CITY OF BURBANK Burbank Water and Power STAFF REPORT

Transcription

1 CITY OF BURBANK Burbank Water and Power STAFF REPORT DATE: September 1, 2015 TO: FROM: SUBJECT: Mark Scott, City Manager Ron Davis, General Manager, BWP AGREEMENT WITH SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (SCPPA) TO PROVIDE RELOCATION REFERRAL SERVICES TO BURBANK CUSTOMERS AND REVENUE SHARING FOR THE CITY RECOMMENDATION Approve a Professional Services Agreement with SCPPA and Kandela, LLC (Kandela) for relocation referral services and revenue support for low-income customers and authorize the BWP General Manager to execute a Task Order under the Master Professional Services Agreement between Kandela and the SCPPA from September 2, 2015 through September 1, BACKGROUND As the media capital of the world, Burbank is the permanent or temporary home for people from all over the globe. Setting up a new household when you re 100 or 1000 miles away can be challenging. Many customers in this situation have only a day or two to find lodging and secure services. While not necessarily a problem for those customers who already live or work in southern California, there are many customers who move to Burbank and are unfamiliar with the area and service providers. Over the years, these customers have asked BWP if we could assist them in obtaining service from local providers for basic services like cable, internet, and TV. After receiving a referral from a councilmember, BWP investigated a potential solution to this long standing problem for a portion of our community; a moving referral service. Research revealed that the Sacramento Municipal Utility District (SMUD) has been providing this kind of referral service to their customers for over a decade and they believe this contributes to their positive image and great customer satisfaction ratings. 1

2 DISCUSSION As a City-owned enterprise, BWP recognizes its responsibility to the Burbank community. To ensure continued value and viability, BWP maintains consistently high customer satisfaction and has expanded service offerings from traditional potable water and electricity to innovative offerings such as recycled water, broadband service for businesses, EV charging, and Wi-Fi service. As the utility industry continues to change, BWP must also evolve and seek ways to improve service to the community. ANALYSIS Because of the nature of Burbank s employment market, many people move here from other states and have no idea who to contact for basic services in their new community. Moving can be a hassle under the best of circumstances. But when you have only one or two days to set up your household and you re not familiar with the local marketplace, you have an extra layer of complexity. People relocating typically set up their utility services first and then turn their attention to the other services in their home. This makes BWP an ideal referral partner for relocation services. Recognizing that a handful of companies exist that provide this service and that our peers might also be interested in offering this benefit to their communities, the Southern California Public Power Authority (SCPPA), of which Burbank is a member, developed a Request for Proposal (RFP) on behalf of its members to solicit bids from potential providers of this service. The RFP was released March 27 th and remained open for two weeks. Kandela was the only respondent and therefore chosen by SCPPA to provide services to any SCPPA member utility interested in using them. As a result, SCPPA executed a Master Professional Services Agreement with Kandela on June 1, 2015 whereby SCPPA members may opt into contracting with Kandela (Exhibit A). Kandela, in business since 2012, uses a contemporary business model similar to many businesses today such as Home Advisor or Angie s List. Customers self-select to use a service coordinator for a one-stop approach. Much like a tourist turns to the hotel concierge to help secure theatre tickets or restaurant reservations while vacationing, these service coordinators help customers connect with a wide range of services. In this case, Kandela would be the service coordinator helping customers set up their new household and ease the hassle of finding and contacting a multitude of services during a hectic time. How does it work? Customers are in absolute control of this process. If they would like assistance transitioning to necessary services in their new hometown, they may elect to be transferred to Kandela by BWP representatives after signing up for municipal services. Or, if they prefer to sign up for ancillary services without assistance, they are free to contact each service provider themselves. Kandela partners with all major providers of cable, TV, and internet in a local area for the basic services a customer might need. For example in Burbank, Kandela partners with 2

3 AT&T, Verizon, Time Warner and Charter to provide all entertainment and communication options to a customer at one time, facilitating the data gathering process and simplifying the decision for a customer. Kandela staff has access to the same pricing and package options as the individual vendors and is authorized to discuss all options with customers for easy comparison. They also activate services and schedule installations. Kandela also partners with local services like moving companies, cleaning services, and storage facilities. For these services, they have an inventory of local companies which they refer if customers are interested. As a national company, Kandela partners with 70 service providers large and small throughout the country and welcomes the opportunity to add local companies to their portfolio of referral companies to ensure customers have an opportunity to stay within and contribute to their community. Any local business is welcome to contact Kandela directly for participation in their vetting process. BWP staff spoke with Gary Olson at the Chamber of Commerce and he is supportive of Kandela, their services, and the possibilities to reinvest back into the community through local businesses. Quality counts Kandela has active service agreements with 40 referral companies at this time. As with any business, quality service and customer satisfaction are vital to growth and success. As such, Kandela has high expectations of its service providers and has a tiered approach to ensuring quality is maintained. Rigorous Screening - They only partner with dependable, quality companies with good reputations. Before entering into a partnership agreement with any company, Kandela conducts a robust and rigorous screening process. They conduct research to find companies with good performance track records and positive feedback from customers. Reference Checks - They verify the company s work product and customer service quality via reference checks. Their team researches online (YELP reviews, BBB, etc.) for companies with good track records and standards of service. Corporate Culture - They contact the company and engage with their management to discuss potential partnerships and to learn about their culture, customer service operations, and performance standards. Escalation Process -They have an escalation process when necessary. Kandela handles any disputes or customer service issues that may occur between the customer and the provider. Continuous Evaluation - They continually evaluate all service providers on activation rate, customer satisfaction (firsthand conversations between Concierge and customer), and overall experience. Feedback They share feedback in daily and weekly meetings so problems rise to the surface quickly. Kandela has regular calls with providers to review issues and if complaints seem to be out of the ordinary, continuous, and/or not addressed to their level of expectation, the relationship is terminated. 3

