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6. Customer Deposits • 6. CUSTOMER DEPOSITS This section of the report presents the customer deposit analysis conducted as part of the Study. 6.1 DESCRIPTION Because IRCDUS provides service prior to the receipt of payment, it carries the risk that of nonpayment for services received for incurred costs. As such, most utilities require customers to pay a deposit prior to the start of service or waive them based on demonstration of good payment history. IRCDUS currently requires a deposit from customers at the time of account opening, transfer, or reconnection, which is refundable to the customer after two years of good standing payment history or applied to the final bill balance if the account is closed prior to the two-year period for a residential account held by the property owner of after five years for a tenant account. 6.2 RESULTS To perform the customer deposit analysis, Stantec first evaluated IRCDUS' average water consumption and billed sewer volume for a typical residential customer. It is common within the industry for customer deposits to be based on between one to three months of an average or typical bill and consistent with a • utility's billing frequency and collection practices. IRCDUS bills monthly and continues to provide service until the property is disconnected for non-payment. As such, Stantec developed the customer deposits equal to the average charges incurred during a one-month billing cycle and another 30 days of potential charges prior to disconnection. • Stantec calculated updated deposits based on the proposed FY 2025 water and sewer rates and current average billed usage/volume for one ERU. Table summarizes the calculated deposits while Appendix A contains the calculation details. Table 20 — Proposed FY 2025 Customer Deposits Description Existing Proposed FY 2024 FY 2025 Water Deposit per ERU $50.00 $45.00 Sewer Deposit per ERU $50.00 $80.00 37