AGENDA BILL. Beaverton City Council Beaverton, Oregon BUDGET IMPACT

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1 AGENDA BILL Beaverton City Council Beaverton, Oregon SUBJECT: Contract Award - Utility Bill Printing, Mailing FOR AGENDA OF: BILL NO: and Electronic Bill Presentment and Payment Services Mayor's Approval: ~()~.".1iI DEPARTMENT OF ORIGIN: DATE SUBMITTED: Finance ~1MJ2 CLEARANCES: Purchasing ~ City Attorney _ Utility Billing ~Je.:-- PROCEEDING: Consent Agenda EXHIBITS: 1. Pricing Comparison of Top (Contract Review Board) Two Vendors 2. Cost Comparison of Top Two Vendors Over a Five-year Period 3. Cost Savings E-Bill Compared to Print Bill Process BUDGET IMPACT EXPENDITURE AMOUNT APPROPRIATION REQUIRED $28,300* BUDGETED $39,450 REQUIRED $-0-* *The $28,300 expenditure required is the approximate first-year cost to provide programming and setup for electronic bill presentment and acceptance of credit card payments, as well as annual fees for printing, stuffing, mailing, inserts, E-Bills and archiving of 18,000 regular and 1,000 delinquent customer utility bills monthly. Funding for this contract, if approved, is contained in the FY Budget for the Water Fund (501) $13,350, Sewer Fund (502) $13,050 and Storm Drain Fund (513) $13,050, under Program 0545 Utility Billing and Collections, Account Numbers 511 Professional Services. A similar amount is recommended to be included in the Proposed FY Budget. HISTORICAL PERSPECTIVE: The City currently has a contract for printing, stuffing, mailing, inserts and archiving its utility bill statements with Wright Imaging Solutions. The City's approximately 18,000 customers are divided into five billing cycles. As each billing cycle is completed, an electronic file of billing information is sent to Wright Imaging Solutions where the file is processed and utility bills are printed, stuffed and mailed to ensure the lowest possible postage charges. The City is seeking to offer our customers the option to receive an electronic form of their utility bill (E-Bill) and pay their utility bill on-line with a credit card or direct charge to their checking or savings account (via ACH-automated clearing house). Specifically the services include: The ability to sign up to receive their utility bill electronically (called E-Bill). The customer would be notified via that their utility bill is available for viewing. If the customer chooses the E-Bill option, they will be required to make their payment electronically using a Visa or MasterCard or by authorizing the payment as a charge to their checking or savings bank account. Other credit card options such as Discover and American Agenda Bill No: 09067

2 Express can be allowed in the future, however, we would prefer to start out with only accepting Visa or MasterCard as the credit card processing costs for these cards are traditionally less than the cost for Discover and American Express. The customer can choose to have the utility bill automatically paid each month or approve each payment by logging onto their account and authorizing each payment. The customer can view up to 24 months of billing statement history on their account. However, once a customer does sign up for E-Bill, it will take 24 months of future billing activity in order to be able to view up to 24 months of history. INFORMATION FOR CONSIDERATION: An RFP (Request for Proposal) was advertised in the Daily Journal of Commerce on August 26, 2008, with a response due date of September 23, 2008, later amended to September 30, Proposals were received from the following five vendors: Data Prose, Oxnard, CA Metavante, Milwaukee, WI Automatic Funds Transfer Services, Seattle, WA Wright Imaging Solutions, Portland, OR National Exemption Services, Safety Harbor, FL. A rating committee comprised of three staff members reviewed and evaluated the proposals using a point value rating system with the following three criteria (a combined 75 maximum point value): 1. Experience, Qualifications & Availability - Maximum Point Value of 25 The criteria for evaluating the vendors' proposals were: level of experience emergency backup provisions ability to handle billing format changes hours of operation to accept and process billing files customer service hours restrictions due to vendor location ability of City's customer service staff to access the system functionality of vendor's software module 2. Processing Methodology - Maximum Point Value of 25 The criteria for evaluating the vendors' proposals were: ability to accept the City's electronic bill file format ability to combine statements with identical addresses for mailing purposes ability to address foreign mail delivery ability to perform selective inserting minimal restrictions on billing insert size, weight, type and formatting ability to separate the submitted electronic file into those accounts requiring printed statements and those requiring E-Bill notifications ability to sort printing file to obtain the lowest postage level presentment of E-Bill image is identical to that of a printed bill ability for customers to self enroll and manage their own passwords for E-Bill ability for any customer to make one-time credit card payment on-line utilizes proper security protocols for electronic transactions customers experience a seamless transfer from the City's Website to the E-Bill website when using the E-Bill system ability to interface with City's credit card processor 3. Deadlines - Processing, Implementation &Mailing - Maximum Point Value of 25 The criteria for evaluating the vendors' proposals were: -2- Agenda Bill No:

