Dallas residents are receiving letters in the mail marked with the official city logo on the envelope, and signed, "Sincerely, The City of Dallas."
The letters are actually advertisements from Service Line Warranties of America (SLWA), which paid the city $450,000 as a "brand license fee," according to a city memo, in exchange for the city's endorsement of its service and the right to send direct mail to Dallas residents using the city's logo.
SLWA is offering Dallas residents a utility service line warranty program — insurance that would cover damage to the line that connects your house to the city's water and sewer lines under the street — that would cover damage up to $4,000 with no deductible for the price of $6.50 a month, or $73 a year.
"After I found out it wasn't [from the city] it seems kind of demeaning,"said retired Dallas Public Works supervisor Perry Pearson, who contacted NBC 5 after he received the letter in late May. "I mean you're selling the city out. The city's up for sale."
In addition to the $450,000 payment, SLWA has agreed to pay the city tens of thousands more depending upon how many people sign up for the warranties.
In April 2014, a memo from Dallas Chief Financial Officer Jeanne Chipperfield to members of city council's Budget, Finance and Audit Committee predicted that there would be negative feedback if the city agreed to license its logo to water and sewer warranty program.
Under the header "Cons," a power point presentation lists:
"Negative public perception for allowing use of city name/logo by selected private enterprise."
"Risk of damaging city's reputation and possible negative media coverage if there are problems with selected warranty provider."
"I don't think the city should operate this way," Pearson said.
A representative of SLWA told NBC 5 the company partners with cities, in part, because it does not want to confuse people about the integrity of its program.
"The endorsement by the city establishes credibility and demonstrates support for the program. Our program is only available to residents through a partnership with the city," said Brad Carmichael, vice president of business development for Utility Service Partners, Inc., the parent company of SLWA.