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HomeMy WebLinkAbout03/03/1992, C-3 - FINAL PASSAGE OF ORDINANCE NO. 1204 REVISING REQUIREMENTS FOR INITIATING AND DISCONTINUING WATER SERVICE AND ACCEPTING CREDIT CARDS FOR PAYMENT OF CITY SERVICES Illll^I�IIII�II�IIIIII I MEETING GATE: I �pc�� o� San tins OBISp0 03-03-92 i COUNCIL AGENDA REPORT ITEM NUMBER C-3 FROM: William C. Statler, Director of Finance Prepared by: Linda Asprion, Revenue Manager �� " Alison Lloyd, Interim Customer Services Supervisor �xWV' U° SUBJECT: FINAL PASSAGE OF ORDINANCE NO. 1204 REVISING REQUIREMENTS FOR INITIATING AND DISCONTINUING WATER SERVICE AND ACCEPTING CREDIT CARDS FOR PAYMENT OF CTTY SERVICES CAO RECOMMENDATION Give final passage to Ordinance No. 1204. BACKGROUND At its meeting of Tuesday, February 18, 1992, the City Council took action on a 5-0 vote to introduce Ordinance No. 1204 to print and adopted Resolution No. 7080 setting forth requirements for initiation and discontinuation for water service within the City of San Luis Obispo, accepting credit cards for payment of City services, and establishing a reconnection fee and refundable deposit requirements. The agenda report from that meeting is attached. Public testimony was received and staff recommends that Council give final passage to the Ordinance. ATTACHMENTS: I Customer Service Pilot Programs Original Agenda Report from 2-18-92 Ordinance No. 1204 Resolution No. 7080 1I1111WIIIIIIIVl4IftII llulll � 1" MEETING DATE- San ATE J < c� o San Luis OBI Spo COUNCIL AGENDA REPORT ITEM NUMBER: FROM: William C. Statler, Director of Finance Prepared by: Linda Asprion, Revenue Manager. Alison Lloyd, Interim Customer Servi es SupervisoMkc'��� 'J SUBJECT: CUSTOMER SERVICE PILOT PROGRAMS CAO RECOMMENDATION Approve implementation of two pilot programs for a period of six months to improve customer service by: ■ Enabling water service to be initiated or discontinued by telephone and eliminating the $25 refundable deposit requirement for all accounts. ■ Allowing Community Development, Finance, and Recreation Departments to accept credit cards for payment of City services. In order to implement these pilot programs, the following Council actions are required: ■ Introduce an ordinance establishing revised requirements for initiating and discontinuing water service. _ ■ Adopt a resolution establishing revised reconnection fees and refundable deposit requirements to be effective April 6, 1992. REPORT-IN-BRIEF At the Council's December 5, 1990 goal setting meeting, it was decided that a key program j objective for 1991-93 would continue to be a Public Relations/Public Information Program to assist the City in better meeting the service expectations and needs of our citizens. This pilot program proposal is a direct result of this Council objective. The two pilot programs will run simultaneously for a six month period beginning April 6, 1992 and ending September 30, 1992. These pilot programs are experimental and the results cannot be predicted. As such, success is not guaranteed. However, staff is optimistic that these programs will contribute toward streamlining existing procedures in keeping with the City's program objective of continuous improvement in the area of customer service. The two pilots will be structured in a manner to obtain as much informational data as possible so that the programs can be objectively evaluated and appropriate recommendations presented to Council regarding their continuation. DISCUSSION Background At their goal-setting meeting on December 5, 1990, the Council determined that a Public Relations/Public Information Program to better meet the expectations and needs of our citizens would continue to be a key program objective during 1991-93. As such, the City C-3-4�- »+++}►�►i��IIIIIIIIIP�' ��Ill city of san Luis oBispo WMIGn COUNCIL AGENDA REPORT has been involved in a number of activities to expand and enhance our current program. Among these activities has been the development of a Customer Relations Program to achieve the City's goal of continuous improvement in the area of customer services. To facilitate this process, last summer the Finance Department worked with a customer services trainer to streamline our procedures to make them more "user friendly" and become more responsive to customer questions and concerns. The pilot programs that are being recommended in this report have been developed to meet these objectives. Pilot Program #1: Water Service by Telephone and Elimination of Refundable Deposit In August of 1991, the customer services trainer reviewed the daily operations of the Finance Department. The review was followed by a discussion with her and the Finance staff on positive ways to address customer concerns. Two issues identified during the discussion were customer dissatisfaction with not being able to initiate or discontinue water service by telephone, and the $25 refundable deposit requirement to start service. Staff estimates that approximately 25% of customer complaints received in the Finance Department concern these two issues. As a result of this discussion, a Task Force was formed, consisting of our "front-line" customer