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HomeMy WebLinkAbout2001 08 27 Informational B Utility Billing Computer Conversion COMMISSION AGENDA ITEM B CONSENT INFORMATIONAL X PUBLIC HEARING REGULAR August 27,2001 MGR~T ~ Meeting Allthori7.ation REQUEST: The Finance Department is requesting the City Commission review information regarding the status of the utility billing computer conversion. PURPOSE: To update the City Commission on the status of the utility billing computer converSIOn. CONSIDERATIONS: The status of the utility billing computer conversion was presented to the Commission at the August 2, 2001 meeting. An update of the status was relayed via an agenda item at the August 13,2001 meeting. The open items from the August 13,2001 meeting and their current status (as of August 17, 2001) are as follows: . Deposit return feature - Munis will roll out their quarterly update on September 9,2001 and will include this feature. . Credits showing up in the payment field - Munis will roll out their quarterly update on September 9, 2001 and will include this fix. . Utility tax description showing up on bill- Staff worked with GBF (our forms company) and was able to place the description on the bill. Bills going out this week will include the description. . Bill itemization - staff is still working diligently with GBF (our forms company) to pull this information from the system and have it show up in an itemized fashion on the bill. We have no estimate as to a complete date at this time; however, we do recognize this as a priority and will keep you updated. . Telephone capacity - We still have our two temporary employees assisting with telephone calls. We are now receiving our normal load of calls regarding bills. The temporary employees are assisting the department with other associated computer conversion clean-up items when they are not busy with calls. It is our intent to keep them on through the point that we go to the new and improved "itemized" bill in order to handle the anticipated influx of calls. . Credits for 40 day read cycle - Munis has provided staffwith an estimated cost of$6,000 for programming services related to issuing credits for the 40 day read cycle. Munis estimated that they would have the program ready 30 days after issuance of a purchase order. We anticipate the purchase order going out on Monday, August 20,2001 and accordingly, we estimate the issuance of credits beginning with bill cycles in or around September 20, 2001. RECOMMENDATION: N/A - for information only. ATTACHMENTS: . Memo from Rob Ori at Public Resources Management Group regarding the credit methodology on the 40-day meter read cycle. COMMISSION ACTION: m Public Resources Management Group, Inc. Ulilitl', Role, Financial and Management Consullants August 8, 200 I Ms. Louise C. Frangoul, CPA Director of Finance City of Winter Springs 1126 East S.R. 434 Winter Springs, FL 32708 Subject: Utility Billing Issues Dear Ms. Frangoul: As we discussed at our meeting on August 6, 200l, the City appeared to have a billing cycle for water and wastewater rate application that extended beyond the normal thirty- (30) day average usage period. This billing period encompassed approximately a forty-one-- (41) day period (applicable to all billing cycles for monthly billing) and it is my understanding that this excess use period resulted from the computer conversion activities associated with the implementation of the City's new utility billing program. Although delays in billing normally occur as a result of these utility billing computer conversion activities, our discussions indicated that the subsequent billing period was not a "short" cycle (say 20 days) but 'was a normal cycle with a shift in the timing of meter reads. As a result of this one time occurrence associated with the extended billing period, the City has determined that certain customers may have been overcharged for service as a result of applying the City's water conservation rates to a higher reported use during such billing period. As such, the City requested that Public Resources Management Group, Inc. (PRMG) provide our recommendations on how to refund any excess billing charges back to the affected customers. Since this extended use period was a one-time event which was not generally corrected by an abbreviated use period in the subsequent month, the issue deals with how to determine a billing credit or refund for those customers which may have paid excessive water use charges. Based on our understanding of the City's utility rate ordinance, the rates for service are applied on a monthly (generally 30 day reading cycle) basis. Since the billing cycle extended beyond this period, PRMG would recommend that the City i) adjust the usage blocks to be consistent with the extended billing period; ii) recalculate the bill for water and wastewater service using the larger usage block; iii) compare the adjusted utility bills to the amounts actually billed by the City; and iv) credit the customers utility bill for any refunds due back to such customer. This refund application method is easy to calculate, links