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UPDATE ON UTILITY BILLING By: Sandra Ashley Helling, Finance Officer CASE # 5 Background: In July 1992, Staff was approached by representatives of Anoka Electric Cooperative to ascertain the City's interest level in contracting out the services of utility billing. Shortly thereafter, Staff discussed this opportunity with the Finance Committee and it was agreed Staff would work with AEC to determine the feasibility of this project. Since that time, Staff has met with AEC's project team on several occasions to provide information on our requirements and discuss the capabilities of their billing system. The following recaps a verbal progress report received June 2nd from Doug Uhrammer of AEC: AEC Utility Billing Service Update AEC has just received new software that is capable of handling municipal utility service codes in addition to the electric codes of AEC. Their staff will be in training for conversion to the new software the week of July 6. At that time they will also be trained on generating billings for other services such as sewer, water, stroetlights, etc. At the completion of this training, or as soon thereafter as possible, AEC would like to run a parallel or mock billing with the City of Ramsey. At the conclusion of this run, AEC staff will determine what costs are involved for generation of these bills and a proposal will be submitted to the City of Ramsey. If the City accepts the proposal, it is AEC's goal to provide utility meter reading and billing by September, 1993. A decision has not yet been made as to whether municipal charges should be on a separate billing or merged in some fashion with the AEC billing, and this decision would most likely dictate the regularity of the billing (monthly or quarterly). Observations: The City's utility district is quite small and contracting with Anoka Electric to provide our billing service should provide economics of' scale, as with few exceptions, our customers are already part of their customer data base. The project team at AEC is looking at the venture with our City as a pilot program - meaning the City of Ramsey would incur no cost for development of the program. As AEC does plan to market the billing service to other municipalities, development cost is appropriately borne by AEC. Cost would be incurred by the City only after a parallel run and when AEC would be actually providing the full utility billing service. My best estimate at this time is the City's cost to contract for utility billing will not exceed the internal cost for finance staffing and software. But the City would gain ease of expansion in the number of accounts and services billed without increasing the city staffing level, computer capabilities or dedication of space. In the Fall of 1992, the Finance Office requested a half-tim~ position replacement of an existing full-time position to avoid a potential lay-off situation in the event the City contracted out for utility billing. At that time, AEC expected to run parallel for the first quarter 1993 billing and be fully operational for the second quarter billing. Due to the integration of this new market opportunity with an entire billing system conversation at AEC, this time line was not achieved. II