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HomeMy WebLinkAbout11/10/1992, C-11 - CUSTOMER SERVICE PILOT PROGRAMS �I�IH���III�IIIIIIIIII�IIIII`I1�/ (� MEETING DATE: ►��i��� UI c�y,' of san _ ��s osispo - °- COUNCIL AGENDA REPORT ITEM NUMBER: / FROM: William C. Statler, Director of FinanceL. Prepared by: Linda Asprion, Revenue Manager;•i SUBJECT: CUSTOMER SERVICE PILOT PROGRAMS CAO RECOMMENDATION 1. Approve on-going implementation of the water service program allowing customers to initiate or discontinue water service by telephone and eliminating the $25 refundable deposit. 2. Extend the credit card pilot program in the Recreation Department for an additional six months, December 1, 1992 through May 31, 1993, and expand the program to include acceptance of credit card payments over the telephone. 3. Discontinue the acceptance of credit cards at the other pilot program locations (Finance and Community Development). 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 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 improvements in the area of customer services. To facilitate this process, 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. From this training came staff suggestions and research on two particular areas where we could strealine our procedures and be responsive to the customers needs. On February 18, 1992, Council approved two pilot programs to become effective on April 6, 1992 and to continue for six months. These two pilot programs are: ■ 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. �������►�►�►i�illllflll� q��lll city of San t s OBISPO COUNCIL AGENDA REPORT Results of Pilot Programs Pilot Program #1: Water Service by Telephone and Eliminating Refundable Deposits During the six month pilot program,the Finance Department processed approximately 4,000 requests to initiate and discontinue water service. Each customer requesting this service received a post card to evaluate not only the phone services but also the service they requested. The response has been tremendously positive. We have received a 99% positive j response from over 550 evaluations. Customers truly like the concept of not having to drive downtown and come into City Hall to sign-up for service and pay a $25 refundable deposit. Most vocal in these positive comments have been the property management companies and landlords, who can just phone for service and not have to provide the refundable deposit ! everytime the tenant changes at a property site. Additionally, the traditional long lines at the cashier counter during Cal Poly's June departure and September return did not occur. With fewer customers at the cashier counter, the Finance Department has realigned our workload to cover the phone service without additional staffing. Some of the original concerns regarding the implementation of the program were the possibilities that some individuals would 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". We have not had one incident of this occuring during the pilot program. An additional concern was whether eliminating the $25 refundable deposit would financially impact the City if a customer left with an outstanding balance. Once again, this has not proven to be a concern. Under the Resolution approved by Council to initiate the pilot program, a $90 refundable deposit for residential customers (the refundable deposit for I businesses is based upon meter size) is charged only when a customer has their water shut- off for nonpayment, along with a $40 reconnection/service charge. The $90 refundable deposit is returned after one year of good credit history or on a closed account. This refundable deposit has proven to be a more realistic amount in protecting the City from financial loss from outstanding balances. The costs associated with this program are essentially one-time purchases of a computer and a printer. These purchases were made to implement the pilot program. As previously mentioned, the Finance Department has realigned our workloads to cover the extra phone service. Accordingly, with the positive feed-back and results from the pilot program, we recommend implementing this service on an ongoing basis. �i1�61►�►►I(�IIIIIIIIP° 9�UI�I city o f san " is mispo iis COUNCIL AGENDA REPORT Pilot Piogrmn #2 Acceptance of Credit Cards During the six months of accepting credit cards for City charges, the Community Development, Finance, and Recreation Departments completed 49 transactions for an average amount of $131.00. Each customer using a credit card was requested to complete a short evaluation. While the evaluations were all positive, credit card use has not been extensive. Each department involved in the credit card pilot program has offered the following comments: I ■ The Community Development Department has performed the fewest transactions and indicates that most of their customers prefer to pay fees by a check from their business account rather than have the charges on a personal credit card. Therefore, there is insufficient justification for continuing to offer the availability of payment by credit card in this Department. i ■ Originally the Finance Department thought that customers would use credit cards to pay past due utility bills rather than go through the shut-off procedures. However, this has not been the case. Most customers having their water shut-off due to non- payment either do not have credit cards or the credit on the cards has already been maximized. Most credit card payments received through Finance have been for Business Tax or miscellaneous charges. Therefore, there is insufficient justification for continuing to offer the availability of payment by credit cards in this Department. ■ Approximately 60% of the credit card transactions occured in the Recreation Department. Customers liked the convenience of paying for services such as trips and monthly charges for child care by credit card, and several have requested the ability to pay charges by credit card over the telephone. Recreation is supportive of continuing to accept credit card payments and would like to extend the service by accepting credit card payments over the telephone. Staff anticipates a marked reduction in foot traffic at the counter if the telephone service is offered. I An additional consideration in continuing the program is the cost of the credit card service. The cost associated with each credit card location is approximately $35 per month for the phone line and rental of equipment. Based upon the number of credit card transactions occuring in the Community Development Development during the six month pilot program, each transaction cost the City approximately $52. Although the Finance Department did have more transactions the cost to the City remained very high at approximately $14 per transaction. The cost is reduced significantly in the Recreation Department due to the higher usage but still cost the City approximately $7 per transaction. Based upon the customer response and the high transaction cost in the Community Development and Finance Departments, it is recommended that the credit card program be discontinued within City Hall at these two locations. However, based upon the customer 21Ulh city of sant s oBispo maills COUNCIL AGENDA REPORT response in the Recreation Department and the potential for a more cost effective and customer oriented program, which includes the ability to charge over the telephone, it is recommended that the pilot program be extended for another six months in the Recreation Department and that the program be expanded to include acceptance of credit card payments over the telephone. The potential liability for accepting telephone credit card payments is minimally higher than requiring the customer to personally sign the charge advice. In discussions with our bank, they related extremely few liability or loss situations occuring from telephone transactions. The same safeguards are in place by receiving an authorization code approving the transaction whether the customer is on the telephone or at the counter. i CONCURRENCES i The Departments of Finance, Community Development, and Recreation concur with the recommended actions. Accordingly, it is recommended that Council approve extending the pilot credit card program for an additional six months (December 1, 1992 through May 31, 1993) within the Recreation Department and that the pilot program be expanded to accept credit card payments over the telephone. It is further recommended that credit card payments at the I two locations at City Hall be discontinued. FISCAL IMPACT There is no additional cost associated with permanently implementing the telephone water service program. The cost of extending the credit card pilot program in the Recreation Department will be approximately $210 ($35 per month), plus the 3% bank charge for processing the payment. Funding is available from ventures and contingencies for this program. I ALTERNATIVES i There are three basic alternatives available to Council: Discontinue the water service program. Council could discontinue the telephone water service program and require all customers initiating or discontinuing water service to physically come into City Hall. However,based upon the outstanding positive response from customers, this alternative is not recommended. Continue the credit card program in the Community Development, Finance, and Recreation Departments. Council could extend the pilot program in all three departments with or without the addition of accepting credit card payments over the telephone. However, based upon the initial customer response, the cost of each transaction to the City, and staff feedback, this alternative is not recommended. ��►►►����IIifI►Ililfllll I�' ��UIU city of San ' s OBISPO COUNCIL AGENDA REPORT Not Approve the continuation and expansion of credit card service within the Recreation Department. Council could discontinue credit card services, including acceptance of payment over the telephone, for an additional six month pilot program in Recreation. However, customers have requested the expansion of the credit card service to include telephone acceptance, and Recreation staff believes there is a definite benefit to the department if the pilot program is successful. As such, this alternative is not recommended. i SUMMARY I When the two pilot programs were originally brought before Council in February 1992, it was clear that the programs were experimental in nature and that success was not guaranteed. However, in keeping with the City's- program objective of "continuous improvement" in the area of customer services, staff proceeded with Council direction to implement the pilot programs. The water service program has been tremendously successful. It has streamlined the prior procedures and made the process more "user friendly" for our customers. The credit card program has not proven to be as well received and needs another opportunity as an extended pilot program in the Recreation Department. Once again, the success of this extended pilot program cannot be predicted, but staff will continue to obtain as much data as possible during the next six months so that Council can thoroughly evaluate the the program at its conclusion. i I I