HomeMy WebLinkAbout2002-03-12; Municipal Water District; 521; Cycle Billing Implementation PlanCARLSBAD MUNICIPAL WATER DISTRICT -AGENDA BlLC
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ITG. 03-12-02 CYCLE BILLING IMPLEMENTATION PLAN CITY ATTY. e
1EPT. FlNlPW CITY MGR.
RECOMMENDED ACTION:
Introduce Ordinance No. 42 , amending Sections 5 and 7 of the Carlsbad
Municipal Water District Ordinance No. 26 and adopt Resolution No. 1143
establishing a late fee policy to accommodate cycle billing.
ITEM EXPLANATION:
In 2001, a team of City employees conducted a Business Process Review (BPR)
of the utility billing process, documenting staff efforts from water meter installation
to meter reading to customer billing and payment collection. The team was
specifically looking for processes that could be redesigned to provide efficiencies.
The major process identified for improvement was the meter reading and customer
billing process. Currently, meters are read and the readings are transferred to the
billing system during the first three weeks of the month; customer bills are then
generated and mailed the last week of the month. Approximately 25,000 bills are
processed in this manner monthly. Every bill has the same due date, penalty date,
door hanger, and shutoff dates. The result is significant peaks in workload for
utility billing staff during specific periods of the month.
In order to spread the workload out evenly throughout the month, staff is proposing
to implement cycle billing. This would involve dividing the customer base into four
groups based on their account numbers (which reflects their physical location in
the City). Customer accounts in the first group would be read and billed during the
first full week of the month; customer accounts in the second group would be read
and billed during the second full week; and so on. Each account that is read
during the week would be billed within three business days of reading and
verification, with the due date on the 14Ih day following mailing. This will result in a
variety of due dates throughout the month, rather than the current practice of the
same due date for all customers.
A recent survey of cities and water agencies throughout the state found that most
agencies of our size are using cycle billing.
The benefits of cycle billing include:
Customers will receive their bill significantly closer to the date their meter
Time between actual water usage and revenue receipt will be shorter,
was read
resulting in revenue enhancements
Page 2 of Agenda Bill No. 521
Workload of customer billing, payment processing and service termination
will be spread out over the month (rather than concentrating the workload
around the same dates each month), balancing the level of customer
service throughout the month, and
Impacts of holidays, vacations and staff shortages will be lessened
The most obvious effect on the customer will be the different due date.
Traditionally the due date has been the 15Ih of the month. Under cycle billing,
customers will be billed within three (3) business days after their meter is read and
verified, and their bill will be due on the 14'h day following mailing. For customers,
meter reading and billing will always occur within the same week each month,
which means that the customer's due date will always occur within the same week
each month.
To implement cycle billing, staff has prepared a plan that includes:
Preparing a meter reading and billing calendar for each customer cycle for
Notifying the customer via water bill insert for the two months prior to
Setting up and testing the utility billing system
Training staff, and
Having sufficient staff available to handle increased customer calls during
the next year
switching to cycle billing
the implementation period
Implementation is planned for June of this year. In order to implement cycle
billing, staff is requesting the revision of Ordinance No. 26 (Exhibit 3) to
accommodate the change in billing dates and to allow establishment of the late fee
penalty by Resolution.
The adoption of the Ordinance and Resolution does not change the current late
fee policy, but allows them to be set by Resolution rather than Ordinance, which is
consistent with most other District and City fees.
FISCAL IMPACT:
Staff does not anticipate any significant costs due to cycle billing. Cash flow to the
District is expected to improve due to the decrease in time between actual water
usage and customer billing.
EXHIBITS:
1. Ordinance No. 42 of the Board of Directors of the
Carlsbad Municipal Water District amending Division 1, Sections 5 and 7 of
District Ordinance No. 26.
Page 3 of Agenda Bill No.2
2. Resolution No. 1143 of the Board of Directors of the
Carlsbad Municipal Water District establishing the late fee policy for the
payment of utility bills.
3. Ordinance No. 26, Division 1, Sections 5 and 7, redlined to show changes and
brackets ([ 1) to show additional text.
