HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/19/2020 - FIRST READING OF ORDINANCE NO. 076, 2020, APPROPRIAgenda Item 21
Item # 21 Page 1
AGENDA ITEM SUMMARY May 19, 2020
City Council
STAFF
Lisa Rosintoski, Utilities Deputy Director, Customer Connections
Cyril Vidergar, Legal
SUBJECT
First Reading of Ordinance No. 076, 2020, Appropriating Prior Year Reserves in the Light and Power Fund, the
Water Fund, the Wastewater Fund, and the Stormwater Fund, and Authorizing the Transfer of Previously
Appropriated Funds in the Broadband Fund for the Utilities Customer Information and Billing System Project.
EXECUTIVE SUMMARY
This item has been postponed to June 2.
This item meets the following COVID-19 emergency priorities for being on the Council agenda:
Priority 6 - Items that relate to funding, operation and business activities that the City must continue despite
of the current crisis
The purpose of this item is to appropriate an additional $950,000 to purchase a Customer Information System
with an Operational Support System (CIS/OSS) for electric, water, wastewater, stormwater and broadband billing
services, replacing the legacy 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 $212 million in annual total revenue through an average of 84,400 monthly utility bills and service requests
for residential and commercial customers.
The City signed a Master Professional Services Agreement (MPSA) and Software License Agreement with Open
International LLC (Open) in August 2018 to implement Open SmartFlex (OSF). The CIS/OSS will be the system
interface customers rely on for accurate utility and broadband billing that includes a robust customer self-service
web-portal interface for utility and broadband services that will assist customers towards understanding utility
usage and costs in order to make energy and water conservation/efficiency investments, as well as Connexion
product offerings.
Multiple factors have led to the extension of Utilities Go-Live from June 2020 to October 2020, and the additional
cost of $3.3 million in order to complete the project. Therefore, Open and City of Fort Collins Utilities negotiated
a cost-share distribution of the $3.3 million, recognizing the partnership and long-term relationship needed for
OSF as follows:
City of Fort Collins Utilities incurs 55%, for a total of $1.7 million.
Open incurs 45%, for a total of $1.4 million.
City of Fort Collins Utilities reimburses additional contingency/living expenses, estimated up to $200,000.
Utilities and Connexion will split the City of Fort Collins Utilities share ($1.9 million), thus totaling $950,000 each
for Connexion and the four utilities. Connexion has appropriated funding within the Connexion project. This
funding request will be shared across the four utilities.
Agenda Item 21
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Staff recognizes there is a potential for future risks, primarily related to employee turnover and illness, due to the
pandemic environment that continues into the foreseeable future. As such, there is a risk to meeting the October
5th Utilities Go-Live date. Therefore, staff is working with the vendor to develop mitigating actions that will
minimize vendor resource costs on the project in order to eliminate and/or reduce those costs if there needs to
be an extension of the project.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The City of Fort Collins Utilities signed a Master Professional Services Agreement (MPSA) and Software License
Agreement with Open International LLC (Open) in August 2018 to implement Open SmartFlex (OSF). The
CIS/OSS will be the system interface customers rely on for accurate utility and broadband billing that includes a
robust customer self-service web-portal interface for utility and broadband services that will assist customers
towards understanding utility usage and costs in order to make energy and water conservation/efficiency
investments, as well as FC Connexion product offerings.
Initially in 2018, functional and technical resources were divided in parallel paths to complete work on OSF
implementation for both broadband and utilities. The original project timeline put the FC Connexion go-live date
in June 2019 and the other four utilities going live in October 2019. However, it was determined in March 2019
that all Utilities resources needed to be focused on broadband to meet an August 30, 2019 go-live date, which
simultaneously pushed back the Utilities go-live date to around June 2020.
