HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/10/2018 - FIRST READING OF ORDINANCE NO. 093, 2018, APPROPRIAgenda Item 1
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AGENDA ITEM SUMMARY July 10, 2018
City Council
STAFF
Mike Beckstead, Chief Financial Officer
Lisa Rosintoski, Utilities Customer Connections Manager
Dan Coldiron, Chief Information Officer
John Duval, Legal
SUBJECT
First Reading of Ordinance No. 093, 2018, Appropriating Prior Year Reserves in the Light and Power Fund, the
Water Funds, the Wastewater Fund and the Storm Drainage Fund for the Utilities Customer Information Billing
System Project.
EXECUTIVE SUMMARY
The purpose of this item is to appropriate $6,297,001 to purchase a Customer Information System with an
Operational Support System (CIS/OSS) for electric, water, wastewater, stormwater and broadband billing
services, replacing the 18-year old billing system. The CIS/OSS is the billing system that will collect revenues
for utility and broadband services, serving as the accounting ledger for Utilities revenue, which currently
generates over $200 million in annual total revenue through an average of 80,000 monthly utility bills and
service requests for residential and commercial customers.
The CIS/OSS will be the system interface customers rely on for accurate utility and broadband billing that
includes a robust customer self-service platform that will assist customers towards understanding interval utility
usage and costs in order to make energy and water conservation/efficiency investments.
Staff has completed the robust Request for Proposal (RFP) process for a comprehensive integrated CIS/OSS
solution and selected a vendor that will provide the solution with the following key technology deliverables:
• delivering timely and accurate customer utility and broadband bills
• providing customer web-portal interfaces for utility and broadband services
• maintaining accurate customer contact information
• processing customer payments and service requests
• supporting exceptional customer service experience through on-line services
• increasing operational efficiency with advanced metering infrastructure
• providing enhanced rate, product, payment and service offerings
• automating Broadband service provisioning; and
• including mobile workforce management functionality to enhance field services
STAFF RECOMMENDATION
Staff recommends adoption of this Ordinance on First Reading.
BACKGROUND / DISCUSSION
Utilities implemented the “Banner” customer information billing system in 2000, and managed an upgrade to
version 4.1 in 2009. In early 2016, Utilities evaluated whether to upgrade the existing billing system or
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purchase a new system, i.e. replacement. The comprehensive evaluation assessed the functionality,
resources, costs, risks, and value of upgrading or replacing the then 16-year old system. The evaluation also
drilled into the specifics of Utilities' business needs, technical requirements, customer service expectations,
and integration with the advanced metering infrastructure. The determination was the system is antiquated in
both functionality and technology, and replacement of the system was necessary. The evaluation included an
estimate to replace the billing system platform of $6.6 to $10.1 million.
In 2016, as part of the Budget for Outcomes process, a capital improvement project enhancement offer was
submitted (Offer 7.24) for $6.8 million. While the full 2016 estimated cost of $6.8 million to replace the billing
system platform was approved in the biannual budget, the offer was approved based on a phased timeline with
approximately one-third of the project cost being appropriated in 2018, a total of $2.3 million.
Beginning in the fourth quarter of 2017, Utilities began developing a rigorous request for proposal (RFP)
process to procure a comprehensive and integrated billing solution for both utility and broadband billing
services. The RFP focused on seeking a comprehensive and integrated solution that will function as the
accounting software for utility revenues, as well as provide new functionality, tools and processes resulting in
increased employee productivity and efficiency in supporting the customer experience.
Specifics of the proposed solution identified: Customer Information, Billing, Broadband Operational Support,
Customer Self Service, and Reporting. In addition, the solution should consider Mobile Workforce
Management, and meet multiple utility and broadband business needs, accommodate both regulatory and
ancillary service requirements, as well as provide a wide array of customer-facing opportunities, and greatly
enhanced functionality to Fort Collins customers.
The process was completed in January 2018, and an RFP was released in February 2018. Staff completed
the review of the vendor proposals, including vendor demonstrations, and selected its preferred vendor. Staff
has completed the successful negotiations with the vendor and is prepared to complete the contractual
arrangements. In addition, staff has completed the review of the costs associated with the information
technology hardware, licensing, data conversion, and project implementation staffing that will be necessary for
the successful deployment of the CIS/OSS capital project.
