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Home My WebLink About0116.091January 10, 1991 THE HONORABLE CITY COUNCIL Palo Alto, california Utilities Billing System Keabers of the Council: This is an informational staff report reqarding utilities Billing and does not require Counci,l action. Background ~ January 9, 1991 TIMES-TRIBUNE carried an articla headlining a billinq proble. in the City's Utilities. This staff report will disa~ss the history and events involved in the prOble~ in order to give council greater insiqht in the sltuation~ In summary, a number of out of the ordinary events occurred last year, as discussed. below, which created an unusual backlog of accounts requiring Investiqation~ analysis, and manual correction of bills. rh. total number of accounts requiring review is approximately 110 out of 2500 and not all are expected to have difficulties. piscusaion The City 'Was one ot the early pioneers in 1982 using hand-held computer devices in meter reading. The early units were successful and helped to improve speed and accuracy of reads, but were limited in their capacity to handle larger and ~ore complex metering such as Is nece&s~ry for commercial and industrial accounts with dual demand and energy meters. To provide the necessary capacity and replace a worn and outdated system, new hand-held equipment was purchased in 1989. Utilities staff proceeded at that peint to integrate the major accounts into the hand-held equipment andi routes. Of approximately 2500 such accounts, approximately 1000 CllRI1U,11 ". ,. , , o nave been inteqrated into the hand-held equipment to date I since the effort to accomplish the long delayed reconfiquration ot the Deter readinq routes had B hiqher priority and placed considerable demand on staff tf.me. The .. ter reading rerouting project vas impacted by tha need for coordination with a consultant and the staff of the Information Resources Department, who have programming and operational responsibilities for the Bil11n9 System. The princi~l delay was due to demands put on their time to modify the necessary programs to alloW' for Storm Orain Utility billing. As with any major sys:t.em change, the transition frcm one methodoloqy to another reGulted in ;s number of unanticipated. problelUS which added to those already taken into consideration. It was expected, a.nd necessary .. to expand meter reading billing cycles to more than the nominal 30 days during the transition; and the Utilities DepartlCent gave customers notice to that effect. In some cases changing a customer from one route to another .. auld result in having just missed a reqular billing date, and the tiae between billings woald encompass two months. OUr customers have been very understanding throughout the process even though they were inconvenienced. In t.he case of an electric demand meter (col!'>..mercial/industrial customers only), the development of the bill requires both a demand {kW} and energy (kWh) reading. If an event occurs (such as route relocation, met~r eXChange .. meter reading error, etc.) that delays the s.onthly calculation of the bill, it requires manual intervention to carry one month's data. into a two month bill. This normally occurs a tew times a month, but principally due to the impact on readinq schedules caused by the system rerouting, a backloq developed and billinq oversights have. occurred. The nature of these oversights is underbillinq to the customer. Staff normally identifies such problems by reviewing account rQcoras and edit files coming from the billing system. ""'hen a problem is identified the customer is notified and back-billed. If the billing causes the customer difficulties, we work with them to schedule payments over a period of time. With the difficulties arising' from the charlges we have initiated, there is a need to manu~lly review all of the 2500 accounts in the 900 series, with particular attention being paid to the first 1000 added to the hand-held system~ A quick review has identified approximately 110 a~~ts that need in-depth analysis and potentially could require bilck-billinq. It 1s possible that a customer's accounting department may find a prOble. in their billing and point it out to us in advance or our procedures detecting it. We treat these cases in the same manner as those we find .. working vith the custo.er to resolve questions CKltl116" 1 , . · : .. and assure that they are pa7ing only for vhat they qet and that the City doea not lose money. The Utiliti~s Department has hired a programming consultant to assist with the new ongoing: process. This bas ~.n successful to the extent that ve anticipat~ the level of -new. problem accounts w11l stay in the 2 to 3 per month. range. We are devoting extra effort to ~orkinq on the backlog and anticipate corrective action will be complete within the next two to three weeks. The Billing system presently in use has been developed internally and continuously modified and updated to meet the Utilities' needs. This billinq system has been called upon to support changes in rat.B~ rate design, and the way customers' consumption history is reported. It has been modified to notify customers of special circumstances, 'Water drouqht data, account condition (late, special charges, over payment, etc.) and rebates due to the customer. OVer the years the billing system has baen modified to handle major cbanges, such as the new Storm Drain util ity and the Utilities User's Tax. The billing system is called upon to bill over 1~5 million separate utilities charges in a year's time. The coordination Of all these activities has been handled to date, but further changes, and those such as the meter reading re-~ou~inq project emphasize the complexity end need to evaluate the present program and assure the City that we can appropriately handle the future. staff has proposed activities which are intended to either expand and restructure or t if necessary, replace the existing 5YStem. This was approved in the budget. vtilities~ Finance, and Info~ti~n Resources bave been workin9 together on the project since late 1989 and have essentially completed the needs assessment, incorporatinq those functions identified by the users that would be necessary to update the system. In addition, the City's auditors~ Coopers , Lybrand, are aware of our efforts to upqrade the billing system and concur that this projEct is an i1::lportant priority. The next step will be to follow with an evaluation of systems that meet the city1s requirements and return to Council w1th an appropriate proposal betore L'le end of this fiscal year. To put all of this in perspective, the only way to determine the total dollar impact of this program is to complete the account by accQunt analysis and total the results. Looking at the fiscal year fro. July through November of 1990, the Otilities Department projected Electric Sales Revenue at $Za~l million. Actual revenue was recorded at $27.9 million l ~hich was within a 1 percent margin of estimation. With t.~e various factors of the weather and economy being considered, this is an excellent record and further demonstrates our attention to customers and their internal budget needs. Because we recognize the effect of billing discrepancy on CKltIU',n o our cuatoaer.~ w. continue to observe our longstanding policy of working directly with them on un~sual back-billing problems. statf recognized early on the Inadequaci~s of the current system, 8oU9bt and r9ceived initlal budget authority from Council to revise the system and 1s tar along in that process. Additional re{",--OlIJIendatlona are proqrcmmed in the orderly course of subsequent budgets.. Extra effort is being devoted to the small number of customers who have experienced billing problems. Statf vill keep Council updated on efforts on this subject. Respectfully submitted, ~I ~·jf<-""7 RI CHARD L. YOUNG Director of utilities ClIOII 11'. t1