Several factors subsequently led to the project taking longer and costing more than originally anticipated,
including the following:
1. Aggressive Timeline - The Open contract timeline had FC Connexion going live August 2019 followed by
Utilities three months later. Time to mobilize the team and the complexity of configuring a system for a
business that was new and undefined made the 12-month plan unrealistic in hindsight.
2. Project Management - Initial project management was insufficient.
3. Maturity of Connexion Business Model - Related to the aggressive timeline, new processes and products
plus the decision to add video to the product offering required significant time and rework as the processes
and product configuration were developed.
4. Software was less mature than anticipated to meet the needs of the North American marketplace. -
After 20 years of the City operating on the Banner system with dozens of home-grown system developments,
additional time was needed by Open to fully engineer and develop the functionality needed by Utilities.
On August 30, 2019, residential Broadband internet and phone services were launched. However, Utilities and
FC Connexion resources needed further configuration and testing across the remaining FC Connexion product
offerings, thus, Utilities resources continued to be focused on the FC Connexion production environment within
the CIS/OSF project.
Utilities formally re-launched the Utilities phase of the billing system project on September 24, 2019. Resources
from Utilities were not generally available until December 2019, following significant transitions in project
management both on the Utilities side and the Open side, including replacement of the Open Project Manager.
In December 2019, the Utilities Project Manager transitioned to an external contractor, Vanir, as well. Vanir
thereafter assessed the CIS/OSS project and determined the project should be managed in industry accepted
environments as follows:
Broadband Production, since broadband was no longer a project;
Utilities Billing phase of the Project, completing MPSA obligations;
Banner Legacy System ongoing support with the same Information Technology resources.
Agenda Item 21
Item # 21 Page 3
The transition to the production and project platforms was completed in January 2020.
The Utilities Project Manager performed a thorough analysis with the Open Project Manager regarding costs
Open itemized, and the project plan for an extended Utilities Go-Live date. The analysis determined the optimal
Utilities Go-Live date could be achieved on October 5, 2020 with additional resources.
Alternatives to additional funding are limited and unattractive. Without additional funding the project cannot be
completed as designed and Utilities may be left with a non-functioning billing system. Both Open and the City
share responsibility for the issues driving the added cost. Accordingly, staff negotiated a cost split of 55% for the
City and 45% for Open, which equitably reflects each party’s commitment to the success of the new Utilities
billing system in support of the four utility services and broadband product offerings.
CITY FINANCIAL IMPACTS
This Ordinance will appropriate $950,000 from Utility Enterprise Reserves for the completion of the new billing
system implementation. In addition to these funds, the amount of $950,000 will be transferred from unexpended
FC Connexion appropriations to increase the project budget by $1,900,000, bringing the total contribution from
FC Connexion to $1,899,000. The total expected cost of this investment is $11,446,001.
The following is a summary of the project funding:
These additional appropriations from the available reserves in each of these Enterprise Funds is not expected
to delay any significant capital work to the extent that there will be an impact to the level of service being provided
to the community.
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 the customer service counter. Themes on the feedback include:
Prior Appropriated Funds
Light & Power $3,314,506
Water $2,226,934
Wastewater $1,605,464
Stormwater $1,450,097
Broadband $1,899,000
Total Prior Appropriation $10,496,001
Funds to be Appropriated with
this Ordinance
Light & Power $366,265
Water $246,084
Wastewater $177,410
Stormwater $160,241
Broadband $0
Total Funds to be Appropriated per
this Action $950,000
Total Current Project Budget $11,446,001
Agenda Item 21
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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 online services
provide towards exceptional customer service. Below are the 2018 ratings, to which the target is 80%, for both
residential and commercial customers.
Fort Collins Utilities customers were asked to rate performance on each of the following:
“Information and tools provided to help you manage your use and costs.” Satisfaction ratings were 66% for
residential and 69% for commercial.
“Technology tools, similar to those used by banks, cell phone or cable companies.” Satisfaction ratings were
62% for residential and 77% for commercial.
“Convenience of bill payment options, including in-person locations and online.” Satisfaction ratings were
89% for residential and 90% for commercial.