service employees, to review current procedures and research the ramifications of making these changes. Their findings and recommendations are discussed below. Review Performed by Task Force The Finance Department processes over 7,000 requests annually to initiate and discontinue water service. In reviewing the Finance Department's current procedures, the Task Force found that the City's Municipal Code, Section 13.04.030 (A) requires applicants who want to initiate water service to "sign an application form or make application by letter showing the date of application, location of premises served, mailing address, date applicant desires service, and other information as required." Additionally, the Finance Department requires a drivers license number and place of employment to assist in collection procedures for customers who default on payments and have relocated. As such, the City's current procedures require customers who want to initiate or discontinue water service to provide written proof that they are assuming responsibility for payment of this service. Although this could be accomplished through the mail, normally this is obtained by customers coming to City Hall to sign-up for service. In addition to the written verification requirements, the City's current procedure charges customers a $25 refundable deposit in accordance with the provisions of Section 13.04.030 (B) of the City Municipal Code and Resolution No. 6447 (Amending Water Service Rates). The original intent of the deposit requirement was to retain the $25 until a customer established satisfactory' credit with the City. In actual practice, the deposit is used to offset a remaining balance on a closed account or is credited to the customer's account after one year of established credit history. ■ Surveys of Other Cities and Utility Companies Once the Task Force completed its review of the City's current procedures, a survey of all cities and four private utility companies in San Luis Obispo County as well C-3-3 ���i�►��iildiil1111�1►° 11IUIIl city of San LUIS OBISPO j COUNCIL AGENDA REPORT as three college cities (Chico, Santa Barbara, and Santa Cruz) was conducted. The survey asked questions regarding initiation and discontinuation procedures for water/utility services and deposit requirements. The results of the survey indicated that of the twelve agencies contacted, only two (Morro Bay and Paso Robles) require customers to come into the agency or send documentation to provide original signatures for service. The other ten agencies allow service to be initiated or discontinued by telephone. Additionally, the survey results showed that other agencies require deposits only from renters and customers who may be a potential credit risk. However, in all agencies contacted, a significant reconnection fee is charged when service is shut-off due to non-payment. ■ Further Research Activities In addition to surveying other cities and utility companies, the Task Force contacted the City's collection agency to determine if initiating or discontinuing water service by telephone would negatively impact their ability to recover monies for defaulted payments. The collection agency indicated the procedural change of not obtaining a signature from the person assuming responsibility for the account would not impact their collection abilities. An analysis was also performed on customer accounts which were turned over to the City's collection agency for nonpayment during the period of March - December 1991. Of the 333 accounts totaling $47,300, the $25 deposit had been refunded on 113 accounts due to good credit history being established. On the remaining 168 accounts, the deposit was used to offset the outstanding balance prior to being turned over to the collection agency. The total of these remaining accounts was $30,800 for an average account balance of $180. This information indicates that the $25 deposit requirement is not sufficient in the majority of cases to negate the City's loss if a customer defaults on payment and relocates. ■ What is the Disadvantage of this Pilot Program? By implementing the pilot program and allowing initiation and discontinuation of water service over the phone, there is the possibility that some individuals will intentionally provide incorrect names or billing addresses in order to avoid responsibility for subsequent billings, or have another customer's water service discontinued as a "practical joke". This argument has been one reason why original signatures of individuals responsible for water service have been historically required. In discussion with other college cities, they have indicated that incorrect information has not been a problem - but the realization that there is the potential for these types difficulties is one reason staff is proposing a pilot program. ■ Recommendation Based upon their research, the Task Force concluded that changing the City's current procedures with respect to initiating and discontinuing water service would significantly improve service to our customers. In addition to providing better and more convenient customer services, it is anticipated that allowing water users