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HomeMy WebLinkAbout1701_001If I V"llage of ML.-.4nt Prospect Mount Prospect 111inolk < 1W INTEROFFICE MEMORANDUM TO: VILLAGE MANAGER TERRANCE L. BURGHARD FROM: TRUSTEE RALPH ARTHUR DATE: JANUARY 12, 1984 SUBJECT: CUSTOMER BUDGETING FOR WATER BILLS At Tuesday night's Committee of the 141iole meeting, d`Uring the discussion of water rates, I recomj7i�ended that a inonthly budgeting system, similar to NI GAS and Edison for payments, be initiated. I analyzed my past year's bill and then projected it for one year under the new rate., A bi-monthly projection was not possible because ofquarterly readi'11F �0 s However, similar fluctuations as observed between quarters would be present under bi-molithly billing &nd tliis prohibits budget planning for the citizens. Thebl"11., vi,nder a, monthly budget system is also sawn . wn in the followl*ng fi-gure,s: qLJAR,TER, GALLONS -1,000 QUARTERLY AT $1.53 QUARTERLY AT 8*)2.10 09/25-12/28 12/28-03/25 27$41.31 16 856.70 03/25-06/15 21 24.48 32.13 33.60 44.10 06/15-09/28 - 35 53-55 73.50 99 $151.47 $207.90 lo Under a monthly budget: $207.90 divi-ded by 12 - $17.33 per month I With, 'water rat,es scheduled, to rise over the years, I feel it s, imperative to less;e,%,n the 3.mpact on our citizens. At least *1 we mu,st, give, them the oj)port,,uT1'1 t y to lessen it. So man y of 6 # our cltiz,ens are ll-ving, on, a 'reduced fixed income. All our 'b-]Llls,, wh, the exception of water are on a monthly basi A is, Even bu�s ines,ses b �I'l.so monthly. Bi -monthly is a good ti e-, i, r 3,- p,��Iy I i irst stlep, but 1, feel certain, our citizens and businesses would, welcome a iix)nthlysyste ��'m with a voluntary budget option. I no you stated you would look into my recommendation. I would not expect this to be done until after the budget cycle a is completed. However, I am looking forward to the results of your research at the earliest possible date., RWA/rcw RALPH W. AR"I'l-iUR C: Mayor Carolyn H. Krause Board of Trustees Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: Terrance L. Burghard, Village Manager FROM: David C. Jepson, Finance Director t.:..��f�'� DATE; September 11, 1984 SUBJECT: Water Billing Cycles During the review of Water and Sewer Fund financing requirements at the January 10, 1984 Committee of the Whole meeting, a recommendation was made to change from a quarterly billing cycle to a bi-monthly cycle. The reasons for the change were to minimize the impact of future rate increases on Village residents' bills and to improve cash flow in the Water and Sewer Fund. The change in the billing procedure would be put into effect with the first billing in May, coinciding with a scheduled water rate increase, At that time, Trustee Arthur suggested that we go to a monthly billing cycle rather than a bi-monthly cycle. He pointed out that with higher rates ex- pected in future years due to the acquisition of Lake Michigan water, it would be easier for Village residents to pay a monthly bill as opposed to a bl*- monthly bill. Additionally, he mentioned that other utilities (gas, electric and telephone) are billed monthly and that it would be convenient for most Village residents to budget water bills on a monthly basis. Trustee Arthur subsequently presented a comparison of what his bills had been for' the past year using the then current rate of $1.53 per 1,000 gals, and what they would be under the May 1, 1984 rate Qf $2.10 per 1,,000 gals. He also computed an average monthly bill using the $2'.'10 rate, The analysis of his bills are shown in the following table: Trustee Arthur's water use is typical of many Village residents, and as can be seen from above, the monthly amount would be easier to budget than the quarterly amount,, Usage Quarterly Quarterly Monthly Quarter 1,000 qa1s. $1..53 @ $2.10 @ $2.10 1 16 $24.48 $33.60 $11.20 2 21 32.13 44.10 14,70 3 35 53,55 73-50 24*50 4 27 41,31 56,70 22,23 Trustee Arthur's water use is typical of many Village residents, and as can be seen from above, the monthly amount would be easier to budget than the quarterly amount,, Terrance L. Burghard, Village Manager Page 2 Water Billing Cycles We did consider a monthly billing cycle in place of a bi-monthly cycle, but it was apparent that the number of bills to be processed under a monthly,cycle would be excessive. The Village currently has 10,500 water accounts. Under a quarterly billing system thi's amounts to 42,000 bills and payments per year. The number increases to 63,000 per year under a bi-monthly cycle and to 126,0001 under a monthly cycle. Also, a monthly cycle would require significant changes in procedures for following-up on delinquent accounts. The initial time period allowed for paying a water bill under the quarterly cycle was 25 days. After this period, the following notices were sent if the bill had not beenpast due reminder, 2) final notice, and 3) certified shut-off letter. The total bng/follow-up process took approximately 90 days. Even with a change to a bi-monthly cycle, one of the follow-up notices would need to be eliminated. Because of the above factors it was determined that a bi-monthly cycle was mor practical at this time than a monthly cycle. However, as we were preparing fo the change to the bi ffimonthly cycle, we realized that even though we could not bill all accounts on a monthly basis, it would be a good time to change our larger users, primarily industrial and commercial accounts, to a monthly cycle Accordingly, we did change the 780 accounts in the Village with a meter size o ill or greater to a monthly billing cycle. I The conversion to the new system has been completed and all Village residents have now received at least two billings under the new system, There were some problems during the implementation period, but most of these have been resolved and it is expected that they will decrease in the future. The new system has improved cash flow in the Water Fund and has -also resulted in savings of postage and supplies as well. We were able to eliminate the meter read card that pre- viously had been mailed to residents by Includ'ing a place for the meter reald on the water bill itself. This change should r1edu'ce postage chairges in 1984/85 by 6217' was b,udgeteA for $46,400 in the approxima$15 tely ,000. [Account 41-072-07-, I ount] 1984/85 budget. As of August 31, $250 has bten expended in this atc We had mentioned to Trustee Arthur that after the change had been completed, we would review the possibility of monthly billing and report back to him. I believe Trustee Arthur is correct in stating that it would be easier for Village residents to budget and pay water bills on a monthly basis. However, I am reluctant to recommend a complete change to a monthly cycle at this time. The volume of bills and payments would double from what it has been under the bi- monthly cycle and follow-up procedures for delinquent accounts would have to be modified. I would prefer waiting until we have more experience with a bi- monthly cycle before changing all billings to a monthly cycle. Trustee Arthur also mentioned the possibility of an optional monthly budget pl an. I believe this could be accomplished by sending out a statement to custo- mers for 112 of their prior bi-monthly bill and applying the payment as a credit 0 against their next regular bi-monthly bill. This is similar to the method used by Northern Illinois Gas Co. In order to provide this option, we would send a Terrance L. Burghard, Village Manager Page 2 at Billing Cycles letter with a postage paid reply card to all residential customers explaining the program. If a resident chose to take advantage of this program, they would return the reply card to us and we would subsequently send a statement one month and a regular bi-monthly billing the next month. It would require some computer programming changes to implement the resl*dential optional payment plan, but I believe it could be worked out in the next 60-90 days', I think an optional payment plan is worth a try., Village of Mount Prospect Mount Prospect, Illinoi's V-1 F, INTEROFFICE MEMORANDUM TO Terrance L. Burghard,, Village Manager David C. Jepson, Finance Director October 5, 1984 SUBJECT.- Monthly Water Billing A change to a monthly water billing system would produce additional revenue in the Water Fund, but it also would result in added costs for postage and supplies, and for personal services. Additional revenue of an estimated $65,000 to $75,000 would be realized on a one-time basis because monthly billing would require an acceleration in billing certain accounts. The added costs would be the result of processing approximately 60,000 additional bills per year and would total about $15,000, The conversion to, a monthly billing system would necessitate billing an esti- mated 4,900 sin"gle family customers one month sooner than they are being billed under the b -i -monthly systeml., Based upon billing statistics for the past five ri'ionths, the accelerated bi 11 1wou'lld total 30,000 to 35,000 (1,000 gallons ou) and wld produce a one-time gain of $6,5,000 to $75,000-, Howe -ver, even though this is a one-time gain,,, if the at,,riount would be retained as work'l*ng capital, it could produce an additional $7,500 annually from investment income., Under the current W -monthly, cycle,, 'we are processi ng 63,000 bi 1 Is per year, A change to a monthly cycle, would add' approximately 60,000 bills for an annual total of 123,000. Annual' bill'ings of 000 represent an approximate growth Of 300% over our, previous, quarterly system and a 100% increase from the bi- 111onthl y increased costs of preparing and processing 60,000 addi- tional bills are outlined belowf: ___M Postage 60,000 @ $ 12 $7,5200 Supplies 610,000 @ $ .03 1,800 Personal Services 750 