“Online security provided to protect your personal and financial data.” Satisfaction ratings were 81% for
residential and 88% for commercial.
ATTACHMENTS
1. Utilites Presentation (PDF)
11
Utilities Customer Information/
Operational Support Billing Systems
2 2
Strategic Alignment
• Ensuring
predictable rates
• Deploy and deliver
high-speed internet
services
Customer
Information /
Operational
Support Billing
Systems
• Enhance service
delivery through
technology
• Drive reliability,
costs, efficiency
and customer
experience
• World-class
municipal
services Economic Health
High-Performing
Government
Why A New Billing System?
3
Current system: ~20
years old, uses “home-
grown” integrations.
11
Customers asking for
features not possible
with legacy system.
Best practice to have
one system manage
five utilities.
Connexion requires
functionality current
system can’t support.
TOTAL
COST
$9.6M
TOTAL
COST
$9.6M
22
33
44
4
Original Timeline
Vendor /
City Team
Launched
Training /
Testing
2018 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019
Data Migration /
Integration / Configuration
Integration /
Configuration
Training /
Testing
Broadband Utilities
Go Live /
Stabilization
Go Live /
Stabilization
5
Project Schedule Impacts
Risk
Aggressive Timeline Given Project Complexity
• Under-estimated time to ramp up and manage two
diverse project teams
• Under-estimated learning and training time to manage
configuration of new system
Project Management Not Initially Effective
• Vendor project manager turnover October 2019
• City project manager turnover December 2019 and
March 2020
6
Project Schedule Impacts
Risk
Maturity of Connexion Business Model
• New business with new processes and products to be
defined. Addition of video product offering.
• Significant rework as things were defined and changed.
• Aligning broadband regulatory requirements as part of
billing system in compliance with legal.
Software was less mature than anticipated
and required for North American marketplace
7
Revised Timeline & Cost
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Broadband
limited products
launched
2020
Utilities Go-live
Utilities configuration / integration / migration & stabilization
BB go-live
stabilization
2019
Broadband production environment – additional product offerings
• Broadband live August 2019 –
significant resource focus in 2019,
delaying Utilities efforts.
• Additional work required after August
on functionality.
• Utilities go-live Oct. 5, 2020.
• Additional 13 months and overall
cost impact of $3.1M plus $0.2M
contingency / living expenses.
8
Revised Cost Impacts
Total Project Impact: $3.3M
Cost Share Agreement
• Fort Collins Utilities: 55% ($1.7M)
•Open: 45% ($1.4M)
•City funds additional contingency /
living expenses: up to $200,000
Internal Cost Share
Connexion / Utilities split (50/50)
$
9
Uncertainty
Risk
Resources
• Employee turnover
• Pandemic impacts
10
Recommendation
Staff recommends
approval of Utilities
additional appropriation
of $950,000.
Broadband has
appropriation coverage
for their portion.
