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0 is ANALYSIS As part of the recently completed utility rate structure study, we identified certain cosi sociated with � the the entire Utility Billing pry amok in total to $477,588. Further analysis annual costs to the Department relating to the printing and mailing processes amounts to approximately $121,567 based on 23,357 pieces of mad per month (See attached itemization ExhM A). We then spoke with our current service provider for meter reading, Avatar .Utility Services, who indicated that the cost to provide printing and mailing services to the Department would range from $0.42 to $0.45 per piece. There was the option to piggyback the Okaloosa County contract with Avatar at $0.428 per piece (Exhibit B). The City of Vero Beach recently contracted with National Business Products to provide the same uft billing services. The Department contacted the City to dune the level of service requested and the level of satisfaction with the firm. The City has been contracting it's billing services for three (3) months, but indicated they were very satisfied. We also contacted Indian River Memorial Hospital who has been contracting their billing services with the some firm for more than one year and they also indicated that they were very satisfied Fran Powell, Director of Purchasing for Indian River County indicated that the prospects of piggybacking the City of Vero Beach's contract for billing services were good. Director Powell indicated that all of the County's guidelines would be met and piggybacking was a definite option We then proceeded with detailed discussions with National Business Products on our requirements and they offered the opportunity for the Department to piggyback the City's contract of $0.41 per piece (Exhibit C). The savings to the' Department of using the $0.41 per piece price would be approximately $6,651 (23,357 x $0.41x 12 = $114,916; $121,567-$114,916—$6,651). In addition to the financial savings, there are other benefits to the Department an4 the County to be derived by contracting the utility billing services. Furst, it would allow the Department to surplus its mail processing machinery and reduce inventory of paper and envelopes, thereby enabling the Department to vacate the 224 square feet of mail room space currently occupied. This space could then be used more efficiently. Secondly, the ability to free up a customer service representative of approximately 6 hours/ week operating the machinery allows more time to be devoted to the customer and a reduced burden on the remaining rimes. Another benefit is the reduction in additional postage costs. Currently when a bill is mailed and the customer's address has changed the Post Office will not forward the piece without charging again for the postage. National Business Products has access to the Postal Service National Change of Address database and can reprint the correct address on the outgoing mail before it is dehveted to the Post Office. They then will issue a report informing us of all address -changes. We have also calculated the effect of this reduction in costs on the billing charge that was approved as part of the recently completed rate study. The new billing charge of $1.29/account will be elfective on Catober 1, 1999. Exhibit D illustrates the effect on this calculated charge using the parameters in the rate model. the net effect is a $0.02 reduction. This negligible effect can be accounted for by rounding in the rate model itself ALTERNATIVES: Option 1: Continue with the Department of Utility Services performing the Utility Billing function Option 2: Contract with National Business Products for the Utility Billing Services and piggyback their contract with the City of Vero Beach at the $0.41 per piece price and reduce the billing charge by $0.02 per account. Option 3: Contract with National Business Products for the Utility Billing Services and piggyback their contract with the City of Vero Beach at the $0.41 per piece price and keep the billing charge at a $1.29/account. AUGUST 17,1999 81 BOOK jig F�iG