HomeMy WebLinkAboutl- 4 Agreement to Provide Utility billing Service ",„ The Cityfo Azusa i 1.
AZUSA
LIGHT & W A T E R
For Quality of Life
AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OFAJTILITIES
VIA: RICK COLE, CITY MANAGER G
DATE: MARCH 29, 1999
RE: 1. AGREEMENT TO PROVIDE UTILITY BILLING SERVICE TO THE
CITY OF COLTON.
2. EMPLOYMENT CONTRACT WITH KEVIN MORNINGSTAR.
Recommendations: Approve the Customer Information Services Agreement between the City of
Azusa and the City of Colton; and approve the Agreement for Contract Employee Services
between the City of Azusa and Mr. Kevin Morningstar. Copies of both documents are attached.
Background: As part of this Department's business strategies, we continue to look for ways to
improve the efficiency of the utility operations and to maximize the value of our resources we
have. The Department has provided power management services to the Cities of Banning and
Colton before, and continues to provide Scheduling Coordination Services to the City of
Banning. The Department is partnering with the City of Covina to share staff to manage solid
waste issues for the City. The items proposed in this agenda follow the same strategy which is to
provide additional value to the City of Azusa.
As you may recall, over a dozen of California municipal utilities formed a working group in
1997 to explore the availability of a utility billing system that can meet the demand of
deregulated utility billing requirements. After about one year's concentrated effort by the group,
the findings were quite discouraging in that there were not any readily available software
solution that could meet the specifications the group had compiled and any new development
will cost over$1 million each. Through the process we did learn that Azusa's existing billing
software actually already has much of the functionalities that the group had specified. Based on
that finding, I came to City Council in 1998 for your approval to invest about $80,000 to upgrade
our hardware to enable us to revise the existing software with additional functionalities as well as
for Y2K compliance.
Recognizing the capability of our billing software, many participants in the group, Colton,
Glendale, Burbank, and Pasadena, did show some interest to either subscribe billing service from
us or buy into our software. Discussion failed due to the limited staff we have. City of Colton
then entered into a contract with a software development company. However, as of last fall,
Colton's contractor failed to deliver work products on schedule and later completely defaulted on
its contract. That brought Colton to us seeking assistance from Azusa for its billing services.
729 N. Azusa Avenue P.O. Box 9500 Azusa, California 91702
626/812-5208 (phone) 626/334-3163 (fax) utilities@azusa.ca.gov (e-mail)
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Pg. 2: Agenda—Customer Information Services Agreement with the City of Colton
Staff from both cities have met several times to work out the principles of the agreement as well
as a cost sharing structure. The principles of the agreement are:
1. Term of the agreement is ten(10)years with a provision that either party can
cancel the agreement after the fourth year with one-year prior notice.
2. Colton to pay Azusa on installments the investment Azusa has made in
developing the utility billing software to the current version.
3. Colton to reimburse Azusa all labor costs, and associated fringe benefit costs and
overhead during the implementation phase.
4. Colton to share equally with Azusa the on-going maintenance and support costs
which include labor and associated fringe benefits, license fees, out-of-pocket
expenses, and overhead.
5. Colton to upgrade the necessary hardware to Azusa's billing system.
Second item in implementing this service agreement with the City of Colton is to change my
software personnel to contract employee status. There are two reasons for this proposed
arrangement: (1) By entering into an employment contract the City of Azusa will have the
assurance that Azusa can provide the professional staff to implement and maintain the service
agreement with the City of Colton at least during the first five years; and(2) To allow both cities
to establish required tasks and performance guidelines, and to evaluate the employee
accordingly. There will be penalty provisions for either the City or the contract employee to
terminate the employment contract before the 5`h year of the service agreement with the City of
Colton. Of course,there is a provision in the employment contract to terminate for cause.
Fiscal Impacts: From the above principles Colton will reimburse Azusa approximately $100,000
per year in on-going costs including employee salaries and benefits,hardware and software
maintenance and license fees; and $36,000 per year for our billing software development cost
recovery. General Fund will receive 75% of the overhead and general administration that the
City of Colton will be charged based on the direct employee costs. The estimated amount is
$14,290 the first year.
Attachments
Cost Spreadsheet for Colton Revised: April 1,1999-2:30pm
MUIS Direct/Required: $123,284 Azusa investment costs reimbursed by Colton.
MUIS Indirect Costs: $85,504 Investment costs paid directly by Colton to vendors.
TAX/Contengency $31,318 (15%=8.75 tax+cost adjustments)
TOTAL START UP $240,106
MUIS Cost Recovery $150,326 Azusa staff costs billed to Colton.
Direct Maintenance(Yearly) $24,000 Azusa costs billed to Colton at 50/50 split.
Indirect Maintenance(Yearly) $11,705 Maintenance Costs handled directly by Colton.
TOTAL YEARLY MAINT. $186,031
'All figures are estimates based upon current understandings and information from vendors.
Colton's Colton's
Upgrade Yearly
Location Qty Description Costs Support Purpose
Costs
Azusa
Data Center 1 HP 3000 939KS(Upgrade from 968) $76,100 $9,500 First 12 months of support is included as warranty in purchase price.
1 Cisco 2600 WAN Router $5,000 $250 Router to connect the Azusa and Colton LANs.
1 T1 Connection to Colton (GTE Estimated) $405 $6,000 Physical data connection;T1 @ 768 CIR. (3 Year Cont.)
1 Cognos-PowerHouse License Upgrade $47,184 $8,400 EXISTING-License Fee to activate software on 939.
1 Bradmark-DBGeneral Upgrade $0 $1,350 EXISTING-License Fee upgrade will be free.
1 RS Tech-Formation Upgrade $0 $750 EXISTING-License Fee upgrade will be free.
1 Lund-Defrag X Upgrade $0 $4,000 EXISTING-License Fee upgrade will be free.
Staff Salaries Utility Info Systems Manager(Contract Employee) $40,000 50%Time-Regular Operations Post Implementation.
Computer Operator $6,863 20%Time-Regular Operations Post Implementation.
Programmer Analyst $18,842 40%Time-Regular Operations Post Implementation.
Subtotal of Employee Wages $65,705
Employee Fringe Benefit Costs $29,567 (45%of Subtotal of Employee Wages)
Azusa Staff Expense $95,272 Regular Operations Post Implementation Reimbursed to Azusa.
Administrative&General $19,054 (20%of Subtotal of Azusa Staff Expense.)
Software Services $36,000 Cost recovery for Azusa's development costs over the past 5 years.
Colton
Finance Director 1 T1 Connection to Azusa (PacificBell Estimated) $1,010 $675 Physical data connection;T1 @ 768 CIR. (3 Year Cont.)
Wire Closet Hardware 1 Cisco 2600 WAN Router $5,000 $250 Router to connect the Azusa and Colton LANs.
1 HP Switch 4000M $2,156 $0 Cust Svc/Finance high speed connectivity to LAN.
Data Center 2 Hewlett Packard 8100N(Unit Price:$2690) $5,380 Optional Main Utility Bill Printer(Optional: Azusa could print bills.)
1 3000 Sheet Feeder Optional with 8100N.
1 Tapestry Integration Conversant Application $10,000 $0 (4 to 5 weeks install) Professional speech will be recorded.
Customer Service 10 Dell Pentium III/450(Unit Price:$1606) $16,060 $0 3 year onsite maintenance included from Dell.
7 ViewSonic PS775(17".25mm)(Unit Price:$425) $2,975 $0 No Maintenance Costs.
4 ViewSonic VP150(15"LCD)(Unit Price:$895) $3,580 $0 No Maintenance Costs.
10 IBM Trackpoint III Keyboards(Unit Price:$125) $1,250 $0 No Maintenance Costs.
2 HP LaserJet 4000n(Unit Price:$1392) $2,784 Optional 1 Printer for bill re-prints(Blue)and 1 Printer to print reports(white).
Elec Substation 1 Itron F83 and MVRS Software $27,679 $4,530 Replaces Logicon Meter Reader System&DOS software.
1 Dell Pentium III/450+ViewSonic PS 775 $2,225 $0 3 year maintenance included.