Following the uproar from upset residents, the Dallas City Council met today with the city’s attorneys to discuss a contract approved with Service Line Warranties of America (SLWA). SLWA is a private company that sells homeowner warranties for water and sewer lines. Now, homeowners are finding a confusing letter in their mail pitching a sewer warranty program, with the city’s logo and signature.
At first glance, many residents believe the letter was sent from the city; however, the true sender is SLWA. Not only does the letter have the city’s logo, it is also signed “City of Dallas.” The deceptive manner in which the program was launched is costing the city its reputation. Residents are not sold that the program is legitimate; apparently they don’t sell out as quickly as the city.
HOW MUCH IS THE CITY MAKING?
The deal between the city and SLWA allows the warranty company to use the city’s logo to recruit potential customers. For its name, the city gets $450,000 along with a 75 cent-per-month royalty payment (per new account), and bonus payments from $60,000 to $153,000 (dependent on number of accounts).
HOW MUCH DO HOMEOWNERS PAY?
Homeowners who choose to purchase the warranty will pay $6.50 a month. The warranty only protects the outside sewer line that connects to the city’s main sewer line. If damage occurs to the outside line, the insurance pays up to $4,000. Is this the best deal available to Dallas homeowners? No. HomeServe USA pitched a similar program to Dallas residents. The British-owned company is cheaper than SLWA, charging only $4.99 a month and covering over $7,000 in damage.
Several council members are now rethinking the deal with SLWA. The contract was one of 27 items that was approved en masse on April 22nd. Some council members admit they were not aware of what they were voting for, because the contract with SLWA was a consent item. Consent items are generally noncontroversial matters. Now, several council members regret putting the city’s name on a letterhead to promote SLWA.