to initiate or discontinue water service by telephone would reduce the number of"walk- C-3-�f ��������►►� �II1111I1p° �j��f� city of San tins OBISpo MOrms COUNCIL AGENDA REPORT in" customers, perhaps resulting in reduced vehicle trips for this purpose. Additionally, eliminating the $25 refundable deposit to initiate service would save the City administrative costs associated with collection and refunds. Deposit elimination would also serve to benefit customers who move within the City or own more than one property. Currently a deposit is charged each time a customer moves or for each property that is owned. Accordingly, Staff is recommending the requirement for all water service customers to provide a deposit be eliminated. However, staff also recommends that if a customer's water service is shut-off due to nonpayment, that a reconnection fee in the amount of $40.00 be imposed. This reconnection fee is based upon the actual cost (including personnel, materials, and equipment for both the Utilities and the Finance Departments) to the City for disccmnecting and reconnecting water service. Additionally, staff recommends that customers whose water is shut-off due to nonpayment be required to pay a refundable deposit. This deposit would be the same for all residential customers and is based on an average bi-monthly water bill for 22 units of water, or approximately $90.00. For non-residential customers the refundable deposit would be based upon meter size and the water usage equivalency. The proposed refundable deposits would be as follows: Unit Type/Meter Size Service Units Refundable Deposit Al] Residential Units 1.00 1" Meter 2.00 $ 180.00 1 1/2" Meter 4.00 $ 360.00 2" Meter 6.40 $ 576.00 3" Meter 14.00 $1,260.00 4" Meter 22.00 $1,980.00 6" Meter 45.00 $4,050.00 Therefore, customers who have their water shut-off for nonpayment would be required to pay the $40.00 reconnection fee plus the refundable deposit prior to having water restored. The refundable deposit would be returned to the customer after one year of good credit history or on a closed account. If the customer was a repeat offender, the deposit would be used to offset the account balance and the customer would be required to reinstate the refundable deposit. It should be noted that if a customer contacts staff prior to shut-off, payment arrangements will be made with the customer so that any reconnection fee or deposit requirements can be avoided. Implementation of the Pilot Program Although it is impossible to predict at this time whether allowing customers to initiate or discontinue water service by telephone and eliminating the deposit requirement will result in a more efficient and "user friendly' procedure, staff has developed a plan of implementation designed to maximize the program's success. The key elements of this plan are staffing, training, and equipment. 0-3-5 City Of San LUIS OBISPO COUNCIL AGENDA REPORT Starting. At this time, we believe that the staff savings by reducing the number of over- the-counter customer contacts will offset the increased time required to take service requests over the phone. However, one of the key reasons for conducting a pilot program is to confirm our cost benefit assumptions. During this pilot program, over-the-phone service requests will be handled by the Water Conservation Staff. There are two key reasons for this: ■ The Water Conservation staff is currently the initial contact with the public regarding water service questions. ■ The majority of customers who initiate water service also request information regarding the City's mandatory water conservation program. This approach during the pilot program will allow water conservation to provide a full service package to all new customers when initiating water service. The Finance Department will work closely with the water conservation office to monitor the number of water service requests received and the time involved in handling each request. Equipment. With the exception of an additional telephone line, the equipment necessary to meet the needs of the pilot program is currently available in the Water Conservation Office and Finance Department. The estimated cost to install the additional telephone line is $100 with a $15.50 monthly service charge. Training. In-house training sessions will be held prior to the start of the program which is anticipated for April 6, 1992. The program will continue through September 30, 1992. At the end of this six-month period, the program will be formally evaluated and a recommendation will be presented for Council's consideration. It should be noted that the time frame of the program was selected to correspond to the influx of Cal Poly students who directly impact the volume of water service requests processed. Pilot Program #2: Acceptance of Credit Cards During the discussion with Ms. Jackman, staff proposed the possibility of accepting credit cards for payment of City services. To determine the feasibility of implementing this change in current City procedures, a second Task Force, also consisting of front-line employees, was formed. Review Performed by Task Force The Task Force found that establishing