Key features of the CIS/OSS billing system are:
• Billing and operations functionality for new broadband services (Internet, video and phone) as well as
state-of-the-art billing and operations for four existing utility services (electric, water, wastewater and
stormwater).
• Comprehensive, real-time customer web self-service capability with single-sign-on functionality for all
customer classes (residential, commercial and industrial). This capability would include starting,
stopping or modifying services; viewing and paying bills; viewing account status, usage and cost
information; participating in programs, services and promotions; and scheduling appointments.
• Configurable, well-documented functionality with logical and flexible user interface. Includes a
scheduler that is configurable, well documented, flexible and easy to use, including the ability to
perform multi-processing and to receive calculated inputs and external data.
• Clear and robust technology road map with regular improvements and support for functionality, fixes,
tools and security.
• Streamlined, configurable workflows that increase employee efficiency and bill accuracy, and require
few manual processes to complete routine functions.
• Service Oriented Architecture capability which would allow for seamless integrations with other
technology systems. System consumes and exposes services.
• Strong easily configured and tailorable system security features, including role-based access and
cybersecurity.
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• Vendor management of version control and component compatibility, as well as accessible, skilled and
reasonably priced vendor support and product warranty from selection through implementation and
post go-live.
• Stable technology stack with good data integrity and transactional boundaries to roll back processes
easily if necessary.
• Ability to manage complex rates, such as net metering, time-of-use, time-of-use tiered or on-bill
financing.
• Clear and transparent audit functionality for financial and other transactions and configuration to
comply with legal and regulatory requirements.
• Library of standard and user-generated reports, including financials (A/R, balancing, write-offs, etc.),
customer transactions (service orders, delinquency, payment types, etc.), key performance indicators
and exceptions.
• Ability to interface/integrate with Broadband network electronics in order to provide automated
provisioning (turn up, turn down, suspension, etc.) of Internet data, phone, and video services.
• Mobile work management for handling service orders in the field.
• Configurable bill format and design with customer features such as metered utility use and graphs.
CITY FINANCIAL IMPACTS
This appropriation is being requested from available Reserves in each Enterprise Fund. Because $2.3 million
was previously appropriated in the 2017-18 budget cycle and the broadband appropriation has already been
made, it is only necessary to appropriate $6,297,001 to fully fund the purchase and implementation of the new
billing system.
($ 000's) Current
Estimate
w/ BB
Light &
Power Water
Waste
Water
Storm
Water Broadband
Total Cost $546 9,$315 3,$227 2,$605 1,$450 1,$ 949
Less Prior Appropriations $249 3,811 637 507 345 949
$297 6,$504 2,$590 1,$098 1,$105 1,$ -
Each of the utility Enterprise Funds currently have reserves available above and beyond the minimum required
reserves and those reserves already appropriated for other capital improvements. This appropriation is
allocated between the utilities as follows:
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Utility
Available Fund
Balances
Appropriation
Request
Remaining
Available
Reserves
Electric $5.5 $2.5 $3.0
Water $22.1 $1.6 $20.5
Wastewater $20.0 $1.1 $18.9
Stormwater $7.5 $1.1 $6.4
These shares have been determined based on the current customer counts of the existing utilities and an
estimate of the expected number of broadband customers at build-out, and to this has been applied an
allocation factor based on the complexity of the billing. The billings for the Electric Utility are the most complex
and the billings for the Stormwater Utility and future broadband customers are the least complex.
BOARD / COMMISSION RECOMMENDATION
Utilities staff presented to both Energy and Water Board the annual customer satisfaction survey in April 2018.
Included in the presentation was an update on the CIS capital project enhancement offer, to include broadband
billing services. In addition, Utilities staff highlighted the key features customers have expressed through the
customer satisfaction survey related to utility billing and service offerings, such as on-line and web-portal.
(Attachment 1)
PUBLIC OUTREACH
Utilities regularly captures customer preferences for utility bill enhancements, as well as additional service
features both on the utility bill, web-portal, and on-line. Customer feedback is captured through telephone
interactions, electronic mail, and in-person at customer service counter. Themes on the feedback include:
near real-time payment application, easy access and visual display of use, and useful bill data.