4 Staff listened to three taped conversations between Kandela Concierges and customers. These confirmed their overall commitment in providing excellent customer service. In addition, staff contacted current Kandela clients; each one gave extremely high praise and credits Kandela with improving their overall customer satisfaction scores. One example we might all relate to comes from a local Kandela customer, Los Angeles Department of Water and Power (LADWP). Kandela shared some of the results of customer surveys received from LADWP s customers transferred to Kandela for moving referral services. The survey question was Has your opinion of LADWP improved after your experience with Kandela? On a 1 to 10 scale, 100% of customers surveyed responded with a 10 to that question. Given recent difficult times between LADWP and its customers, this boost in customer confidence and satisfaction is priceless. While BWP has consistently excellent customer ratings, maintaining this positive relationship with our customers is imperative and we cannot stand still competitively while others provide more convenient offerings. Offering relocation referral services is another way we can reach those customers who have expressed a desire for this assistance. What does this service cost? Kandela s service is completely free to the BWP and our customers. They make their money through referral fees from their contracted service providers and share 20% of all revenue generated from our customer referrals. The range of fees that Kandela gets paid from their service providers are as diverse as $5 for arranging a truck rental, all the way up to $750 for a high-end security package with ADT or Time/Warner Intelligent Home. To understand how much revenue this might generate Kandela has made some assumptions based on their experience with other customers. They assume that about 25% of customers moving into the area will take advantage of Kandela s moving referral services. For BWP, this would be about 135 customers each month. If each customer selected two services the revenue for Kandela might be $20,000/month and about $4,000/month for BWP. Staff s view is that this estimate is likely to be overly optimistic. Support for low-income customers The City Council has been challenged to secure sufficient funding for low-income programs and services. While the City s Electric utility has long had means to assist low-income customers, providing financial assistance to low-income customers with Water, Sewer, and Refuse services has been problematic. A benefit of Kandela s business model is that they share their referral fee revenue with BWP from BWP referrals. While this may not amount to a large sum of money, these modest funds could be allocated to Project Share to provide assistance to low income water, sewer, and refuse customers. Project Share is a community funded program and has in recent times faced the circumstance where it simply ran out of funds to provide assistance. While a referral service may seem like a minor service to offer 4

5 as it will only be valued by those who need it and they are not here to express their need for relocation assistance, additionally while also perhaps a very minor amount of funding it can none the less help to ensure that funds are available to our most vulnerable municipal services customers. Project Share is administered by Burbank Temporary Aid Center (BTAC). BTAC is a trusted, local non-profit. Next steps In order to proceed with the arrangement with Kandela, the BWP must execute a Task Order to be attached to the Master Professional Services Agreement between Kandela and SCPPA, which will outline the obligations between Kandela and the BWP (Exhibit B). Under this Task Order, Kandela will be responsible for providing moving referral services to the BWP s customers who choose to use Kandela to connect with home service providers. Kandela will bill and collect revenue share amounts due from service providers, and remit quarterly revenue shares to BWP. In addition, Kandela will provide BWP with monthly reports indicating program performance information. By executing the Task Order, BWP will be obligated to offer Kandela s services to customers who are activating, transferring or canceling utility service, or who are otherwise in the process of moving. BWP may do this by either providing customers with Kandela s contact information or transferring customers to Kandela s call center directly. However, actual referral is strictly voluntary on the part of the customer. FISCAL IMPACT There is no cost to BWP for this program. Revenue received is not restricted. Staff recommends this revenue be used to fund Project Share specifically to aid in alleviating a long term need for water, sewer, and refuse low income assistance CONCLUSION We believe that the services provided by Kandela will be one more way to help our residents. Adding in the ability to share in the revenue to support our low-income customers pay their Municipal Services Bill makes this a win-win for the community. Therefore, we request City Council authorization for the BWP General Manager to enter into a Professional Services Agreement with Kandela through the Master Professional Services Agreement between Kandela and SCPPA from September 2, 2015 through September 1, 2018, in order to provide the option for relocation referral services to BWP customers, and revenue sharing to be used to meet the problematic funding needs of providing financial assistance to the most needed customers with Water, Sewer, and Refuse municipal services. EXHIBITS Exhibit A Master Professional Services Agreement between the Southern California Public Power Authority and Kandela, LLC 5

6 Exhibit B Proposed Task Order between the City of Burbank and Kandela, LLC 6