Utility Bills Printing & Mailing
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MEMORANDUM
March 30, 2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Printing and Mailing of Utility Bills
Finance Director Ken TeKippe is recommending the City discontinue the use of an
outside service for the printing and mailing of utility bills.
The current computer system upgrade provides the opportunity for this change over that
will help the City have more control over the process, including the accuracy. While
there is no cost savings, there is the possibility of future savings by combining other City
mailings with the utility bills to get a reduced postage rate on almost all City mailings,
based on the increased volume.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
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Memorandum
TO: Michael C. Van Milligen, City Manager
FROM:
Ken TeKippe, Finance Director
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SUBJECT: Printing and Mailing of Utility Bills
DATE:
March 29, 2005
INTRODUCTION
Effective July 1, 2003 the City of Dubuque entered into a mail processing agreement
with Mailing Services, Inc., a Cedar Rapids firm, to print and mail our monthly utility bills.
The two-year agreement expires June 30, 2005. The format of the bill changed and the
City provided a return envelope with the option of inserts, at the time outsourcing was
instituted.
DISCUSSION
During the current computer system upgrade, the leadership team of Dawn Lang,
Budget Director, Chris Kohlmann, Information Services Manager, Jean Nachtman,
Assistant Finance Director, Joe Pregler, Information Technology Specialist, Rick Till,
Accountant and I have discussed the potential of the City printing and mailing the utility
bills in-house. The recommendation of the group is to approve a 51 month lease with
Pitney Bowes. The items leased would include: a mailing system, high speed printer,
PB FIRST Forms Software, SmartMailer Software and a folding and inserting system.
The cost would also include the annual maintenance. Proposals were also received
from Advanced Business Systems and DocuChecks. We believe it is beneficial to
utilize one vendor for all issues relative to mailings. Advanced Business Systems and
DocuChecks do not provide a single vendor for the entire process.
Other benefits to bringing this service in-house would be the potential to eliminate
postage machines at other City locations. The local post office is very interested in the
City resuming the mailing since the counts are reflected in Dubuque Post Office totals
versus Cedar Rapids Post Office totals.
Potential postage savings will be investigated to utilize a 27.8~ mailing postage rate, for
other City mailings. Currently Accounts Payable issues approximately 300 checks per
week at the rate of 35.2~ postage per check. By aggregating daily mailings with other
City departments, we may be able to reduce postage expenses for a number of City
departments.
.
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The City Hall basement has been identified for storage of the equipment. The
approximate room size is 10' x 17' and is adjacent to the current smokers lounge. A
separate, private break area plus tables and vending area would remain. The cost to
renovate the area should not exceed $10,000 and would utilize the City Hall renovation
CIP.
There should be some savings on forms in Finance and Utility Billing due to form
standardization and utilization of PB FIRST Software. A combination of staff from
Information Services, Finance and Utility Billing will be utilized to handle printing and
mailing. A courier service firm will be considered to deliver mail to the post office annex
late in the day. A firm has been approved effective July 1,2005 for morning mail pick
up and delivery to City Hall.
The net annual budget impact is summarized as follows:
. Pitney Bowes Lease ($2,255 monthly)
. Courier service (deliver to post office)
. Savings on postage and meter rentals
. Savings on standardization of forms
. Bill from current outside vendor ($2,000 monthly)
Net projected annual budget impact
$ 27,060
2,500
(3,500)
(2,000)
(24.000)
$ (60)
ACTION REQUESTED
I am requesting approval to proceed with accepting the lease with Pitney Bowes and
bring the mailing of the Utility Bills in-house. We would like to notify our current provider
of the change in May. Since the Utility Billing upgrade is the final part of the computer
system upgrade, the mailings of the bills would probably begin this fall and we would
request the outside vendor continue mailing utility bills until the Utility Billing software
upgrade is complete, forms are designed and other aspects of the lease are finalized.
Thank you for your review and consideration.
KT/jg
cc: Dawn Lang, Budget Director
Chris Kohlmann, Information Services Manager
Jean Nachtman, Assistant Finance Director
Joe Pregler, Information Technology Specialist
Rick Till, Accountant