The annual statistically valid customer satisfaction survey recognizes the importance the billing system and on-
line services provide towards exceptional customer service. Below are the 2017 ratings, to which the target is
80%, for both residential and commercial customers.
Please rate Fort Collins Utilities for their performance on each of the following:
• “information and tools provided to help you manage your use and costs.” The satisfaction ratings
for residents was 73% and commercial was 69%.
• “technology tools, similar to those used by banks, cell phone or cable companies.” The satisfaction
ratings for residents was 67% and commercial was 64%.
• “convenience of bill payment options, including in-person locations and online.” The satisfaction
ratings for residents was 81% and commercial was 82%.
• “Online security provided to protect your personal and financial data.” The satisfaction ratings for
both residents and commercial was 77%.”
ATTACHMENTS
1. Energy Board minutes, April 19, 2018 (PDF)
2. Powerpoint presentation (PDF)
Energy Board Minutes
April 19, 2018
Energy Board Minutes
April 19, 2018
Utility, the first influx of cash was $81,000. There is not an estimate for annual percentage. Other funds
for the Payment Assistance Fund are donations or matching dollars from established partnerships.
Mr. Michell wanted to keep focus that the end means of the IQAP is to enable households to reduce their
consumption and not just for assistance. Ms. Rosintoski said that audits are not required at this point, but
as the program begins there will be a better understanding of the facilities that low-income customers are
staying in, whether they are an owner or renter, and the condition the facilities are in. The Utility can
promote audits through existing state programs. Payment Assistance Fund will be phased in for three
years.
Board Member Baumgarn is concerned about the customer experience. Just because someone needs
assistance with a lower utility cost does not mean they have all the opportunities to make the adjustments
accordingly. Mr. Baumgarn stressed that with a co-benefit goal of reducing consumption, which may or
may not happen for various reasons, it is important to not turn around and be punitive. Mr. Baumgarn
does not want customers to feel singled out or put through a process just because they are low-income.
Mr. Baumgarn is uncomfortable with the idea of customers not receiving assistance because they fail to
meet the performance measures put upon them. Mr. Bovee said there are going to be strings attached to
any income qualified assistance program. It is critical to keep the strings attached, so they reach the goals
or at least show an effort at conservation, that will hopefully ultimately lower the customer’s bill. Mr.
Iengo said the goal is to reach a process that is reasonable to the customer, while also meeting the
conservation need.
Utilities Customer Satisfaction Survey
Lucas Mouttet, Customer Accounts Manager
Matt Weyer, Customer Accounts Analyst
(attachments available upon request)
Lucas Mouttet walked through the 2017 Customer Satisfaction Survey results. The survey was
undertaken during October of 2017 to early November of 2017. There was a total of 600 residential
responses, 200 commercial responses, and 13 key account responses. Mr. Mouttet started by showing
national satisfaction survey trends. Residential satisfaction is on rise due to pricing and perceived quality
to customers. Commercial satisfaction is also on rise due to payment options and communications from
the utilities. Water quality is a big focus for customers and utilities. It was found frequent communication
and good conservation programs help to increases satisfaction. The most important factors for all
customers were quality and reliability, it then varies based on residential versus commercial customers.
Mr. Mouttet shared the Fort Collins Community Survey results which show benchmarkable data to
national and Front Range utilities. Customer satisfaction has remained stable for the past 10 years, with a
5 percent increase from 2016 to 2017. A main reason for the satisfaction increase between 2016 and 2017
was due to controlling cost and value services. Other reasons included availability of efficiency programs,
environmental stewardship, and infrastructure security. Mr. Mouttet went into further detail of service
area ratings; he noted there may be an education gap on survey questions in which customers answered as
neutral (i.e. storm water related). Mr. Mouttet sees this as an indicator that the Utility needs to do more to
help customers understand. Mr. Mouttet noted there is a larger percentage of discontent found when
looking at price satisfaction. The Utility is working on tying information from the customer satisfaction
survey to metrics for utilities. For example, Mr. Mouttet showed a graph correlation of survey results for
timeliness satisfaction and the Customer Average Interruption Duration Index (CAIDI). There was not as
much of a correlation found when looking at power quality satisfaction and Momentary Average
Interruption Frequency Index (MAIFI). This could be due to many different variables. Mr. McCollough
added that the Utility does have power quality and power transient issues and there is work being done to
ATTACHMENT 1
Energy Board Minutes
April 19, 2018
Energy Board Minutes
April 19, 2018
fix the index and data around large commercial and residential impacts. Residents were presented
questions on TOD rates and whether they would support being charged more for energy use during peak
periods of the day, when it costs more to generate energy. Over a third of customers agreed with TOD
rates, a quarter did not agree, and the remainder were neutral. Mr. Mouttet shared that the survey found
that renters are generally more interested than owners in conservation programs. Renters are also more
worried about accuracy of bills and quality customer service. Owners are more likely to contact the City,
pay for preventative maintenance, and support TOD rate structure.
