Utility Deposit Bond - City of Dayton, TN in Tennessee

Brief Summary

Dayton's code asks for a deposit or a suitable guarantee before water service starts, and the electric deposit is larger and grows with demand on commercial accounts. A utility deposit bond lets you offer that guarantee without leaving cash with the city, once the city confirms it will take a bond for your account.

The City of Dayton, Tennessee, which provides electric, water, sewer and sanitation service, is the obligee on this utility deposit bond. Dayton Municipal Code 18-106 requires a deposit or suitable guarantee before water service is supplied, set at $25 for residential owners, $50 for residential non-owners, $50 for commercial 3/4 inch to 2 inch meters and $100 for commercial 4 inch and up. The city lists the residential electric deposit at $300 and says commercial electric deposits increase as kW increases.

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How to Apply for a Utility Deposit Bond:

• Ask the Dayton Utility and Billing Department for the deposit amount on your account, especially the electric deposit for a commercial load.
• Confirm the city will accept a surety bond as the suitable guarantee and get any required form.
• Have the account name and service address exactly as they appear on the service application.
• Have the surety issue the bond to the City of Dayton for the quoted amount.
• Deliver the signed bond to the Billing Department at 400 Main Street before service is connected.

Detailed Information About the Tennessee Utility Deposit Bond:

The amount depends on the service and the account

Dayton Municipal Code 18-106 sets the water deposit schedule:

• Residential, owner: $25
• Residential, non-owner: $50
• Commercial, 3/4 inch to 2 inch: $50
• Commercial, 4 inch and up: $100

Electric is where the money is. The city's Utility and Billing Department lists a $300 residential electric deposit and says commercial deposit rates are variable and increase as the kW increases. For a commercial account the bond should match the deposit the city quotes for your load.

Deposit or guarantee

Section 18-106 says a deposit or suitable guarantee in the scheduled amount shall be required of any customer before water service is supplied. The city decides what counts as a suitable guarantee. Confirm with the Utility and Billing Department at 400 Main Street, Dayton, 423-775-8417, that it will accept a surety bond for your account, for which services, and on what form before the bond is issued.

What the bond guarantees

The customer is the principal and the City of Dayton is the obligee. The surety guarantees payment of the customer's utility bills up to the bond amount. If the account closes with an unpaid balance, the city can claim against the bond, and the customer repays the surety.

How long it stays in place

Under 18-106 the city may, at its option, return a deposit after one year, and on termination the deposit may be applied against unpaid bills. The city's billing page says deposits are applied as a credit to the account after one year if the account is in good standing. Ask whether a bond can be released on the same schedule.

What it costs

You pay a premium to the surety, not the deposit amount. For a commercial account the surety will look at the business's credit and payment history.

Eligibility and Requirements for a Tennessee Utility Deposit Bond:

• City of Dayton, Tennessee named as obligee.
• Bond amount equal to the deposit the city sets for the account.
• Water deposit schedule under Dayton Municipal Code 18-106: $25, $50, $50 or $100 by customer type and meter size.
• Residential electric deposit listed by the city at $300, commercial electric deposit rising with kW.
• Signed service application approved by the city before connection.

Tennessee Utility Deposit Bond FAQs:

Official and Additional Resources for the Tennessee Utility Deposit Bond: