing an agreement with Utility Service Partners Private Label, Inc., dba Service Line Warranties of America, for the maintenance of sewer service lines within the public right-of-way.
Body
DATE: September 2, 2025
TO: Kent Cagle, City Manager
FROM: Jeffery Reynolds, Executive Director of Public Works
SUBJECT: Enter into an outsourcing agreement with Utility Service Partners Private Label, Inc. dba Service Line Warranties of America for the maintenance of sewer service lines within the public right-of-way.
BACKGROUND AND FINDINGS:
On June 5, 2018, Council requested a future item be placed on the agenda regarding sanitary sewer service repairs in the public right-of-way due to the costly repairs on homeowners. Between June 2018 and January 2019, many options were brought before City Council.
On January 22, 2019, City Council directed Staff to move forward with the City providing repairs and/or replacement of certain sewer service lines within the public right-of-way (ROW) and partnering with Utility Service Partners Private Label, Inc. (USP) dba Service Line Warranties of America (SLWA) to outsource maintenance which will cost 50 cents per month for each residential sewer customer. During Staff's discussions with USP, it was discovered that these types of warranties are not available for commercial establishments due to the larger size of service lines. Staff negotiated an outsourcing agreement and a marketing agreement with USP. Under these agreements, USP would manage the repair and replacement of residential sewer service lines within the ROW, work with the City to determine the location of the leak or blockage, contract with licensed plumbing contractors to perform the work within the ROW, and offer an optional warranty program directly to customers for portions of the sewer service line not covered by the mandatory warranty program. This took effect on May 1, 2019, and Chapter 30 of the Code of Ordinances, was amended accordingly.
In December 2024, SLWA reached out to discuss an amendment to the outsourcing agreement. Over five years of offering the service, SLWA completed over 1,000 claims at a total cost of $4,281,040 with the sewer line warranty; with an average of $4,148.30 per claim. The investment from residents for the five years has been $30.00, which is a very small portion compared to what the repairs would have cost had the city not entered into this agreement.
SLWA is proposing an increase to $1.33 per month per homeowner. This equates to $15.96 per residential home, per year and is included in the Fiscal Year 2026 projected budget. There is an expected increase of up to 5% each year while under contract. Overall, this is still a great savings when compared to what an average sewer line claim could cost a homeowner.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This item conforms with state and local policies.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
Staff has calculated the $1.33 per month added to each residential sewer customer’s base bill will pay for the warranty service; that expenditure will be approximately $536,000 and will be offset by the revenue.
Is this a one-time or recurring revenue/expenditure?
Recurring
Is this revenue/expenditure budgeted?
Yes, upon adoption of the FY 2026 budget.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Yes
RECOMMENDATION:
Authorize the City Manager, or designee, to enter into an agreement with USP/Homeserve for maintenance of the sewer service lines within the public right-of-way for an initial term of five (5) years and authorize the City Manager, or designee, to approve any and all change orders as allowed by state and local law.
DEPARTMENTAL CLEARANCES:
Public Works
City Attorney Office
Finance
ATTACHED SUPPORTING DOCUMENTS:
Agreement
Contract Verification
Certificate of Interested Parties
Presentation