Mr. Michell asked Mr. Mouttet what he may expect to happen to customer satisfaction when TOD is
rolled out. Mr. Mouttet said he believes it will impact the overall customer satisfaction, but it will level
out in a couple years. Mr. Mouttet thinks it is important to reach out to the community to provide them
with information in a timely way. Mr. McCollough added that when it came to the pilot program, across
the board there was a 2.5 percent reduction in energy use. If customers are cost cautious they should see a
reduction in cost, so it could have a positive impact on customer satisfaction. Mr. Michell wondered how
much of the public used the Utility web portal. Ms. Rosintoski replied there may be a population of
12,000 customers that use it or have accessed it, but only around 2,000 use it on a regular basis.
Adjournment
The Water Board meeting adjourned at 7:48 p.m.
Budgeting for Outcomes (BFO) Draft Offers
Tim McCollough, Light and Power Operations Manager
Brian Tholl, Energy Services Supervisor
(attachments available upon request)
Mr. McCollough mentioned there are several offers going into the draft budget, and he wanted to
highlight that the presentation is only in the draft stage as it is being refined. There are other initiatives
across the City that may be jointly funded and be added to Light & Power (L&P) fund, coming from the
same pool of revenues that these offers are anticipated to hit. L&P does have an obligation to submit final
offers by Wednesday April 25, 2018.
Mr. Becker commented on the amount of various substation projects proposed (i.e. adding feeder to an
existing conduit, re-conduit, and re-trenching, etc.). Several budget offers show that since feeders are at
95 percent or 100 percent, loading on the hottest day, caused Mr. Becker to wonder if any alternative
projects, such as battery storage projects, energy efficiency projects, and demand response projects had
been considered. Mr. McCollough replied that the short answer is yes; there are opportunities for both
short-term and long-term to replace certain aspects of electric capacity with the mentioned type of
distributed resources. Battery storage or solar, for example, can have beneficial impact on feeders. Mr.
McCollough does not see in the short-term, or at least the current budget cycle, there being a replacement
for that capacity. On a long-term scale, as storage becomes more affordable and adopted more frequently,
along with programs and systems in place that asset can be used to reliably shave peak events.
Mr. Becker expressed concern that L&P is blindly following the “utility path” by adding conduit, versus
addressing the issue at hand. Mr. Becker believes it becomes a circular argument between not needing
demand response at early stages but then having to reverse steps in the future, and stated that the circular
logic gets locked in place with such a presented budget. Mr. McCollough said he understood the
feedback, but pointed out that copper in the ground is also one of the items that allows L&P to host
additional distributive resources. The ability to place a large solar insulation or a large battery storage
insulation, if it becomes a grid asset, must be connected by copper. Board Member Becker mentioned the
Brooklyn/Queen’s project, a massive infrastructure project that was avoided through storage efficiency
11
Utility Billing System
Mike Beckstead, Chief Financial Officer
July 10, 2018
ATTACHMENT 2
2
History/Background
• Current utility billing system is 18
years old – last major upgrade
was 2009
• 2016 BFO included proposal to
replace billing system for four
existing utilities
• Cost estimate: $6.6M - $10.1M
• Budgeted $2.3M in 2018,
anticipated remainder in
2019/20 BFO process
• With Broadband – comprehensive
system explored for all five utilities
• Identified system that meets needs of
all utilities
• Timing to support broadband requires
acceleration of remainder of utility
funding
• Discussed with Council Finance in
April 2018
3
System Functionality
• Comprehensive system for all
five utilities
• Strong system and cyber security
• Robust Web self-service capability
• State-of-the-art technology with
innovative road map
• Configurable workflows for
operational efficiency
• Mobile workforce management
• Handles complex rates
• Configurable bill format
Drop in a picture
4
System Cost Allocation
Allocation based on # of accounts serviced and billing complexity
5
Timeline
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Vendor &
City Team
Launched
2019
Utilities
Training
& Testing
Utilities Go Live
Utilities Data Migration/Integration/Configuration & Stabilization
