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HomeMy WebLinkAboutMonthly Municipal Services Billing Statements and Monthly Me Council/Agency Meeting Held: —Ob -O L Deferred/Continued to: L�A rov ❑ Conditionally Approved ❑ Denied - ti4ptl ignature I `Council Meeting Date: May 6, 2002 Department ID Number: FD 02-005 N CITY OF HUNTINGTON BEACH N -_7 REQUEST FOR COUNCIL ACTION .; cD SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS `"`,� �> > SUBMITTED BY: RAY SILVER, City Administrator 0W.-P / c� 0 I I� PREPARED BY: ROBERT F. BEARDSLEY, Director of Public Works E7 MICHAEL P. DOLDER, Fire Chief/Information Systems Director SHARI L. FREIDENRICH, Treasurer SUBJECT: APPROVE MONTHLY MUNICIPAL SERVICES BILLING STATEMENTS AND MONTHLY METER READING Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Should the City provide monthly Municipal Services Billing Statements based on monthly meter readings? Funding Source: An appropriation of $100,000 from the undesignated, unappropriated fund balance of the Water Fund to the Public Works Water Division's personnel and operating accounts is recommended to provide monthly billing statements based.on monthly meter readings. The Fiscal Impact Statement is attached (Attachment 1). Recommended Action: Motion to: 1. Direct staff to implement monthly Municipal Services Billing Statements based on monthly meter readings. 2. Appropriate a total of$100,000 from the undesignated, unappropriated fund balance of the Water Fund to the following Public Works Water Division accounts: $28,000 in Personnel Account 50685805.51110 for salaries and $10,000 in Personnel Account 50685805.55000 for benefits; $12,000 in Equipment Account 50685805.83700, for meter reading equipment and $50,000 in Equipment Account 50685805.85100 for vehicles. 3. Amend the Water Division Table of Organization increasing the number of meter readers by two. Alternative Action(s): 1. Implement a_bi-monthly Municipal Services Statement and continue bi-monthly meter reading. 2. Continue to produce a monthly Municipal Services Statement and continue bi-monthly meter reading. A . REQUEST FOR COUNCIL ACTION MEETING DATE: May 6, 2002 DEPARTMENT ID NUMBER: FD 02-005 Analysis: At the April 15, 2002 City Council Study Session, staff reviewed the need to change the City's current method of producing Municipal Services Billing Statements using bi-monthly meter readings. Staffs recommendation to convert to monthly meter reading and true monthly billing is based on a need to: 1) increase water conservation opportunities and information; 2) implement best business practices and improve customer services; and 3) improve efficiency in implementing the City's new Utiligy Municipal Billing Software. Currently, the City's monthly Municipal Services Billing Statements are based on bi-monthly meter readings. The first billing period occurs 60 days after the meter reading and is calculated by dividing the amount owed in half. The second billing period occurs 90 days after the meter reading and is the second half of the amount owed. When the first bill arrives, the customer owes for 60 days of Water, Sewer and Trash service but is only billed for half. This billing and meter reading process results in customer confusion over the bill and does not provide for timely water consumption information. The best business practices for customer information, conservation and for ease of implementing our new Utiligy billing software is to implement a monthly read once, bill once process. Staff recommends this because of the following advantages: • Better Management of Resources o Conservation efforts are managed more efficiently. o Unaccounted for water is tracked sooner with leaks and meter problems identified within 30 days. • Industry Practice is to bill for service as soon as it is provided. • Automatic collection rules can be applied to true monthly bills. • Quicker identification of collection problems. • Utiligy Municipal Billing Software will not require customization and future updates will be fully supported. There are two disadvantages to the monthly meter reading and billing process: 1) A one-time "True Up" of a customer's bill would be required to bring customers from 60 days in arrears to 30 days in arrears. To minimize the impact of this, staff is proposing to pro-rate the 30 day "True Up" amount over 12 months. Residential customers' costs would be approximately $5 per month for 12 months. Actual amounts will vary and are calculated based on one month costs divided by 12. 2) Monthly meter reading would require increasing meter-reading staff by two (Amended Table of Organization, Attachment 2) along with purchasing two vehicles and additional meter reading equipment. The total additional cost for this fiscal year is approximately $100,000. This represents $38,000 in salaries and benefits (assuming the remaining four months of the fiscal year) and $62,000 in vehicles and equipment. An additional $114,000 in salaries and benefits would be added to next fiscal year's budget to cover the on-going salary costs. The yearly costs equate to around 13 cents per customer per month. However, no rate change is needed to offset this cost. Municipal Services Billing Frequency RCA FD02005.doc -2- 4/29/2002 12:10 PM REQUEST FOR COUNCIL ACTION MEETING DATE: May 6, 2002 DEPARTMENT ID NUMBER: FD 02-005 There are two alternatives to staff s proposal: Alternative 1 Read meters and bill on a bi-monthly basis. r Under.this alternative, a.customer would receive one bill-every other month that would be twice as large as their current monthly bill. No staff increases would be required under this alternative. However, customers would not receive-timely water consumption data. Perhaps the biggest problem is that other monthly bill.items, such as sewer fees and trash fees, will be billed 60 days after services are provided even though City payments for the cost of providing