HomeMy WebLinkAbout2012-02-01 PACKET 04.F.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 2/112012
Finance
ORIGINATING DEPARTMENT
Robin Roland
COUNCIL ACTION REQUEST
Consider authorizing staff to utilize lockbox processing services for utility payments through
Opus 21.
STAFF RECOMMENDATION
Authorize staff to utilize the services.
SUPPORTING DOCUMENTS
® MEMO /LETTER: Memo from Robin Roland.
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
® OTHER: Proposal Comparison Spreadsheet.
ADMINISTRATORS COMMENTS
City Adyhinistrator / Date
COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
Document3
City of Cottage Grove
® Finance Department
TO: Honorable Mayor and City Council
Ryan Schroeder, City Administrator
FROM: Robin Roland, Finance Director
DATE: January 13, 2012
SUBJECT: Consider Lockbox Options for receipt of Utility bill payments
Introduction
Staff has reviewed options for receipt of utility bill payments given staffing levels and internal
control issues.
Discussion
Currently, all utility billing payments (checks and remittance stubs) are processed through the
Finance Department. The cost of this processing including staff time, benefits, and banking
charges is $1,662 per month. This process includes the manual totaling of all checks and the
deposit of the funds in the bank along with the separate entry of all the remittance stubs into
the utility billing system to update each account. At the due date of the bills, due to the volume
of mail, payments may sit for a couple days before they are tallied and deposited into the bank.
Use of a Iockbox system is available through Opus 21 (the City's Utility billing subcontractor)
and /or through US Bank. Under this scenario, utility payments (checks and remittance stubs)
would be mailed to an offsite PO Box where the checks would be processed and deposited,
and a file of the payments would be generated and uploaded to the utility billing system
automatically. This option would reduce the potential for delayed deposits of funds and assure
timely posting of payments to all accounts.
Depending on which Iockbox option is chosen, the estimated monthly cost ranges from $1,800
to $4,675 per month. A detailed chart of the proposals is included with this memo. The $1,800
option with Opus 21 is the one staff would recommend at this time. Although it is slightly more
expensive than current monthly costs, it provides for greater internal control and better, more
efficient use of staff time on finance based activities.
We continue to encourage e- billing and direct payment of bills (ACH). A significant number of
residents are using that service as well as payments through "bill pay" banking services;
currently 35% of our customers pay by these two methods. We are also looking at
implementing the acceptance of credit cards for payment of utility bills in the near future. As
each of these payment methods increases in popularity, the need for mailed remittance
Honorable Mayor, City Council, and Ryan Schroeder
Page 2 of 2
decreases. Staff estimates that eventually the processing cost of this lockbox service would
be reduced by half.
Requested Action
Approval of change to lockbox processing services through Opus 21 as outlined.
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