a credit card program for the City would be relatively easy and inexpensive to implement. Each participating department would need an additional telephone line for use in obtaining approvals from the credit card company. The cost to install the extra phone line would be approximately $100 with an additional monthly service fee of $15.50. In addition, there would be a one time set-up fee of $50 for each participating department which includes the cost of the credit card equipment, and an approximate monthly fee of $55. C-3- i� ��►���IIIIIII�� IIUIII city of San LUIS OBISPO COUNCIL AGENDA REPORT It should be noted that the monthly fee will vary depending upon credit card usage. The credit card companies charge 3.3% of the total monthly revenue received by credit card. Accordingly, as more customers use a credit card for payment, the higher the fees. However, it is anticipated that the use of credit cards will reduce the number of bad checks, the number of City accounts that are turned over to the Collection Agency, and the number of water service shut-offs that are due to nonpayment. Accordingly, the administrative costs of these services will be greatly reduced which will off-set a portion of the fee paid to the bank for processing services. ■ City Department Participation On November 5, 1991, the Finance Department met with the Recreation, Public Works, Police, and Community Development Departments to discuss the Task Force findings and determine other City Departments interest in participating in a six month pilot program. The Community Development and Recreation Departments indicated that they are most anxious to begin participation in the program as many of their customers request to use credit cards for payment. While not all City departments will be participating in the pilot program, there will be consistency of credit card acceptance within City Hall for customers. ■ Recommendation The Task Force concluded that establishing a credit card pilot program is relatively easy and inexpensive. Based upon comments from other City departments, it appears that some customers have requested credit card payment availability, and as such, this pilot program will provide the City an opportunity to respond to citizen's requests. Implementation of Pilot Program It is envisioned that this program would be implemented during the same time period as the water service pilot program (April 6 - September 30, 1992). No additional staffing will be needed to carry out the pilot credit card program. In-house training sessions on equipment usage and procedural issues will be held prior to implementation of the program. The program will be formally reviewed at the end of the six month period and a recommendation will be presented for Council's consideration. Why Are We Recommending Pilot Programs? Based on feedback from our customers, we believe that these two program changes will significantly improve service to our customers. However, we will not know what the costs and benefits of making these changes will be until we try them. At the end of the trial period, we will return to Council with a formal evaluation of the pilot program results, including any. costs associated with continuing them on an ongoing basis. �l������'��Ieill!IIIIII� Ildlll city of San LUIS OBISpo 001,01 COUNCIL AGENDA REPORT FISCAL IMPACT If the pilot program to eliminate the refundable deposit requirement and allow water service to be initiated or discontinued by telephone is approved, the total cost of implementation and operation during the six month period is estimated at $200. The total cost to implement and operate the credit card pilot program during the same period of time is estimated at $1,800 ($575 per department). Funding is available from ventures and contingencies for these two programs. ALTERNATIVES There are three basic alternatives available to Council: ■ Approve only the water service pilot program. Council could approve only the water service pilot program. However, establishing a program of accepting credit cards for payment of City services is in keeping with the ,City's objective to provide better customer service through streamlining procedures. The credit card pilot program is easy to implement, and is estimated to cost less than $300 per month to operate. Staff is optimistic that both pilot programs will meet Council customer service objectives. As such, staff does not recommend this alternative. ■ Approve only the credit card pilot program. Council could approve only the credit card pilot program. However, as discussed previously, approximately 25% of customer complaints received by the Finance Department concern the City's procedures for initiating and discontinuing water service and the $25 deposit requirement. Staff is optimistic that changing the City's procedures to eliminate the deposit requirement and allow water service to be initiated and discontinued over the phone will not only streamline procedures but %gill also be perceived as "user friendly" by our customers. As such, staff does not recommend this alternative. ■ Do not approve either of the pilot programs. Both pilot programs were developed in response