HomeMy WebLinkAbout10B Utility Billing Services Contract4646 Dakota Street SE
Prior Lake, MN 5 53 72
CITY COUNCIL AGENDA REPORT
MEETING DATE:
July 23, 2012
AGENDA #:
1013
PREPARED BY:
NICK BISHOP, ACCOUNTANT
PRESENTER:
JERILYN ERICKSON
AGENDA ITEM:
CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE
EXECUTION OF THE CITY'S STANDARD CONTRACT FOR THE
ENHANCEMENT OF ELECTRONIC UTILITY BILLING SERVICES
DISCUSSION:
Introduction
The purpose of this agenda item is to review the quotes received for the
enhancement of electronic utility billing services and award a contract to
implement these services.
History
The current technology used by the City to print utility bills limits the amount
of information that can be provided to utility customers. An outside vendor
would give the ability to:
• create detailed utility bills that could include payment history and
consumption history in detailed graphs,
• provide electronic delivery and presentment
• include other inserts with all printed utility bills,
• have access to online payment options (check or credit cards), and
• provide business continuity and disaster recovery security.
During May and June of 2012 the City solicited for quotes for printing,
electronic delivery and presentation, electronic payment, and mailing of its
utility bills.
Current Circumstances
The City intends to implement these services in three separate phases,
shown below:
Phase 1
Bi-monthly bill printing and mailing by vendor
Dec. 1 2012
Phase 2
Electronic delivery and presentation of bills
Jun. 1, 2013
Phase 3
Electronic payment solutions, including
check/credit cards
Jun. 1, 2013
The City has received numerous requests from residents for electronic utility
billing services including online bill presentation, e-mail notification,
electronic payment options and online payment history. The City currently
offers none of these services.
The City does offer an ACH (bank draft) payment option and accepts
payments through third party remittance services (generally the customer's
bank). At this time approximately 1,900 take advantage of the ACH
payment options and 1,700 use third party remittances. These two payment
options would remain available to all utility customers and they would have
the added flexibility of receiving a mailed or electronic statement.
The City received five quotes from various vendors to perform this work.
After the quotes were reviewed the City determined that two vendors could
best meet all of the requirements outlined by the City and provides the most
benefits to its utility customers. The cost analysis shown below is based on
the quotes received and a projected adoption rate of 10% for e- statements
in the year of implementation and a 5% increase in the second and third
year. In this analysis all credit card fees would be paid by the customer.
CURRENT COSTS $19,290 $19,710 $20,130 $59,130
ESTIMATED
CASH CYCLE $23,005 $22,838 $22,626 $68,469
SOLUTIONS, INC.
APEX PRINT $31,037 $28,599 $31,110 $90,746
TECHNOLOGIES,
LLC
Apex Print Technologies, LLC could provide services for $90,746 over a
three -year period. They currently provide similar services to ten utility
customers, with seven located in Minnesota. They have two fully redundant
print and mail facilities located in St. Paul, MN and Green Bay, WI. Their
headquarters are in St. Paul.
E
The low quote was from Cash Cycle Solutions, Inc. at $68,469 for a three -
year period. They currently provide similar services to approximately 175
utility customers. Their headquarters and printing, facility are located in
Charlotte, NC. An additional printing facility is located in San Diego, CA.
The City's 2012 direct cost to print and mail utility bills will be approximately
$19,000 in 2012. The estimated cost over the next three years is $59,000.
This does not include electronic delivery and presentation or electronic
payment services.
ISSUES:
The City currently prints and mails utility bills in -house and offers no options
for online payments or electronic statements. Providing these types of
options has become common practice for many vendors including other
municipalities. Further, many of these services are requested by Prior Lake
utility customers on an ongoing basis.
FINANCIAL
The cost differential between the current in -house services and Cash Cycle
IMPACT:
Solutions, Inc. is approximately $3,100 (on average) higher each year. This
additional expense represents added value and a higher level of service for
utility customers. Customers would receive more information and easier to
read bills, they would also have access to online payment options. The
benefits to the City would include the possibility to include additional inserts
with each billing to better communicate with residents, increased disaster
recovery security, volume discounts on postage and the possibility of cost
savings based on a high adoption rate for e- statements (approximately
44 %). Any additional expense would be funded through the Water, Sewer
and Water Quality Funds.
ALTERNATIVES:
1. Approve Resolution 12 -XX accepting quotes and awarding a contract
with Cash Cycle Solutions, Inc. to implement the services listed above.
2. Deny this item for a specific reason and provide staff with direction.
3. Defer this item until a future date.
RECOMMENDED
Alternative #1.
MOTION:
E
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 12 -xxx
A RESOLUTION AUTHORIZING THE EXECUTION OF THE CITY'S STANDARD CONTRACT
FOR THE ENHANCEMENT OF ELECTRONIC UTILITY BILLING SERVICES
Motion By: Second By:
WHEREAS, The City solicited proposals from qualified firms for the enhancement of electronic utility
billing services including:
1. design of 8% by 11 utility bill
2. electronic presentation
3. electronic payment options
4. mailing of paper bills
and;
WHEREAS, Quotes were received, reviewed, and tabulated; and
WHEREAS, The following quotes best met the requirements of the city and were tabulated based on a
three -year period and certain assumptions about conversion to electronic presentment
and payments.
and;
WHEREAS, Cash Cycle Solutions, Inc. provided the lowest quote.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The Mayor and City Manager are hereby authorized to enter into the City's standard contract with Cash
Cycle Solutions, Inc. in the name of the City of Prior Lake for enhancements to electronic utility billing
services.
PASSED AND ADOPTED THIS 23rd DAY OF JULY 2012.
YES NO
M ser
M ser
Erickson
Erickson
Hedberg
Hedber
- Keeney
Keene
Soukup
Souku
Frank Boyles, City Manager