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HomeMy WebLinkAbout2007 02 26 Regular 302 Utility Services Collection Process COMMISSION AGENDA ITEM 302 I REGULAR February 26, 2007 Meeting MGR / DEPT Authorization REQUEST: The Finance Department is requesting that the City Commission approve improvements to the Utility Services Collection Process. PURPOSE: The purpose of this Agenda item is to request that the City Commission approve improvements to the Utility Services Collection Process. CONSIDERATIONS: The City Commission has received complaints regarding the Utility Billing Collection Process. As a result, on February 12, 2007 the Commission requested that suggestions be brought back to them on how to improve customer service. The following information is offered as background information only: Approximately twenty percent of our approximately 12,750 customers (2,550) pay their bills late each month and approximately seventy-five (75) customers have their utility services interrupted each week as a result of not paying their utility bills at all. Procedures for bill collections can be found in the City's Code of Ordinances Section 19-97 entitled "Billing, payment, delinquency" and the City's Water and Sewer Bond (Series 2000, 2001 and 2002) Covenants - sections entitled "No Free Service" and "Enforcement of Collections." In summary, each month the customer is sent a bill from the City of Winter Springs. If the bill has not been paid in twenty-one (21) days, on day twenty- two (22) a five dollar ($5.00) late fee (or 5% of the outstanding bill, whichever is greater) is assessed and a delinquent notice is mailed to the customer stating that their utility service will be disconnected in 10 days if payment is not received. The delinquent notice specifies a date and time by which the payment is due (i.e. 2/26/07 5PM). If the customer's service is disconnected, service cannot be re-established until the delinquent balance (including late fee), a $30.00 reconnection fee and a $100 deposit (if there is not a deposit already on file) is paid. The City Manager and staff have had telephone conversations with Orlando Utilities Company (OUC) regarding our customer service procedures and OUC believes that an automated customer notification service called Televox would be very beneficial to our organization. As a result of using Televox, OUC has seen their number of disconnections decrease from 9% of customer base to 4% of customer base (in excess Regular Agenda Item 302 February 26, 2007 Page 2 of 3 of a 50% decrease) while collection of bad debt increased. OUC uses this service in place of mailing delinquent notices to their customers. The City Manager and staff recommend using Televox as an addition or enhancement to our notification process. Staff recommends that 6 to 7 days after the delinquent notice is mailed, a telephone notification message be placed to the customer by Televox reminding the customer that they have 3 business days to make their payment or their services will be disconnected. This will add yet another layer of notification to help ensure the customer's utility services are not interrupted. We are hopeful that the Televox automated system will also take care of the rare occasion when a customer has lived in the City for a long period of time and has never had their services disconnected, such as Lucille Carr. Next, as recommended by George Colombo in his Customer Care Report (see attached), he suggests that staff be empowered to make certain decisions regarding a customer's account. With this in mind, the City Manager and staff recommend waiving the five dollar ($5.00) late fee once over the lifetime of an account and waiving the thirty dollar ($30.00) service reinstatement fee and one hundred dollar ($100.00) deposit requirement if the customer has never been previously disconnected and has had no more than two late fees over a three year period. These two additional suggestions will also take care of the rare occasion when a customer has lived in the City for a long period of time, has only paid their bill late a few times but has never previously had their services disconnected, such as Lucille Carr and Sean Thompson. Lastly, as mentioned by Mr. Colombo's report, staff (Joanne Dalka and Michelle Greco) will continue working with MUNIS, the developer of our software, to upgrade and improve the Utility Billing software. Enhancements such as automated monthly customer credit card transactions (similar to bank drafting), electronic credit card files through the city processing transactions versus through a third party vendor, a credit rating system and electronic billing have been discussed with representatives of MUNIS. Per the representatives, these enhancements are planned in future releases/versions of the software. FUNDING: The cost of implementing the Televox automated customer notification process will be: a one time setup fee of $3,000; an estimated $0.28 per customer for up to a two minute message (additional $0.08 per customer for each message minute thereafter); and a $0.12 per record to update incorrect customer telephone numbers. All fees are charged to the users (or utility customers). With this cost schedule in mind, we are estimating a $3,000 one time fee and a $900 monthly fee (or $10,800 annually) for this new notification service (conservative estimate). A supplemental appropriation in the Fiscal Year 2006/2007 budget (Finance - Utility Billing and Customer Service Division 1360) will be necessary to reflect these new monthly fees. The Water and Sewer Fund (401) would need to transfer $8,400 (setup fee plus 6 months service) from Fund Balance to the General Fund: Finance - Utility Billing and Customer Service Division (1360). (See attached "Customer Order Form" and "Service Agreement") Regular Agenda Item 302 February 26, 2007 Page 3 of3 As for the cost of waiving the five dollar ($5.00) late fee, thirty dollar ($30.00) service reinstatement fee and one hundred dollar ($100.00) deposit requirement, although staff believes our penalty revenues will drop slightly as a result of these fee waivers, it will be offset by reduced staff, City Manager and City Commission time spent each Wednesday dealing with customers who perceive the system to be unfair and inflexible. As a result, staff, City Manager and City Commission would have more time to spend dealing with other important City matters. RECOMMENDATION: It is recommended that the City Commission approve the following improvements to the Utility Services Collection Process: 1) Authorize City staff to give a one time courtesy five dollar ($5.00) or five percent of the outstanding bill, which ever is greater, late fee waiver/reversal during the life time of their utility account. 2) Authorize City Manager to execute an agreement and customer order form with Televox to provide automated customer notification of their delinquent payment status and potential disruption in utility services, review and revise agreement as necessary and authorize a supplemental appropriation from the Water and Sewer Fund to the General Fund for service fees in the Fiscal Year 200612007 Budget in the amount of $8,400. 3) Authorize staff to give a one-time courtesy waiver/reversal of the thirty dollar ($30.00) service reinstatement fee and one hundred dollar ($100.00) deposit requirement if the customer has never been previously disconnected and has had no more than two late fees over a three year period. A TT ACHMENTS: Customer Care Report from George Colombo Customer Order Form and Agreement with Televox COMMISSION ACTION: Preliminary Report Customer Care in the Utilities Billing Department Prepared by George Colombo for the City of Winter Springs Executive Summary Formal customer care training for the Utilities Billing department would provide basic skills for dealing with the public, but it would be a mistake to think that a lack of customer care training is the primary reason for customer complaints. The existing customer care skills the department displays are adequate. Moreover, department employees are generally conscientious and are trying to do what they believe is expected of them. More significant - and more immediate - improvements in customer care performance are more likely to come from reworking some of the department's systems as well as certain existing policies and procedures. My most important observation about customer care practices in this department: It is structurally unfeasible to give employees responsibility for customer care without also empowering them to address customer issues when they arise. Contributing Factors For Unsatisfactory Customer Experiences The threat of disconnection - or an actual disconnection - is at the heart of the majority of unsatisfactory customer experiences. These incidents can be categorized as follows: I. Customers who have temporary or long-term financial problems that hamper their ability to pay. II. Customers who have inadvertently - but in good faith - neglected to pay their bill. III. Customers who are repeatedly late and/or in dispute with the department. Currently, department policy doesn't provide for differentiation among these categories. Even more important is the fact that department employees have no latitude to deviate from written policies and procedures- even in small ways. (For example, employees are not authorized to do something as trivial as waiving a five-dollar late fee for customers in Categories I and II if the situation appears to warrant it.) As a result, customers sometimes perceive department employees to be inflexible when they're simply following the rules they were given. The department employees see themselves implementing the city's policies, but customers interpret the situation as poor or indifference customer service. If a customer chooses to press matters, a supervisor is required to intervene but sometimes has little more latitude than front line employees. At this point, some customers (including some vociferous Category III customers) contact the Mayor, the City Manager and/or a City Commissioner. In some of these cases, employees are then inveighed upon to offer accommodations to the customer that they were not previously allowed to offer. This apparently selective flexibility, combined with an almost complete lack of empowerment, is a significant source of frustration for department employees. To repeat my observation in this report's Executive Summary: It is structurally unfeasible to give responsibility for customer care to employees without also empowering them to address customer issues (and giving them the tools they need to do so). Strategic Objectives In general, these are the principles I am suggesting as a context for considering specific changes in the department's policies and procedures: · Prevent disconnects by getting as many customers as possible on an automatic payment/communications system. Find as many ways as possible to make it easy for customers to pay. · Develop policies that reflect the differences among the three customer categories referenced above. · Empower front line employees to use their judgment regarding individual payment/disconnect situations. · Institute a system for referring low income and financially challenged (Category I) customers to appropriate state/county resources. (I should mention that this principle is included as the result of a suggestion by a department employee.) Specific Recommendations With these principles in mind, I've developed some specific suggestions for improving the department's systems, policies, and procedures. The city's customer care performance would improve significantly if it was able to: 1. Take over credit card processing and devise procedures to allow utility bills to be billed directly to a customer's credit card. 2. Encourage customers to sign up for an available auto-pay option (rapid payor credit card). 3. Develop a system for objectively differentiating among customers regarding creditworthiness. 4. Make sure everyone in the department is thoroughly trained on Munis and able to access relevant customer information quickly. 5. Institute guidelines that would empower department employees to make judgment calls on specific situations without supervisor intervention. (Even modest changes here will make a difference in customer perceptions and, along with proper training, ought to significantly reduce the number of complaints that are made to the City Manager and commissioners.) 6. Install credit card terminals at City Hall to facilitate payment. (This would have the additional benefit of allowing other city departments to accept credit card payments.) 7. Consider allowing field operations personnel to accept checks and/or credit card payments in the field to avoid disconnection. S. Identify community resources (both private and public) for low income families and families that need temporary financial assistance (Category I). Designate one or two department employees to be trained in placing needy families with the appropriate resources. Customer Care Training While I would certainly be able to schedule training anytime the City manager wants, I believe training would be far more effective after the issues discussed in this preliminary report have been addressed. In-process Items · Michelle is conducting research what kinds of costs would be involved if the city began doing its own credit card processing, either through Bank of America or through another vendor. · Joanne is working to schedule a conference call with the folks from Munis. The purpose of the call is to determine what sort of functionality is available in the software to address some of the ideas discussed above. The conference call is tentatively scheduled for June 27th. 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CLIENT AGREES THAT TELEVOX AND ITS OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, AGENTS, LICENSORS AND REPRESENTATIVES WILL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, DAMAGES OR COSTS INCURRED AS A RESULT OF LOSS OF TIME, LOSS OF SAVINGS, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF GOODWILL, WHETHER FORESEEABLE OR UNFORESEEABLE, THAT MAY ARISE OUT OF OR IN CONNECTION WITH THE AGREEMENT INCLUDING, BUT NOT LIMITED TO, DAMAGES OR COSTS RESULTING FROM THE USE OR INABILITY TO USE THE NETWORK OR SERVICES OFFERED THEREUNDER, EVEN IF TELEVOX HAS BEEN NOTIFIED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES OR COSTS INCURRED, AND WHETHER SUCH LIABILITY IS BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY OR OTHERWISE. B. IN NO EVENT WILL THE AGGREGATE LIABILITY OF TELEVOX FOR ANY DAMAGES INCURRED BY CLIENT EXCEED THE FEES RECEIVED BY TELEVOX UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE TIME AT WHICH THE DAMAGES AROSE, REGARDLESS OF THE FORM OF ACTION, WHETHER BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY OR OTHERWISE. INDEMNIFICATION. A. 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