SR - AGR-6081 - UTILITY BILLING SERVICESp.
roU N . f y C
AGENDA ITEM
Meeting Date March 11, 2014
TO: Honorable Mayor and
Members of the City Council
THRU: John W. Sibley
City Manager
FROM: Richard Jacobs
Finance Dire to
1. SUBJECT
ReviewedNerified By:
City Manager
Finance Direc r
To Be Present y:
Cons Calendar _
City Mgr Rpts
Council Reports
Legal Affairs
Boards /Cmtes
Public Hrgs
Admin Reports
Plan/Environ
Award of Professional Service Agreement with a current City vendor Tele- Works, Inc (partner company
of Utility Billing's software company) to provide Utility Billing with the services of a new website, 24/7
in -bound and out -bound telephone service, along with credit card and electronic check processing
service, at a current annual cost of $71,400 saving $24,000 annually.
2. SUMMARY
This agreement authorizes IT services between the City (Utility Billing) and Tele- Works, Inc. Staff is
recommending a five (5) year contract, with the option of three additional one (1) year increments.
3. RECOMMENDED ACTION
Approve a five year agreement with Tele- Works, Inc. for IT services based on per transaction costs not
to exceed $90,000 (estimate based on future customer usage over the next five years) and authorize the
Mayor and City Clerk to execute the agreement on behalf of the City.
4. FISCAL IMPACT
Sufficient funds are budgeted in account 600.1222.51700.00000 (Contractual Services (Labor &
Maintenance) and 600.1222.51420.00000 (Maintenance Contracts).
5. STRATEGIC PLAN GOAL(S)
2a Be a fiscally healthy — Expend fiscal resources responsibly.
6. GENERAL PLAN IMPLEMENTATION
N/A
ITEM 1 3/11/2014
7. DISCUSSION and BACKGROUND
As technology advances so do customers needs. During the last few years, the Utility Billing Division
of Finance has continued to work towards improving technology for our customers. Utility Billing has
been evaluating partner companies of our current software company Harris/NorthStar. By using partner
companies, the development costs needed for the two Utility Billing vendors software to communicate
are considerably reduced.
We have compared two vendors who are offering a full service bill payment and notification contract,
which includes the following options:
• Web /Online Services- A more user friendly website
• Pay Now — quick access to pay a bill. (New)
• Account Portal
• An account portal where a user has a login and password and can save and store
payment info for future payments. (New)
• View web bills, payment history, billing history and consumption history. (Current)
• Paperless eBilling — a user can control bill reminder settings and opt out of receiving a paper
bill. (Current)
• Real -time account access and payment posting (Current)
• Text notification - a user can control bill /payment reminder settings. (New)
• 24/7 Telephone system- Utility bill payment options of Credit Card, and eCheck, including real -
time account access for balance and payment history. Available in English and Spanish.
(Current)
• Alertworks (Outbound calling system) — Calls customers advising of overdue balance and
possible disconnection and allowing the customer to push 2 to pay at the time of the call.
(Current)
• Credit Card and eCheck Processing
• Next day funding (Current)
• Secure, encrypted bank card and ACH bank draft approvals (Current)
• Exclusive Credit Card Decline - Minimizer Service with Fraud Prevention (New)
• Credit Card auto - payments (New)
• Detailed balancing reports (Current)
• Real -time payment authorizations for credit card and ACH(Current)
ITEM 1 3/11/2014
Based on current customer activity and current vendor charges, annual fees for these services are almost
$96,000. For comparison, a cost analysis of both companies, is as follows:
Tele- Works, Inc. - $1.80 per credit card fees - maximum dollar amount allowed to charge is $1,500.00
$0.45 per eCheck
Total estimated annual cost of $71,400
Paymentus - $1.40 per credit card fee - maximum dollar amount allowed to charge is $400.00
$0.50 per eCheck
$63,000 - estimated — based on current customer activity - a 3.5% of payment
amount for non - consumer cards that exceed 5% of total per month
Total estimated annual cost of $122,000 (with the 3.5 %)
After reviewing these companies' services and costs, Tele- Works, Inc. is being recommended. Utility
Billing already has an ongoing and tested relationship with Tele- Works, Inc. and are currently using
their IVR and notification software, costs of which will now be rolled into the per transaction charges.
Other benefits of using Tele- Works, Inc. for all services are:
• Immediate savings of over $24,000 a year
• Better service with only one vendor instead of four
• Tele- Works, Inc. will host the server and services (no longer City of Orange's responsibility)
• Save employee daily balancing time with one vendor /report
• Next day funding
• Free on -site equipment for point -of -sale /counter transactions
• Tele- Works, Inc. is responsible for PCI compliance
• They have over 265 customers and 39 Harris/NorthStar customers
• With the new options available the usage of the services will go up, but the cost per transaction
will not increase, which is not true of all the vendors we are using to provide the services now
• Lockbox costs should decrease with customer usage of the new technology
Thus we are recommending that Council approve this new contract with Tele- Works, Inc.
8. ATTACHMENTS
Consultant Service Agreement.
ITEM 1 3/11/2014