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ORDINANCE NO. 076, 2020
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE LIGHT AND POWER FUND, THE
WATER FUND, THE WASTEWATER FUND, AND THE STORMWATER FUND, AND
AUTHORIZING THE TRANSFER OF PREVIOUSLY APPROPRIATED FUNDS IN THE
BROADBAND FUND FOR THE UTILITIES CUSTOMER INFORMATION AND
BILLING SYSTEM PROJECT
WHEREAS, in August 2018, the City of Fort Collins signed a Master Professional
Services Agreement (MPSA) and Software License Agreement with Open International LLC
(“Open”) to develop and implement the Open SmartFlex (OSF) integrated utility customer
billing software system and web portal (“CIS/OSF project”); and
WHEREAS, contemporaneous with Open’s development, the City began building a city-
wide broadband utility system to deliver high-speed data, video, and telecommunication services,
as previously approved by City voters in general elections; and
WHEREAS, in late 2019, the City began offering city-wide broadband utility services,
branded as “Fort Collins Connexion”, and agreed with Open to adjust CIS/OSF project delivery
requirements to accommodate the functionality needed for Fort Collins Connexion services and
other unanticipated project requirements; and
WHEREAS, thereafter, the City and Open documented the adjusted CIS/OSF project
requirements and schedule in a change order to the MPSA, including updating contract pricing
and extending the final CIS/OSF project go-live date from June 2020 to October 2020 (the
“Change Order”); and
WHEREAS, the City and Open agreed to divide the CIS/OSF project costs described in
the Change Order, totaling $3,300,000, 55% and 45%, respectively; and
WHEREAS, Utility Services staff recommends allocation of the City’s portion of the
Change Order costs among the benefited utility enterprises, including appropriating the amount
of $950,000 from prior year reserves in the Light & Power Fund, Water Fund, Wastewater Fund,
and Stormwater Fund, as applicable, for expenditure from the Utilities Customer Information &
Billing System capital project fund; and
WHEREAS, the City Manager recommends the appropriation described herein and
determines that this appropriation is available and previously unappropriated from the Light &
Power Fund, Water Fund, Wastewater Fund, and Stormwater Fund, as applicable, and will not
cause the total amount appropriated in the Light & Power Fund, Water Fund, Wastewater Fund,
or Stormwater Fund, as applicable, to exceed the current estimate of actual and anticipated
revenues to be received in these funds during this fiscal year; and
WHEREAS, the City Manager further recommends the transfer of $950,000 from the
Fort Collins Connexion Fiber Feeder & Distribution Network capital account to the Utilities
Customer Information & Billing System capital project, with the purpose for which the
transferred funds are to be expended remaining unchanged; and
-2-
WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the
recommendation of the City Manager, 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, Article V, Section 10 of the City Charter authorizes the City Council, upon
recommendation by the City Manager, to transfer by ordinance any unexpended and
unencumbered appropriated amount or portion thereof from one fund or capital project to
another fund or capital project, provided that the purpose for which the transferred funds are to
be expended remains unchanged, the purpose for which the funds were initially appropriated no
longer exists, or the proposed transfer is from a fund or capital project in which the amount
appropriated exceeds the amount needed to accomplish the purpose specified in the appropriation
ordinance; and
WHEREAS, the proposed appropriation and transfer benefit the public’s health, safety
and welfare and serve utility rate payers by providing funding to timely complete integrated
billing system enhancements designed to automate billing processes, simplify customer bills, and
thereby increase collections and reduce billing operation expenses for all utility rate payers.
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 &
Power Fund the sum of THREE HUNDRED SIXTY-SIX THOUSAND TWO HUNDRED
SIXTY-FIVE DOLLARS ($366,265) for expenditure from the Light & Power Fund 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 TWO HUNDRED FORTY-SIX THOUSAND EIGHTY-FOUR DOLLARS
($246,084) for expenditure from the Water Fund 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 HUNDRED SEVENTY-SEVEN THOUSAND FOUR
HUNDRED TEN DOLLARS ($177,410) for expenditure from the Wastewater Fund for the
Utilities Customer Information & Billing System project.
Section 5 That there is hereby appropriated from prior year reserves in the
Stormwater Fund the sum of ONE HUNDRED SIXTY THOUSAND TWO HUNDRED
FORTY-ONE DOLLARS ($160,241) for expenditure from the Stormwater Fund for the Utilities
Customer Information & Billing System project.
Section 6. That the unexpended and unencumbered appropriated amount of NINE
HUNDRED FIFTY THOUSAND DOLLARS ($950,000) is hereby authorized for transfer from
-3-
the Fiber Feeder & Distribution Network capital account to the Utilities Customer Information &
Billing System capital project.
Introduced, considered favorably on first reading, and ordered published this 19th day of
May, A.D. 2020, and to be presented for final passage on the 2nd day of June, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 2nd day of June, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk