About 400,000 Phoenix homeowners received a letter in the mail advertising a water and sewer line warranty over the past few days. However, some homeowners have wondered whether it is a legitimate letter.
"I got this letter on the 21st of September," said Jackie Smith, as she pointed to her copy.
Smith said at first, she was a little wary about the pitch.
"This letter is confusing too," she continued.
The letter stated that for $6 a month, or $67 a year, her home's outside pipes are covered by Service Line Warranties of America (SLWA). SLWA is based out of Pennsylvania, but the letter had the Phoenix city logo plastered all over it.
Smith called Phoenix's water department and quickly found out the letter is not part of a scam. Rather, it is part of a voluntary program. Smith said she is concerned others would not be as thorough.
"I have a 90-year-old elderly mother who lives next door and there is a lot of elderly people here in the city of Phoenix, and they don't have anybody to ask about this," she explained.
CBS 5 brought Smiths' concerns to Bill Gates, a city of Phoenix councilman.
"We've had quite a few people sign up for the program. It just makes sense," he said.
CBS 5 also learned the program makes a lot of money for the city. SLWA paid over $200,000 up front to partner with Phoenix, and an additional 12 percent of all the revenue goes back into the city's general fund, which funds things like the parks, police and fire departments.
"If we can avoid any more cuts in services, then the program will be worth it," explained Gates.
However, Gates did admit the city may make the message a little less confusing if it decides to partner with other private companies in the future.
"If we do these in the future (it's) a good idea to include some language to make it very clear (that) this isn't a required program. This is a voluntary program."
The SLWA's website mentions it does pay the cities it partners with to use their letterhead and logo. It states:
SLWA does offer the city itself compensation for allowing the use of the city seal on the letter. Why? Because the support of the city alerts residents of the legitimacy of the program resulting in more enrollments which in turn allows SLWA to offer a lower price because of the increased participation.
Copyright 2012 CBS 5(Meredith Corporation). All rights reserved.
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