Plano hopes revised ad is less confusing for taxpayers




Posted on September 19, 2012 at 10:13 PM

Updated Thursday, Sep 20 at 1:06 AM

PLANO — Twice a year, Plano residents can expect to receive letters in the mail from Service Line Warranties of America.

The fall mailings look different than the ones that arrived in the spring, when a letter with only the city of Plano's logo and a signature of Plano's city manager offered residents a chance to opt-in to a program sold by Service Line Warranties of America.

"We take our citizens' opinions very seriously," said Plano's Director of Policy and Governmental Relations Mark Israelson. "We want to make sure we're communicating in a way that's clear and transparent. And that's what we tried to do with the adjustments in this letter."

Service Line Warranties of America — which has an A+ rating from the Better Business Bureau — offers something similar to an insurance policy on a water or sewer line on private property. But the original letter advertising the program did not state that the city of Plano had granted Service Line Warranties of America the right to use its logo and city manager's signature in exchange for a "brand license fee" of about $60,000.

City Council members approved the use of the logo in January.

After a WFAA story in May, the city and Service Line Warranties of America re-designed the fall letter to homeowners.

"The big change we made with this letter [is], we made sure we had both logos on the letter to make sure we represent the partnership," Israelson said."

The letter also explains that the city receives a cut of 12 percent of all subscription revenues. In addition, Israelson said, the letter:

states this is a voluntary program

gives residents a way to opt out from all future mailings

explains the city does not endorse the company's performance

About 10 percent of Plano residents, or 7,150 people, have signed up for Service Line Warranties of America's program since the initial mailing. The city has made $42,000 so far off the subscriptions, and will receive three installments from Service Line Warranties of America to cover the $60,000 licensing fee.

So far, 107 claims have been filed and 34 residents have asked to not receive any more mailings.

Resident Connie Schulte bought a subscription within days of receiving the first letter. But when she learned more about the program, she canceled and got her money back.

"I guess my problem is the money Plano is making off the citizens of Plano," she said. "If you get that letter in the mail with the city of Plano's logo, you're going to assume — whether they say it or not — that they are endorsing this company."

Schulte has received letters from competing companies offering warranty plans just like Service Line Warranties of America. She said she wonders why the city of Plano only gave one company the right to use its logo.

Service Line Warranties of America has similar programs in about a dozen North Texas cities. Carrollton recently opted out. Lewisville is considering opting in.