to the City's customer services objectives for 1991-93. While both pilot programs are relatively easy and inexpensive to implement, they also address customer service issues which have been highlighted by citizens. Data from both pilot programs will be collected and presented to Council with recommendations for any ongoing procedural changes. Accordingly, staff does not recommend this alternative. SUMMARY The two pilot programs are experimental in nature and there are many unknowns. Success is not guaranteed. However, in keeping with.the City's program objective of "continuous improvement" in the area of customer services, staff is optimistic that these programs will contribute toward streamlining our existing procedures to make them more "user friendly". Staff will develop as much data as possible during the pilot period so the Council can thoroughly evaluate the programs at their conclusion. C-3-8 �,n�l�►►iivli011111��°j�iN�jl city O� San LUIS OBISPO Mi;% COUNCIL AGENDA REPORT Attachments 1. Ordinance revising requirements for initiating and discontinuing water service. 2. Resolution establishing revised reconnection fees and refundable deposit requirements. I C-3-� ORDINANCE NO. ]204 (1992 SERIES) AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO REPEALING CHAPTER 13.04.030, APPLICATION FOR WATER SERVICE FROM THE SAN LUIS OBISPO MUNICIPAL CODE AND ADDING CHAPTER 13.04.030, INITIATION AND DISCONTINUATION REQUIREMENTS FOR WATER SERVICE WITHIN THE CITY OF SAN LUIS OBISPO WHEREAS, the City Council has held a hearing to consider proposed changes to procedures for initiating and discontinuing water service in the City of San Luis Obispo; and, WHEREAS, the City Council has adopted improving customer services to be a key objective for 1991-93; and, WHEREAS, implementing streamlined water service request procedures will make them more user friendly and enable staff to be more responsive to customer questions and concerns; NOW THEREFORE BE IT ORDAINED by the City Council of the City of San Luis Obispo as follows: SECTION 1. Chapter 13.04, Section 13.04.030, New Application - Deposit required prior to initiation of service, is hereby deleted. 13.04.030 . 740 Each applicant fbi %%fttel- se,vice shall be reqtiired to sign an ppplication fonn provided by the afflitim division a, make application by lette, showing the date of applictALIU11, iocation of vieInises to be served, mailing address, date applicant desire$ seiviee, and SECTION 2. A new Chapter 13.04.030 is hereby added to read as follows: 13 D3fl ]nitiat►on and Discontinuation of;Waker Service :•.:•:.i:p.ASii:is is ii:!.ii,iii:Jiil:ii::.::!.iii::JiY.N'.i:.i:ii:!!...........,i: '::'i::ii:!n'...ii:ii'.::!.::!.ii i:(n:':.i'.Y::.i:.i:.i' A tach cus>a ner ether inttiattng ,or discontinuing water service shalt;he requir.le p:>ro , e;jnfoxinataop:accordng;to tbe gzocedureS.estabJtshed by,the.3irgctax.af Fiztance Il,appiicarits for service rn4y be required #o eposrt an amount established from time r::.Y::::::!!!: . .v::.v:.y.r.n. :.::: ::::::::::::::.�: .. J<4.. !:�.ii::is:'":::'iii:.::.i:i'i:...i'.i'::�.`:i."::...::.� ...::..:%.i::::::...i::.`:nY.::..':}. . :Q tuna by resoluttori'of the council prior to initiation or restoration of water service; 0-1204 INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at its meeting held on the 18th day of February, 1992, on motion of Councilwoman Rappa seconded by Councilman Reiss and on the following roll call vote: AYES: Councilmembers Pinard, Rappa, Reiss, Roalman and Mayor Dunin NOES: None ABSENT: None MAYOR RON DUNIN ATTEST: CITY CLERK PAM VOGES APPROVED: CXR 1 City dmini rative Officer a ! i Att r Director of Finance Director of Utilities J RESOLUTION NO. 7080 (1992 SERIES) AMENDING RESOLUTION NO. 6447, TO ESTABLISH A RECONNECTION FEE AND REFUNDABLE DEPOSIT REQUIREMENTS WHEREAS, Chapter 13.04.030 of the City of San Luis Obispo Municipal Code provides that a deposit may be required prior to initiating water service and. allows such deposit to be established by resolution; and WHEREAS, Ordinance No. 1204 was introduced to print at the public hearing held on this matter on February 18, 1992; and public notice was provided ten (10) days prior to the public hearing; and NOW, THEREFORE, the City Council of the City of San Luis Obispo finds and resolves that: A. A service restoration fee in the amount of $40.00 shall be established. B. A refundable deposit shall be established for all accounts whose water has been disconnected due to non-payment in the following amounts: Unit Type/Meter Size Service Units Refundable Deposit All Residential Units 1.00 $ 90.00 1" Meter 2.00 $ 180.00 1 1/2" Meter 4.00 $ 360.00 2" Meter 6.40 $ 576.00 3" Meter 14.00 $1,260.00 4" Meter 22.00 $1,980.00 6" Meter 45.00 $4,050.00 C-3- a R-7080 Upon motion of Comcilwoman Eopseconded by Cm=i1nm Reiss and on the following roll call vote: AYES: CL=ilmembers Pinard, Rappa, Reiss, Roal= and Mayor Amin NOES: rime ABSENT: None the foregoing resolution is effective April. 6,: 1992. Mayor Ron Dunin ATTEST: Pam Voges, City Clerk APPROVED: 4VU49i 75L- City Adr'm'nistratTve Offi er Director of Finance ' i Att me Director of Utilities C- 3- � 3