3 ability to meet a 24-hour turnaround from when the City's electronic billing file is presented to when the printed bills are mailed and E-Bill notifications are sent ability to accommodate last minute or emergency changes minimal mailing transit time from the vendor's facility to the customer the frequency of the vendor's mail drops to the post office and time handling and delivery of inserts and required timeline notification and confirmation to City system implementation schedule The rating committee reviewed and scored the five proposals as follows: Data Prose - 57 Points Metavante - 39 Points Automatic Funds Transfer Services - 38 Points Wright Imaging Solutions - 72 Points National Exemption Services - 30 Points The top two ranked proposals, Data Prose and Wright Imaging Solutions, were then evaluated using the fourth criterion - Cost. Each proposal's pricing schedule is presented in Exhibit 1 and, using the pricing schedules, a five-year cost was calculated (Exhibit 2) using the following billing details: 1. 18,000 accounts are billed per month and are included in the transmission file to the vendor for processing ,200 accounts will remain with the current process of having a bill printed and mailed each month. 3. 1,800 accounts sign up for the E-Bill system. 4. One billing insert per month. The results of the five-year cost calculation are detailed in Exhibit 2 and demonstrate that Wright Imaging Solutions' cost for a five-year period totals $126,446 compared to Data Prose's costs of $188,409. The major differences in the cost proposals were due to the following: Types of CharQes Estimated Quantities Over 5 Years Wright Imaging Data Prose Cost Variance Per Piece Printing and Processing 972,000 $0.070 $0.077 $ 6,804 Per Piece Billing Inserts 972,000 $0.003 $0.015 $11,664 E-Bill Presentment 108,000 $0.150 $400 Per Month $7,800 Credit Card Fees 81,000 $0.180 $0.350 $13,770 Automated Clearinghouse Fees 27,000 $ % of Transaction Amounts $18,225 Based upon the cost evaluation, Wright Imaging Solutions was selected as the top responder to the Request for Proposal. Wright Imaging was then invited to further demonstrate their product to the Finance and Utility Billing Customer Service Staff. Staff found that the product and services were easy to setup and administer and recommends the contract award to Wright Imaging Solutions. As a note, the per item cost to produce and deliver a bill is $0.135 less using the E-Bill process than the traditional bill printing and mailing process (see Exhibit 3). -3- Agenda Bill No: 09067

4 RECOMMENDED ACTION: Council, acting as Contract Review Board, award a contract for one year to Wright Imaging Solutions of Portland, Oregon, in the amount of $28,000 for Setup and Maintenance of Electronic Bill Presentment and Payment services, as well as, Processing, Printing, and Mailing of Printed Utility Billing Statements, in a form approved by the City Attorney and renewable yearly for four additional one-year periods at the City's option through FY based on Council's approval of the future budgets. -4- Agenda Bill No: 09067

