To: Mike Wildgen, City Manager
Debbie Van Saun, Assistant City Manager
Dave Corliss, Assistant City Manager
From: Ed Mullins, Finance Director
Date: May 3, 2004
Subject: 2005 Budget Proposal
The 2005 budget request for the Finance Department is attached. The department provides accounting, payroll, accounts payable, purchasing, investing, and utility billing services. Through utility billing, the Finance Department is often the only contact citizens have with the City of Lawrence. It is important that a good relationship be established by providing a high quality of service. The department provides billing services to over 29,000 utility customers, as well as miscellaneous billing for other city departments. Staffing to read the water meters and maintain residential water meters is included in the department. We will be implementing the utility billing on-line system this month. This will allow customers to view bills, monitor usage, and look up service histories for water, sanitary sewer, storm water and sanitation.
The department assists the City Commission in meeting its first two priorities, economic development and planned growth. The department is responsible for billing the amounts identified in payment in-lieu of taxes agreements with tax abatement recipients. The department manages the issuance of debt to fund infrastructure improvements that enable growth in Lawrence.
The department has implemented the Accorde software system for scanning invoices and related information. As a result, images of all invoices are available on-line and paper copies are no longer stored. This reduces retrieval time and the need for storage space. It is possible that a portion of this equipment may need to be replaced in 2005. Finance personnel process utility payments in-house instead of contracting it out. This has resulted in an annual savings of over $40,000 per year compared to using a lockbox service to process payments. Checks and payment stubs are imaged, allowing us to eliminate the storage of the stubs and provide faster retrieval of the information. It is also possible that a portion of this equipment will need replacing in 2005. Purchase requests are distributed over the Internet through a company called ONVIA. Vendors pay an annual fee to the company for the right to get notified of request for items and services they provide. The Purchasing Specialist is currently working with the County and School district to explore areas of joint purchasing, such as office supplies and natural gas.
The 2005 General Fund base budget continues the present level of services with no increase in funding, except for salaries. The General Fund includes training for the Director and Accountant and memberships to finance organizations. The replacements of four computers used by the accountant, purchasing specialist, director, and the scanning function are budgeted. The Water and Sewer Fund budget includes funds for receiving utility billing software and customer service training. Printing and mailing of utility bills by AB Data and the operation of the field service vehicles are included. Funds hire a temporary employee to replace water meters that are over their service life are requested in the temporary help account. The capital outlay request includes the replacement of one vehicle. Funds to continue the installation of radio transmit meters are also budgeted. A $65,000 transfer to the General Fund is provided in the request.
Program improvement issues for the Finance Department in 2005 are as follows:
1) Staffing – The Finance Department wrote off over $180,000 in utility bills from 2002. In order to reduce the amount of delinquent accounts, the division needs to be more aggressive in processing accounts for disconnection of service. It is recommended that a full time Field Service Representative be hired to process delinquent accounts and replace water meters that have exceeded their design life. The cost of the position can be partially offset by a $10,000 reduction in temporary help. The division currently hires a temporary employee to replace older meters.
2) Radio-transmit meters – To keep up with the increasing number of meters to be read, it is requested that a study be done to evaluate requiring new water meter installations be equipped with radio-transmit water meters. The department has installed 1000 radio-transmit meters that work satisfactorily. The $100 additional cost could be born by the developer of the property. It is estimated that there would be 300 new residential meters added per year and 30 commercial meters.
3) Payment Processing – The Finance Department would like to enable our utility customers to use the internet to make payments by transferring funds from their bank account to the City’s account on a demand basis. Customers currently have the ability to pay a service charge and make utility payments over the internet using their credit card. The City currently has over 1000 customers that access their account over the internet.
Legislative issues for the Finance Department have previously been provided to the City Commission. The list includes proposed changes to better balance customer service with existing staffing. The changes include eliminating non-emergency after hour service restores, clarifying winter quarter calculations, better identification of responsible parties, and increasing fees and deposits to more accurately reflect our costs of service.
Your approval of the program improvement packages and base budget is requested. The Finance Department is often the one and only contact citizens have with city staff. It is important that the interaction prove satisfactory to the customer. If you have any questions concerning items in the budget request, please contact me.