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ORDINANCE NO. 42
AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE
CARLSBAD MUNICIPAL WATER DISTRICT AMENDING DIVISION 1, SECTIONS 5 AND 7 OF DISTRICT ORDINANCE NO. 26.
WHEREAS, the Carisbad Municipal Water District, hereinafter called "District", is
organized under the Municipal Water District Law of 191 1; and,
WHEREAS, said Municipal Water District Law provides methods by which District shall
establish types and conditions of service and fix rates and charges.
NOW, THEREFORE BE IT RESOLVED that the Board of Directors of the Carlsbad
Municipal Water District does ordain as follows:
That Division 1, Section 5 and Section 7 of Ordinance No. 26 of the Carlsbad Municipal
Water District shall be amended to read as follows:
SECTION 5. -METER READINGS AND BILLINGS:
Meters shall be read and billings rendered on a regular basis. The date on which the bill
is deemed delinquent shall be indicated on the bill.
SECTION 7. - PENALTY:
If any bill remains unpaid beyond the delinquent date indicated on the bill, then there
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shall be added a penalty to the account. This penalty shall be set from time to time by
Resolution.
INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council on
the 12th day of MARCH ,2002, and thereafter.
PASSED, APPROVED AND ADOPTED at the regular meeting of the Carlsbad Municipal
Water District held on the day of , 2002, by the following vote,
to wit:
AYES:
NOES:
ABSENT
ATTEST:
LORRAINE M. WOOD, Secretary
' Page 2 of 2 of Ordinance No. 42 (CMWD)
CLAUDE A. LEWIS, President
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RESOLUTION NO. 1143
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE CARLSBAD MUNICIPAL WATER DISTRICT
ESTABLISHING THE LATE FEE POLICY
FOR THE PAYMENT OF UTILITY BILLS
WHEREAS, the current method of calculating and charging late fees must be
revised to accommodate billing procedures and limitation of the computer billing
system; and
WHEREAS, late fees are currently assessed on the portion of the utility bill that
11 has not been paid by the delinquent date, and not on previously assessed late fees;
and
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District
deems it more appropriate to charge late fees on the total balance due on a utility bill,
which may include prior late fees.
NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Carlsbad
Municipal Water District, as follows:
1. That the above recitations are' true and correct.
2. A 10% late fee will be charged to utility accounts that have not been paid by
the delinquent date indicated on the utility bill.
3. 'Such penalty shall not be less than $1.00 and not more than $50.00.
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4. The rates and charges'established by this resolution shall, on their effective
day, supersede rates previously established.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad
City Council held on the 12th day of MARCH , 2002 by the following vote,
to wit:
AYES: Board Members Lewis, Kulchin, Finnila, Hall
NOES: None
ABSENT: Board Member Nygaard
CLAUDE A. LEWIS, Mayor
ATTEST:;
.\
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LORRAINE M. WOOD, City Clerk
ORDINANCE NO. 26
AN ORDINANCE OF THE CARLSBAD MUNICIPAL WATER DISTRICT TO
ESTABLISH AND TO DEFINE PRICES AND CONDITIONS OF WATER
DELIVERY; TO PROVIDE METHOD OF ESTABLISHING AND FIXING RATES
AND CHARGES FOR WATER DELIVERED; TO PROVIDE METHOD FOR
EXTENSION OF DISTRICT'S FACILITIES; AND TO REPEAL ORDINANCES 10,
12, 14, 16,21 AND 22.
ARTICLE 111
RETAIL WATER RATES AND COLLECTION THEREOF
DIVISION 1. - IN GENERAL
SECTION 5. - METER READINGS AND BILLINGS:
Meters shall be read and billings rendered
.. [on a regular basis. The date on which the
bill is deemed delinquent shall be indicated on the bill].
SECTION 7. - PENALTY:
If any bill remains unpaid ..
M, [beyond the delinquent date indicated on the bill], then there shall be added
a penalty 4
.. [to the
account. This penalty shall be set from time to time by resolution].