the services would be made prior to collection. Alternative 2 Replicate the current practice, read bi-monthly and bill monthly. This alternative would require significant custom programming to our new Utiligy software, requiring an.additiorial.three to.four.months to.implement. Future Utiligy software releases would also have to be customized to City specifications and would delay each software update by several months and at additional cost. Environmental Status: Not applicable. Attachmep st• City Clerk's Page Numbe Description 1. Fiscal Impact Statement 2. Amended Table of Organization RCA Author: Dolder FD02005 Municipal Services Billing Fnequencv RCA FD02005.doc -3- 4/291200212:35 PM ATTACHMENT 1 � CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION To: Ray Silver, City Administrator From: Clay Martin, Director of Administrative Services Subject: FIS 2002-18 Frequency of Municipal Billing Statement and Meter Reading Date: April 28, 2002 As required by Resolution 4832, this Fiscal Impact Statement has been prepared for "Frequency of Municipal Billing Statement and - Meter Reading". If the City Council approves this request (total appropriation $100,000), the estimated working capital of the Water Fund at September 30, 2002 will be reduced to $2,230,000. r 95�y Martin Director of Administrative Services ATTACHMENT 2 _ x Water Operations Manager (Vacant) Distribution Administration Production [Water Distribution Supervisor Rick Olson Engineering Aide (Vacant) Water Production Supervisor Senior Administrative Howard Johnson Maintenance Meters Analyst Ken Dills Crewleader Crewleader Pumping/Supply Water Quality Bert Cardon Leadworker Leadworker Armando De La Torre Customer Service Warehouse Crewleader Water Quality lebee Leadworker David Boucher gill A Pete Hughes Mike Newton Jay Kleinheinz Coordinator Tom Sturgeon Accounting (Vacant) Lee Orton g Leadworker Equipment Technician II Administrative Warehousekeeper Mike F Operator Ana Thueson rY Cross Connection Equipment Secretary Debbie Harper Ga Eddin ton Control Specialist II Operator Dave Pineda Sheila Rogers Rudy Ocampo Customer Service (Vacant) Jesus Hurtado Rep/Field Water Systems Curtis Allen Office Assistant II Storekeeper Technician III Service Worker Ken Wenzel p Water Quality Gary Reinhardt Vicki Vickery Steve Tully Anthony Rizco Technician Service Worker Linda Rudd Steve Styles Jim Corbett Kurt Youngberg Jon Goldstein Meter Repair Worker Vince Madrid Dean Sunter Water Systems Steve Kowny Albert Zuniga Scott Adams Technician II Henry Canales Eric Borkenhagen Maintenance Darol Fitch Rod Houser Worker Maintenance Mike Hehn Frank Montes Worker Senior Meter Reader Larry Mahon Matt Printy Richard Legere Jerry Martinez Water Systems Kevin Scally Meter Reader Teachnician I Chris Cassotta Jeff Branch Jeff Harris 2 New Meter Bill Crisp (Vacant)- Reader Positions Vacant RCA ROUTING SHEET INITIATING DEPARTMENT: FIRE/PUBLIC WORKS/TREASURER SUBJECT: APPROVE-MONTHLY MUNICIPAL SERVICES BILLING STATEMENTS AND MONTLY METER-READING COUNCIL MEETING DATE: May 6, 2002 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or.other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) Si ned in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over$5,000) Attached Bonds If applicable) Not Applicable Staff Report If applicable) Not Applicable Commission, Board or Committee Report If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED::,. FORWARDED ? Administrative Staff L =: Assistant City Administrator Initial City Administrator Initial [City Clerk '�� "EXPLA ATI:ON=FOWRETURN-OF=ITEM (Below •. . Only) RCA Author: DOLDER • L00o.10 i j l C1 i Y CL E'RK Ci i Y OF HUNTING T ON BEACH. CA f•,f\ Municipal Services Statement Implementing "Better Business Practice" Consent Item E-16 ET Municipal Services Statement Improvement Opportunities ■ Increase water conservation opportunities and information ■ Improve customer relations and information ■ Improve business practices ■ Improve efficiency in implementation & maintenance of new Municipal Billing Software � WAMC� I ION M Current Municipal Services Billing Practices ■ Service Periods are based on bi-monthly Meter Reads. ■ At the time they are billed, Customers ,..❑ owe for 60 days of service for Water, LJ Trash and Sewer. ■ City pays "real time" to provide services but collects revenue for those services 60 days or more later. Current Municipal Services Billing Practices ■ The amounts owed for the 60-day Service Period are cut in half to generate a "monthly" bill. ■ The first half Period 1 is billed [� immediately; the second half (Period 2) is billed 30 days later ■ Result: Customers are confused by the current billing practice 2 E. T Best Business Practice for Customer Information, Conservation, and Software Implementation is to: Read Meters Monthly and Bill for All Municipal Services Monthly Advantages ■ Better Management of Resources and Conservation Opportunities ■ Industry Practice is to bill for service as service is provided ■ Simplifies Municipal Services Billing Software Implementation ■ Reduces Collection Problems 3 Impacts ■ "True Up" of Customers Bill Required ■ Bring customers from 60 Days.in Arrears to 30 Days in Arrears ■ 30 day"True Up"will be pro-rated and billed over 12 months (Less than $5/month for average residential customer) ■ Additional Staffing and Equipment required for Monthly Meter Reads Financial Impact of Monthly- Meter Reading ■ Impact of reading meters monthly is approximately 13 cents per meter per month. Because of accelerated cash flow, no rate change is required. 4 So What Does the Customer Get? ■ No Rate Change ■A Monthly Bill that Reflects Actual Consumption and Actual Services Provided ■ Better Conservation Information ■A 30 Day "True Up" Cost Prorated and Billed Over A 12 Month Period So When Does this Happen? ■ We expect to implement the new Municipal Services billing software this June and July. 5