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HomeMy WebLinkAbout2002-03-12; Municipal Water District; 521; Cycle Billing Implementation PlanCARLSBAD MUNICIPAL WATER DISTRICT -AGENDA BlLC ,E# 521 DEPT. H . TITLE: Ea- 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. 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 Ill Ill 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 la 19 20 21 22 23 24 25 2e 27 2E 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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. Ill 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 la 19 20 21 22 23 24 25 26 27 28 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:; .\ /, i// LA;: ,, 7 1 ;?f 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].