5 Exhibit 1 City of Beaverton Schedule of Proposal Pricing Comparison EBPP & Printing, Processing and Mailing Utility Bills Wright Imaging Data Prose Types of Costs Initial Charges Set Up/Formatting $500 EBPP set up $3,500 $3,000 Credit processing set up $1,000 ACH processing set up $1,000 Monthly Charges Per piece printing $ $ Per piece processing $ $ 0.03 Per piece inserts $ $ Programming (per hour) $ 75. $ 185. E-bill presentment fees (per ) $ 0.15 E-bill presentment fees (per mo. - all bills) $400. $0.60 or 1.25%, ACH Fees (per trans) $ 0.18 whichever is greater Credit Card Fees (per trans) $ 0.18 $ 0.35 Archiving Fees (Bill Imaging/on-line viewing) $10.00 per 1,000 $ Annual Charges Maintenance Fee (after 1st year) $1,200 n/a -5

6 City of Beaverton Exhibit 2 Schedule of Cost Comparison of Top Two Vendors Over a Five-Year Period Response to RFP on Utility Bill Printing Mailing and Electronic Bill Presentment and Payment Services Wright Imaging Solutions Proposal Number of Number Number Items Over Cost Over Rate Of Items Of Items Five-Year The Five-Year Types of Costs Per Item Per Month Per Year Period Period Comments Initial Charges Set-up and Formatting $ 3,500 Monthlv Charges Per piece printing $ , , ,000 $ 24,300 Estimate 10% E-Bill use Per piece processing $ , , ,000 $ 43,740 18,000 * 10% = 1,800 Per piece inserts $ , , ,000 $ 2,916 Programming (per hr) $75.00 Per Hr 2 hrs. 10 hrs. $ 750 Estimated CC use (75%) E-Bill presentment fees (per ) $ ,800 21, ,000 $ 16,200 1,800 * 75% = 1,350 Credit Card Fees (per trans) $ ,350 16,200 81,000 $ 14,580 Estimated ACH use (25%) ACH Fees (per trans) $ ,400 27,000 $ 4,860 1,800 * 25% = 450 Archiving Fees (Bill Imaging/on-line viewing) $10 Per 1,000 18, ,000 1,080,000 $ 10,800 Average transaction = $68.40 Annual Charges Maintenance Fee (begins after fist year) 1, $ 4,800 Total Estimated Cost of Wright Imaging Proposal Over a Five-Year Period $ 126,446 I Data Prose Proposal Number of I Number Number Items Over Cost Over Rate Of Items Of Items Five-Year The Five-Year Per Item Per Month Per Year Period Period Comments Initial Charges Set-up and Formatting $ 500 EBPP set up 3,000 Credit processing set up 1,000 ACH processing set up 1,000 '" Monthlv Charges Per piece printing $ , , ,000 45,684 Estimate 10% E-Bill use Per piece processing $ , , ,000 29,160 18,000*.10= 1,800 Per piece inserts $ , , ,000 14,580 Programming (per hr) $185/hr 2 hrs. 10 hrs. 1,850 Estimated CC use (75%) E-Bill presentment fees (per ) $400/mo 24, *.75 1,350 Credit Card Fees (per trans) $0.35/trans 1,350 16,200 81,000 28,350 Estimated ACH use (25%) ACH Fees 1.25% of trans $ 450 5,400 27,000 23, * Archiving Fees (Bill Imaging/on-line viewing) $ , ,000 1,080,000 16,200 Average transaction = $68.40 Annual Charges None Total Estimated Cost of Data Prose Proposal Over a Five-Year Period $ 188,409

7 Exhibit 3 City of Beaverton Schedule of Cost Savings to Produce and Deliver a Printed Bill Compared to an E-Bill Costs to Produce and Deliver a Printed Bill Activity or Materials Cost Costs to Produce and Deliver an E-Bill Activity Cost Bill Stock NO.9 return envelope No. 10 outside envelope Processing & Printing $ $ $ $ to customer that bill is available ACH or Credit Card file to Bank/processor $ $ Postage $ Cost of a Printed Bill $ Cost of an E-Bill $ Cost Savings Per Item $