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Homeowners question sewer warranty offer

Michael Lopardi

Homeowners question sewer warranty offer

CREATED Jun. 25, 2013

Las Vegas, NV (KTNV) -- A letter sent to thousands of Las Vegas homeowners within the last two months is raising some eyebrows. 
The letter, which has the city's seal at the top and is signed by the public works director, includes an offer to buy a warranty from a third-party company on home sewer lines. But some homeowners turned to Action News wondering who paid for the mailers and what the city is getting out of the deal?
"It looks like an extended warranty for automotive cars," said homeowner L.B. Corney.
Corney said he received the letter in May, which includes the warranty offer from Service Line Warranties of America. The policy would cover repairs to the underground lateral sewer line which removes waste water from the home, according to the letter. The cost: $6.75 a month, if enrolled by June 27.
"In my house I have very little vegetation, very little concern that this pipe is going to go bad," said Corney. "For me, it's probably not money well spent."
The Las Vegas City Council approved the deal with the company and the city said the offer is legitimate. But Corney said it also raises ethical questions.
"Is the city logo up for sale? I understand the need to make revenue but is that really where we want to go as an organization, as a community," said Corney.
Public works director Jorge Cervantes said the city will earn $74,000 over the next two years for allowing the company to use the seal on the letter as well as ten percent of revenues from policy sales.
Action News asked Cervantes if it's right for the city to partner with and allow a company to use its logo to sell a product.
"Certainly, that's a policy decision of what the city partners with," said Cervantes. "We did very extensive vetting to make sure it was a reputable company. "
Cervantes said the coverage is optional and the city wants to remind homeowners that they are responsible for maintenance and repairs to the lateral sewer lines. Cervantes said the company, not taxpayers, covered the costs of the letters and the coverage could protect homeowners from expensive repairs to the pipes. The city receives between 30 and 40 calls a year from homeowners with pipe problems, but the total is unclear because some people may bypass the city to get the problem fixed, Cervantes said.
"We certainly wouldn't lend our name, our credibility to a company we didn't feel could stand behind the service they provide to the citizens," Cervantes said.
Service Line Warranties of America currently offers the program in 175 communities around the country, said western general manager Brian Davis in a telephone interview. Davis said the program is backed by the National League of Cities; he also noted the company has an A+ rating from the Better Business Bureau.
Locally, Cervantes said roughly 4,700 people have already signed up for the warranty.