BB Integration & Configuration
BB Training
& Testing
BB Go Live
Stabilization
6
Council
Questions
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ORDINANCE NO. 093, 2018
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE LIGHT AND
POWER FUND, THE WATER FUNDS, THE WASTEWATER FUND
AND THE STORM DRAINAGE FUND FOR THE UTILITIES
CUSTOMER INFORMATION BILLING SYSTEM PROJECT
WHEREAS, the purpose of this item is to appropriate $6,297,001 to purchase a Customer
Information System with an Operational Support System for electric, water, wastewater,
stormwater and broadband billing services to replace the current 18-year old billing system
(“Customer Information Billing System Project”); and
WHEREAS, the Customer Information Billing System Project will allow the efficient
collection of revenues for all utility and broadband services, serving as the accounting ledger for
the revenue of these utilities, which currently generate over $200 million in total annual revenue
through an average of 80,000 monthly utility bills and service requests for residential and
commercial customers; and
WHEREAS, the initial cost of the Customer Information Billing System Project being
appropriated in this Ordinance is being shared by the funds of the City’s existing utilities
(Electric, Water, Wastewater and Stormwater) and by the City’s future broadband system to be
operated within the Electric Utility; and
WHEREAS, these shares have been determined based on the current customer counts of
the existing utilities and an estimate of the expected number of broadband customers at build-
out, and to this has been applied an allocation factor based on the complexity of the billing, with
billings for the Electric Utility being the most complex and the billings for the Stormwater
Utility and future broadband customers being the least complex; and
WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the
City Manager’s recommendation, to appropriate by ordinance at any time during the fiscal year
such funds for expenditure as may be available from reserves accumulated in prior years,
notwithstanding that such reserves were not previously appropriated; and
WHEREAS, the City Manager has recommended the appropriation described herein and
determined that these appropriations are available and previously unappropriated from the Light
and Power Fund, the Water Fund, the Wastewater Fund and the Storm Drainage Fund, as
applicable, and will not cause the total amount appropriated in Light and Power Fund, the Water
Fund, the Wastewater Fund and the Storm Drainage Fund, as applicable, to exceed the current
estimate of actual and anticipated revenues to be received in these funds during the fiscal year;
and
WHEREAS, these project funds are ineligible for a contribution to art in public places as
provided in Article XII of City Code Chapter 23 because this is not an appropriation for a
“construction project” as defined in Article XII; and
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WHEREAS, this appropriation benefits the health, safety and welfare of the public and
the ratepayers of Fort Collins and serves the utility purposes of improving water and electric
service reliability and controlling cost of service increases.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated from prior year reserves in the Light and
Power Fund the sum of TWO MILLION FIVE HUNDRED THREE THOUSAND SIX
HUNDRED SIXTY-SIX DOLLARS ($2,503,666) for the Utilities Customer Information Billing
System Project.
Section 3. That there is hereby appropriated from prior year reserves in the Water
Fund the sum of ONE MILLION FIVE HUNDRED NINETY THOUSAND TWO HUNDRED
NINETY-SIX DOLLARS ($1,590,296) for the Utilities Customer Information Billing System
Project.
Section 4. That there is hereby appropriated from prior year reserves in the
Wastewater Fund the sum of ONE MILLION NINETY-EIGHT THOUSAND FOUR
HUNDRED FORTY-ONE DOLLARS ($1,098,441) for the Utilities Customer Information
Billing System Project.
Section 5. That there is hereby appropriated from prior year reserves in the Storm
Drainage Fund the sum of ONE MILLION ONE HUNDRED FOUR THOUSAND FIVE
HUNDRED NINETY-EIGHT DOLLARS ($1,104,598) for the Utilities Customer Information
Billing System Project.
Introduced, considered favorably on first reading, and ordered published this 10th day of
July A.D. 2018, and to be presented for final passage on the 17th day of July, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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Passed and adopted on final reading on the 17th day of July, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk