HomeMy WebLinkAbout1993-07-13; Municipal Water District; 215; Water Billing Equipment UpgradeAB# cats TITLE:
MTG. 7/b/93 Authorization To Proceed with Request For
Proposal for Water Billing Equipment Upgrad 61TY ATTY DEPT. m And Appropriation of Funds CITY MGR. @w
RECOMMENDED ACTION:
Authorize staff to proceed with Request for Proposal for water billing equipment upgrades and
appropriate $100,000 from the Water Operating Fund for their purchase.
ITEM EXPLANATION
District staff has researched, along with staff from the purchasing, finance and information
systems departments, various pieces of equipment that will enhance the operation of the water
billing system and provide an increased level of customer service.
The proposed equipment to be purchased is as follows:
Printer - High quality, laser printer capable of printing a large volume of documents at a
high rate of speed. This printer will have bar code and optical character printing ability
for payment processing automation.
Folder/Inserter - Designed to take laser-printed bills, fold them, insert them into mailing
envelope along with one informational insert and a return envelope.
Remittance Processing System - Device for automation of water payments. This will
allow one operator to process the day’s mail within a few hours. The information is
stored on disk and uploaded to the HP 3000, which updates customer accounts.
A staff report is attached which details each of the above pieces of equipment.
FISCAL IMPACT
Based on preliminary calculations, the above equipment purchases will cost around $80,000.
Funds in the amount of $100,000 were allocated by the Board for water billing upgrades and
have been reserved in the operating fund. This money was accumulated as a result of the
inclining block rate the District had instituted during the latter part of 1990.
With the projected annual cost savings of $24,000, the payback period of the equipment will be
approximately three and one-half years. The available balance of the operating fund at the
end of the 1992-93 fiscal year, including the reserve for the upgrades, is estimated to be
$2,840,000. Upon appropriation of the $100,000 originally allocated for the purchase of water
billing equipment upgrades, the Water Operating Fund will contain $2,740,000.
EXHIBITS
1. Staff Report: Water Billing System Improvements
EXHIBIT 1
WATER BILLING SYSTEM IMPROVEMENTS STAFF REPORT
The goal of the District water billing division is to streamline the billing operation, while improving
the level of customer service. In order to accomplish this goal, several objectives must be met,
which include a redesign of the water bill, automation of the payment processing system and
improvements to the water billing computer software. The first step in reaching these objectives
involves authorization to proceed with a Request For Proposal for the purchase of billing
equipment. District staff has researched various pieces of equipment to automate many tasks
and incorporate a clearer, more informative water bill. This will save staff time which will increase
the level of customer service, reduce costs and provide the public with a more user-friendly bill.
The computer upgrades will be investigated at another time.
Water Bill Redeslgn
The current billing system utilizes two line printers in Information Systems that were purchased
in 1987. The water bills format is a self-mailer that contains carbon paper to transfer information
to the billing statement inside. The mailers are attached in a continuous form arrangement to
feed into the printers, and they must be burst (separated) before mailing. The burster used is
approximately 10 years old.
In order to improve customer service, the District intends to redesign the water bill to provide
more information in an easy-to-read format. A full-page, laser-printed bill (similar to the sample
Exhibit 1) would offer a large degree of flexibility with regard to print size, possible changes on
the bill and a message area.
Another goal of the billing department is to automate the cash receipts portion of billing. To do
this, a type of bar code or an optical character must appear on the bill stub for a machine to scan.
This would allow the information on the bill stub to be read by a machine and then stored on a
computer disc to be uploaded to the city’s mainframe computer. This data must now be input
manually. The current bill format, which has a carbon imprint, does not provide a clean image
and cannot be read by a scanner. A laser printer is able to print bar codes and optical characters
that are of a high quality and are scannable.
Proposed Equipment Purchases
As all departments prepare for the State’s budget decisions, the’ District is looking for ways to
keep costs down while providing a higher level of customer service and increasing efficiency. The
initial investment of these capital items will greatly reduce the amount of staff time needed to
process payments, thus decreasing the future possibility of hiring additional billing personnel. The
water bills will also be of a much higher quality and easier to read.
Laser Printer
One high speed printer rated to print large volumes of documents is needed. The
printer will have the capability of printing a character that can be scanned for
automated bill processing. This printer can also be used by other departments
within the City for forms printing, payroll, accounts payable, etc.
