Water & Sewer Utility Deposit Bond - City of Hamilton, AL in Alabama

Brief Summary

Hamilton requires a utility deposit before it opens water and sewer service, and it can ask for an additional deposit from customers with repeat late payments. A surety bond in place of that cash keeps working capital in the business while still giving the city the payment guarantee it wants.

The City of Hamilton runs its own water and sewer system and collects required utility deposits under Section 42-1 of the city code, with the amounts set in the city fee schedule. A Water and Sewer Utility Deposit Bond names the City of Hamilton as obligee and guarantees that the customer will pay its water and sewer bills. Confirm with the city that a bond is accepted for your account and get the current amount before the bond is issued.

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How to Apply for a Water & Sewer Utility Deposit Bond:

• Ask the City of Hamilton Water and Sewer Department for the deposit amount on your account.
• Confirm the city will accept a surety bond in place of a cash deposit and whether it has its own form.
• Give the surety the account holder's legal name and the service address.
• Pay the premium and have the bond executed.
• Deliver the bond to the city before service is connected.
• Keep the account current to avoid disconnection or a request for an additional deposit.

Detailed Information About the Alabama Water & Sewer Utility Deposit Bond:

Who posts this bond

The principal is the water and sewer customer, most often a business, developer or property owner opening service with the City of Hamilton. Section 42-1 of the Hamilton Code of Ordinances, adopted in Ordinance No. 2004-3, provides that the city has a schedule of water and sewer connection and tap fees and required utility deposits, all set out in the city fee schedule. Because the amount comes from that schedule rather than the code, the city sets the figure for your account.

What the bond guarantees

The City of Hamilton is the obligee. The bond stands in for a cash deposit and guarantees payment of the customer's water and sewer charges. If the account goes unpaid, the city can claim against the bond, and the surety will look to the customer for repayment.

Why late payments matter

Section 42-2 makes bills due when rendered. If a delinquent bill is not paid within five days after it becomes delinquent, service is discontinued and is not reconnected until all delinquent amounts and a reconnection fee from the city fee schedule are paid. Repeat delinquencies can lead the city to impose an additional utility deposit or refuse service, which is one reason commercial customers choose to post a bond and keep the account current.

Before you buy

Contact the City of Hamilton Water and Sewer Department to confirm that a surety bond will be accepted in place of a cash deposit for your account, the amount required and any bond form the city uses.

Eligibility and Requirements for a Alabama Water & Sewer Utility Deposit Bond:

• City of Hamilton named as obligee.
• Bond amount matching the utility deposit set in the city fee schedule.
• Payment of connection and tap fees from the city fee schedule.
• Bills paid before they become delinquent under Section 42-2.
• Reconnection fee and all past due amounts paid before service is restored after a shutoff.

Alabama Water & Sewer Utility Deposit Bond FAQs:

Official and Additional Resources for the Alabama Water & Sewer Utility Deposit Bond: