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• -iIN HILLS MEMORANDUM DATE: October 10, 2008 TO: Financial Planning and Analysis Committee FROM: Sue Iverson, Finance Director *\3j SUBJECT: Red Flags Rule—Identity Theft Prevention Program BACKGROUND: The Red Flags Rule of the Fair and Accurate Credit Transactions Act of 2003 (FACTA)requires all utilities to have an Identity Theft Prevention Program developed and in place by November 1, 2008. • Originally this act was intended for financial organizations and private sector businesses. Municipal utilities are subject to this as a direct result of one of the sources that someone can establish identity and residence. For example, if you do not have a valid photo ID and wish to register to vote—you can use a current utility bill with a due date within 30 days of the election as proof of residency. DISCUSSION: The Minnesota Municipal Utilities Association (MMUA) and the League of Minnesota Cities (LMC)have been working together to help municipal utilities establish this program. I attended a training seminar at the LMC on Wednesday, October 8, 2008. The MMUA has been working with other state organizations in collaboration to develop templates and guidelines for implementation. They have made their materials available free of charge. These materials have been developed by attorneys and the LMC has sought out Opinions from the Minnesota Department of Administration on Data Practices issues. While the original act was intended for private sector boards and committees, it is not required for public sector councils to adopt the program; a senior level manager of the organization may approve the program. The LMC has sought an Opinion from the Minnesota Department of Administration and this document does not have to be made public as it is a matter of security. •