to the actual usage period in question, and is consistent with the rate application requiren1ents of the City's rate ordinances. I060-03\WintcrSpgsOvcrbill 225 SOU T H S WOO P E 1\\1 F: N U E . S LJ IT E 2 I I . M ^ IT L ^ N I). FL 3275 I TELEPHONE (407) 620-2(,00. FAX (407) 628-5884 .......,. '.. Ms. Louise C. Frangoul, CPA City of Winter Springs August 8, 200 1 Page 2 With respect to the expansion of the billing or consumption blocks for which the bill is based, the City will need to determine the actual days beyond the normal billing period for each specific billing cycle. Also, since the City bills in ten (10) gallon increments on the bill, the adjustment to the billing blocks should also be in ten (10) gallon increments for consistency. Assuming a 41-day billing period and a normal billing period of 30 days, the adjusted water consumption blocks would be as follows: Existing Consumption Block Adjusted Consumption Block (*) o to 10,000 gallons 10,00 I to 15,000 gallons 15,00 I to 20,000 gallons 20,001 to 25,000 gallons 25,00 I to 30,000 gallons 30,00 I gallons and over o to 13,670 gallons [3,671 to 20,510 gallons 20,510 gallons to 27,340 gallons 27,341 gallons to 23,180 gallons 23, 181 to 41.010 gallons 41,0 II gallons and over (*) B[ock expansion factor based on following: 41 days/30 days = 36.7% increase in billing period. Under this approach, the rates applied would be consistent with the billing period consumption blocks; thus promoting consistency in rate application to the City's adopted rate ordinance. There are some other issues that I believe the City should consider as it evaluates the amount of usage credits to give back to the customer. 1. Sewer Use Charges - The excess billing period for the water system is also applicable to the wastewater system. Although the issue of overcharge is not as critical for this service, there exists an issue with the billing of wastewater flows. This issue only relates to the residential class where a maximum billing threshold exists. Since the billing period was extended, the ability of individually metered residential customers having water sales that are returned to the wastewater system is also increased. Therefore, PRMG would recommend that in the calculation of the excess water billing credit by the City, that consideration be given to the increased billings associated with the wastewater system. For the individually metered residential class where a maximum billing threshold of 10,000 gallons exists, the threshold should also be increased by the same block expansion factor as discussed above. This would promote fairness to all customers and to the utility and would be consistent with the City's current rate ordinance. The would not be an issue for the commercial or general service customers since all metered potable water (non-irrigation) is also charged the wastewater flow charge. 2. Customers with Additional Charges - Because of the PRMG recommendation of recognizing the wastewater flow in the credit calculation, there could be instances that a customer could be billed for additional service. This is especially evident for the City's flat rate residential sewer customers which rate includes a usage requirement for a 30-day period yet service has been received for a longer period. Because of the sensitivity of the issue and to promote customer goodwill, and recalculation of a bill that results in an 1060-03\ WintcrSpgsOvcrbill #-....~ - Ms. Louise C. Frangoul, CPA City of Winter Springs August 8, 2001 Page 3 additional charge to a customer should not be billed and that the utility system should absorb such additional charges. This recognizes that the excess billing period was a City issue not caused by the customer. PRMG anticipates that the amount of additional charges caiculated would not be material to the overall operations of the utility system. 3. Interest on Credits - Since the City has held the customers money as a result of over billing, one could argue that an interest component should be reflected in the credit calculation. Because of the time frame involved relative to this issue and that it is planned to be resolved quickly, PRMG would recommend that the calculation not include the provisions for interest. This would simplify the overall calculation of the credit and the City would not have to determine for each customer the net days incurred of "holding the funds". Also at today's level of interest rates, the amount to each customer would be immaterial. We hope that the above recommendations are helpful to the City and you as it relates to addressing the issue regarding the potential over billing of customers due to the extension of the billing cycle. We appreciate the opportunity to assist the City with this issue and if you have any further questions or would like PRMG to review any calculations or final policies relative to this issue, please do not hesitate to give us a call. Very truly yours, Public Resources Management Group, Inc. /241 CL Robert 1. Ori President cc. Kipton D. Lockcuff, P.E., City of Winter Springs Jack Burgiel, PRMG 1060-03\ WinterSpgsOverbill