Hrs. @ $8.50 6,000 Total $15,0000 The above costs include only the direct costs associated withprocessing the additional bi 11 s, -and do not i ncl ude any- rel ated costs f or computer programmi ng or other-clerica I time for answering customer questions- or follow-up on delin- quent accounts. If a dec"I'si, on is ma,de, to change to, a nionthly billing system, we will need to re-evaluate our deTinquent follow-up procedures and make modifications to a e,,xisting compu,ter programs. I beli"eve, the necessary work and notices could be completed within 90 days and the, first illing could take place by February 1, 1,985 # a. g e. -f IN09 0 U rl t P r c3is e- c t Mount Prw,pect, I j I C�1 N, N "TE R 0 F F I!, A �N NJ . .... ... . . T A R D IA C '1" q �,, TE R I i I I -, r., C"\17 ( :1 1 f S A 1`4R F N Cl A MY "1'(') YOU CUSTMERS B ; 1) ( , rl., TT B ILLS DATED JANUARY 12, I I. N A N Cl1 0 j A MHJMORAI"�Tr) UM T 0 Y OU 'T 111 S A C'# I R e f c r, e n c A r e (.,, n,"I it i"i en d -1 (13 'L --we adopt a monthi�y 1A i n gr y' -s I.... e "ii for wat.et.-. ie statements I made in r e c mTTI C T1 (I a 1: 1, �T! W1,4 T. fee"] cer tain our .v. ,jot 'i monthly system w'th i -11-cl 't,,relconie bucl s Y `, L' 0 1 1 Reference B., you oridered t,--(') My ni e ri r �Ir T-1 t" I I I 1eaStr important p,c,lrt of C1- C (YrIjUl C, 1--j (I r t rl 0 w'l r) 't (-!, r t o 1) 11 d e t-- h e I I k e d t h e r e o Tmii e n d a t I'L it S 0 'D ri'ilicli, t -iat' y ol ti C ) 1-1 111. Y C" C C) TI) T 7X.ind(--a-'on I' asstime placed it e F f e C t f o r I n (I t'] S t -r J -1 1, n n d n ri-im f� r .j-(-T,Iind yoti i accounts I would -se j, thc ma.jori-ty of whom are o P C t mcwnted an expensive I obb OJI. y ing I IT) costs of Lake Michigan watier A; (1, on, I" "i,, e property taxes. H a d t h 1"' is v 711) 7 47) e im e r of our V" 1.1a 1. Ige I C' i Tldustrial/como merc* Y' S I? r n n IY ing of c () �,- wo (I I (I increa 'se to 126,000 a, 7 1 -11-1-1, That one of the reia,sions C'1e9'T' r 10 500 1-11"�l rillor equ" ipment 'tio 1, )a 1-1 C'11- e S t.1 C 11 P( ... `I `I... . w_'h d e u 11 Tiqent w,,i v s <1 C cc) I 1'11 L ey Tw miniri-ii-zed under a monthly v !:7) 1E, C" ITI Under the voluntary budget system you ordered tested, we would have not one system but three. That would"Just lead. to customer confus 'ion as well as process ing errors and added labor, 10 It 6 # This Subject requires aiscussion and a policy decision by the Board. I, therefo-re, have asked Mayor Krause, and she has agreed, that 'it be placed on the Agenda of our next Committee of the Whole meeting on Tuesday, October 9, 1984. am_ RWA/rcw c: Mayor Carolyn 11. Krause Board of Trustees Director of Finance David Jepson W, i ilflUr r G an� i Ir yr, t% MINUTE COMMITTEE OF THE WHOLE I. SEPTEMBER 11 1984 ROLL CALL i The meeting was called to order at 7 . 31 p.m. rea m at the meeting were. Mayor Carolyn _ Krause, Trustees Ralph Arthur, Gerald Farley, Leo Floros , Norma Murauskis George Van Deem and Theodore Wattenberg. Also present at the meeting were Village Manager Terrance Burghard Aaministrative Assistant to the Village Manager Michael Janon; s , Chief of Police Ronald,, P'vlock, Deputy Chief of r Salatino and Cable Coordinator Karen Guthrie Get . Three members of the Cable Commission were present as well as two persons from the print mei. a , a ��m piusimxrr , 41r�pgml-irf+,r J 10 j ne other verb successful crime prevention . program , 0� entit ed Neig borho d Watch. ' In this program, neighbor hood locks are organized to crime roof their and to report crime in their neighborhoods. Twelve neighborhoods have been organi, od and o er .% ,, under the gui ;dines of the Neighborh ; ' , tch Prog r . , . "hos nei orhoods who are succe p'� ' in or ani . i a Nei hbor - h 6 Watch Program are recog Jiz, by the � s't neighborhood watch signs in � � r nei hbo r'� d . i The overall response of VIL11a e Board to the report was positive and they o' ded the Police Departmentfor 'Its expertise and inln'OvAtion in the area of crime l prevent ion programs. V1. C AT IVE LOSS PREVENTION This mOtter added to t Cot= ittee of the Whole Agenda at t° . request or Trustee tte Board discussion cent d arourta wtiat progr is, o `ales and r'eulations, I cul ; e imp ented in an ffo , to reduce losses to the �...L .ge as a result of *insurance cla mlq ih%+ I j VIIIII.ANY OTHER BUSINESS 'here was no other business d * � cussed at the Committee f the Whole meetiong, I f Ix EXECUTIVE SES S ION At 9 -18 p.m. it was moved by Trustee Wattenberg Si seconded by Trustee Arthur that the Commitee of the oa� for th Of' �VTrust, 3- s cuss 44�g ex i s t, "" 1*1,ng l*t'gat*an i af f were Trustees ,,,A, thur''' F al",". Fl, Mur a��, ski- s ...+ V ..ia G e em n d W a t t,,; � � "" � , ",�r I i; IM e'M � Y� " carried unanimously. The Execut3*-V'e Session ended at 10:100 p.m. The Committee -of the Whole reconvened at 10-01 pm. with all members present.