Water-line insurance endorsement raises questions in North Las Vegas

David Dyreng isn’t alone in wondering why the city of North Las Vegas wants to sell him waterline insurance.

Over the past few weeks, he and thousands of other city residents have opened a letter warning against the financial perils of repairing underground waterlines damaged by “root invasion, ground shifting, fluctuating temperatures and age.”

The May 6 letter offers a ready-made solution: Service Line Warranties of America, a Pennsylvania-based for-profit corporation hawking waterline warranties that have “helped more than 60,000 homeowners across the country save over $45 million in service line repair costs,” all for around $6 a month.

All of which would be fine by Dyreng, if the pitch weren’t printed on city letterhead, carrying a signature from the city manager.

“It is not the role of government to be sanctioning one private business over another,” Dyreng said. “The fact that you get the letter from the city almost makes it look like it’s a mandatory thing.

“It puts you in a situation that looks like Obamacare, where government is competing with private industry.”

Deputy Utilities Director Randy DeVaul has fielded a handful of similar complaints in the eight months since the city signed on to a partnership with a private water and sewer line insurance provider.

DeVaul, an enthusiastic supporter of the move, said the city’s October agreement with warranty underwriters at SLWA is a near carbon-copy of a sewer line deal inked between the company and the city of Las Vegas in 2013.

The company is endorsed by the National League of Cities and accredited by the Better Business Bureau.

A disclaimer issued on the company’s website says its services are offered “at no cost to the cities” and no expense to the public.

The sewer line endorsement deal with North Las Vegas has netted the city some $30,000 to date, thanks to a 10 percent revenue sharing agreement that will apply to waterline insurance policies sold through a public-private sales drive launched in early May.

DeVaul wasn’t sure how many city homeowners have signed on to the fledgling waterline insurance program, but said there was no limit on how much the city could profit from such efforts in the future.

“There’s no sunset on this program, so there’s no cap on how much we could make from this going forward,” he said. “The most important thing for people to understand is that it’s not a scam; the company was vetted through the National League of Cities.

“This is a real program, an optimal program, offered with the city’s help.”

DeVaul said no city funds were used to print or distribute program endorsements.

Interim City Manager Jeff Buchanan, who is quoted in the waterline insurance letters offering his support for “the only (warranty) program endorsed by the North Las Vegas City Council,” declined through a spokesman to comment.

Contact James DeHaven at jdehaven@reviewjournal.com or 702-477-3839. Find him on Twitter: @JamesDeHaven.