1
Folder/Stufkw
In order to provide a full-page, laser-printed bill, a machine must be purchased that
can fold and stuff these bills into a mailing envelope. Also, a return envelope must
be provided. The District is looking at a machine that will fold 8 l/2 X 11” sheets
of paper and stuff them, with two inserts, into an envelope and then seal the
envelope for mailing. With the ability to insert two documents, the District can
provide the return envelope and a bill insert, such as a newsletter or other
informational pieces. This folder/stuffer can also be used by other departments,
such as Finance, for payroll and accounts payable checks.
Remittance Processing System
This table-top piece of equipment includes a scanner that can read optical
characters on the water bill stub, a sorter that routes bills and stubs into separate
compartments, and a computer interface that allows the stored data to be
uploaded to the city’s HP mainframe computer. Automation of the incoming bills
will greatly decrease the amount of staff time needed to process payments.
Additionally, the District may be able to make deposits a day earlier with the faster
processing. Initial analysis shows that the current procedure of opening bills,
removing the contents, separating the check from the stub, comparing what is paid
to what is owed and running three adding machine tape totals for each batch takes
four employees working six hours a day during the peak payment receiving days.
With a remittance processing system, one staff person operates the machine,
which can scan the stub, endorse the check, print the account number on the back
of the check, and prepare batch balances. This can all be done in approximately
two hours. The information from this machine is stored on a computer disk, which
can then be uploaded to the mainframe and instantly update customer accounts.
Presently, one staff member must dedicate about two hours every morning to
manually input payments, which increases the chance of potential errors. Exhibits
3 through 5 display the current and proposed water payment procedures, as well
as a preliminary analysis of potential cost and time savings.
This initial report is the result of much research, including demonstrations by both vendors and
users, and talking to other water agencies about what has worked for them.
The District’s goal is to bring an agenda bill before the Board within the next few months
requesting authorization to bid the equipment, with a target date of October 1993 for
implementation.
Fundlng Source
Funding for the proposed equipment purchases will come from excess revenue generated by the
District’s previous inclining block water rate. During the months of August through November of
1991, the District accumulated $1.2 million from penalties paid by customers not meeting
conservation targets. In December 1991, the Board voted to allocate the $1.2 million in the
following way:
1) Refund single-family residential customers who paid penalties but still met the
targeted conservation effort. $140,000
2
2) Credit all customers up to five free units of water for one billing period. $97,700
3) Set aside money for water billing system upgrades to improve customer service.
$100,000
4) Create a rate stabilization fund to be used to offset future rate increases, if
possible. $431 ,150
5) Create a reserve fund for emergencies (payment of penalties for exceeding
conservation target). $431 ,150
FISCAL IMPACT:
Based on preliminary calculations, the above equipment purchases will cost around $80,000.
Funds in the amount of $100,000 were allocated by the Board for water billing upgrades and have
been reserved in the operating fund. With the projected annual cost savings of $24,000, the
payback period of the equipment will be approximately three and a half years. The available
balance of the operating fund at the end of the 1992-93 fiscal year, including the reserve for
billing upgrades, is estimated to be $2,840,000.
The potential exists to earn additional interest by depositing individual customer payments the
same day they are collected, as opposed to as long as three days later (taking into account
weekends and holidays). The amount of additional interest earnings cannot be determined at this
time.
EXHIBITS
1. Sample Water Bill
2. Water Bill Printing Flow Chart
3. Water Payment Processing - Current Procedure Flow Chart
4. Water Payment Processing - Proposed Procedure Flow Chart
5. Water Payment Processing - Monthly Cost Comparison
3
EXHIBIT 1
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+t AcCOlhIl WBER BILLIIJO D&l-E
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2bm SIERRA VISTA
CA WbW
(Opttcal Character line) OOO~~~~bOOOO~28235Oooooo~~~~
YOUR f+CCOUNT NUMBER SERVICE LOCATION SERVICE PERIOD No
FROH I TO MY!
LLi92bO. . : 2bS51 SIERRA VISTA 7/OL/=lL 8/OL/91 31
WTER METER 03b1110048 I I WATER USAGE CCCF - 748 GALLONS1
CURRENT REFSD WTER USAGE BIL&ED THIS PERIOD
PREVIOUS READ
BALANCE FORLIARD * l oo
YATER BASE CHARGE
0 - 20 CCF/ 30 DAYS
YATER IRPORT CHARGE
SEYER
* 3.05
* SL.20 .*’ L.DO
a 12.qq
TOTAL CURRENT CHARGE PERIOD AR0UNT a ‘. 27.71
TOTAL AllOUNT DUE * 27.79
Message Area
EXHIBIT 2
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EXHIBIT 3
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EXHIBIT 5
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