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HomeMy WebLinkAbout05 - Outsourcing of Bill Printing & Mailing FunctionCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 5 November 26, 2002 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Dennis Danner, Director, ext. 3123, ddanner @city.newport- beach.ca.us SUBJECT: Outsourcing of Bill Printing and Mailing Function ISSUE: The issue addressed by this report is whether the City should move forward with a plan to outsource the printing and mailing of most of its monthly billings. As originally envisioned and presented to the City Council in a Study Session, this project included a provision to automate the water meter reading function and move to monthly billing for water consumption. Based on additional information that has come to light, which was followed by City Council Finance Committee direction, that aspect of the proposal has now been postponed pending further analysis. A work- around system has been developed with Pentamation (the City's accounting and billing software vendor) that will enable us to proceed with the other aspects of the plan. RECOMMENDATION: Authorize the City Manager to approve a Professional Services Agreement between the City and Optimal Print Technologies, and direct staff to proceed with further consolidation of bills and other mailings into the Municipal Services Statement over the next several months. DISCUSSION: Bill Printing & Mailing. The outsourcing of the bill printing and mailing function was originally developed as the best solution to problems of aging, expensive equipment and a desire to avoid the cost of additional staffing. This solution not only addressed those problems, it also provided cost savings and a number of impressive service enhancements as well. These enhancements include: • Additional capability to combine /consolidate bills • Smart inserting and expanded insert capacity Outsourcing of Bill Printing and Mailing Function November 26, 2002 Page 2 • Electronic presentment of information — both billing information and inserts • Direct links to online bill paying and other City and related sites • Consolidated printing and mailing of flyers, notices, and other communications with residents • Speed A spreadsheet showing the projected net changes in relevant cash flows over a ten - year period is attached. The spreadsheet assumes that the City will move to consolidated monthly statements, by some means. If that is not done, the cost savings will not be as great, but it will still be positive. In the process of identifying the specific scope of work to be outsourced that best fits our needs, we contacted several vendors who specialize in this area. As our research progressed, we narrowed the number of firms with the best potential fit with our new business model to three. We requested and received specific proposals from each of these, then conducted one face -to -face interview and several telephonic follow -ups with each. Several staff members, representing the City's MIS, Revenue, Remittance Processing, and other functions participated in the interview and analysis process. Having tentatively selected the best one, based not as much on cost difference as on a good fit with our MIS operations, we also made a site visit to further ensure that there wasn't something we were overlooking. As a result of this process, staff members unanimously recommend to the City Council that Optimal Print Technologies of Phoenix, Arizona be selected to perform this work. Monthly Statement Consolidation. The basic concept is to send one consolidated monthly Municipal Services Statement to each customer. The statement would contain any billings due that month, as well as fliers and other information being distributed. Although we will not be able to fully consolidate every billing into one statement, the goal is to combine as many as possible. Over the past ten years, the City has done an extensive consolidation of bills. However, we have gone about as far as we can without further system changes. Our consolidation of other (non -bill) mailings, on the other hand, has been very limited. This is due primarily to the fact that water consumption bills, which are the mailings of widest distribution, only occur bi- monthly; and because the number of spaces available for inserts is very limited. There is always a backlog of flyers and other information to be included with water bills, and prioritization is problematic. With our existing equipment, there has also been the constraint that inserts had to go to everyone on the list, rather than being distributed selectively. As a result of these limitations, separate mailings to the same residents each month are common. We also sometimes (not often) end up sending a bill and a check to the same individual in close proximity to each other, since our Accounts Payable and Accounts Receivable systems are completely separate. Outsourcing of Bill Printing and Mailing Function November 26, 2002 Page 3 Technologically, the billing consolidation is not easy. There are a variety of separate databases in place for these various billings and receivables, and customers may be identified in each database differently. Various departments and staff members use each, and each is configured somewhat differently. For the first time, a recent MIS technique that establishes an overlay enabling cross - reference of these databases is now available. In addition to the databases themselves, various terms and procedures are different (due dates, late fees, normal billing dates, and so on). And after we get the "front end" consolidation problems resolved, we also need to ensure that when payments are subsequently received, appropriate amounts are properly posted and credited back to the separate ledgers for the individual services provided. In short, this is more of a challenge than one might expect, and it will not take place over night. However, we believe it is the right thing to do, for everyone concerned, in the long run. In looking for examples of other cities that have put such programs in place, we found none. There may be some, but what we ran into were other cities that would like to do this and are in the same position we are. Newport Beach is in the forefront in working toward development of these enhancements. Based on our projections, this aspect of the plan will save money as well as providing an enhanced service level. If the decision is made to outsource the billing function, the fully consolidated monthly statement, as well as combined mailings with fliers and other information, becomes possible. But implementation will be a gradual process. After the staff presentation on this subject at the Study Session, the item was referred to the City Council Finance Committee. With the additional information provided (copy of memo to the Finance Committee attached), they endorsed this proposal. Environmental Review: There is no environmental impact related to this action. Public Notice: Required notice is consistent with standard procedures for City Council Agenda Items. In addition, explanatory communication will be distributed to residents as changes are implemented. Funding Avai;ability: Over the long run, this is projected to be a modest money saving measure, so no long term additional funding will be required. Appropriate internal realignments of funds can be handled through the normal budget process. Outsourcing of Bill Printing and Mailing Function November 26, 2002 Page 4 The overall impact on cash flow is projected to be positive. Although there may be periods during initial implementation when additional start up or transition funding is required, no new funding authorization is requested at this time. If the interim amount ends up exceeding the level that can be handled within the City Manager's authority, staff will return to the City Council with a proposed Budget Amendment. Alternatives: The recommended action is to outsource most of the bill printing and mailing function, and to consolidate mailings to the maximum practical extent. Potential water meter automation and conversion to monthly billing for water consumption will be addressed later. Alternatives to this recommendation are to: 1) Do nothing. Continue to operate as we are and incur additional costs to replace aging printers and possibly additional staff. 2) Outsource the bill printing and mailing function only, but avoid further consolidation of mailings. 3) Hold off on any changes until the potential automation of the meter reading function can be included at the outset, rather than being addressed later. Prepared by: Richard C. Kurth, Deputy Director Submitted by: Dennis C. Danner, Director Attachments: Cash flow projection spreadsheet Professional Services Agreement (with exhibits) Additional information memo sent to the Finance Committee onpm mclo �nnoe O m OI � t0_ N 0 0 0 O1 001 O m N O O t0 m t7 NO N N !� N � C1 O OMN Mn O tp N (y� me pmo a oo moron r O 01 O n O M 0 tip O r � O tp O O O tp N O tp O N' 01 tp o OI N 0 01 pS.? «i« " W6% N O 0 N O W O O 9 N N N,� 00 nO,'O � 001 Otpp y�WC1O « 001 O M M M W W W W N ' MI 01INOn10 M�000M N0 00 O n �0 O O O O N N m N O 01 'O 01 01 y� m n N O 0 - - Q O n O m w m �nwn mm n O O N t7 O C1 N n n t0 t7 O y �O 01 01 N m t7 t7 f9 N n m n a ngiwmm °enn �mcni O t0 N N tp O N N N t0 N p p t0 01 n N O 0 t�0 M (O N N 10 O n C1 �O O O 01 � m 0 N �l tp t7 O N t7 OI OI O fV N °o ww °»�ww min pia ���(((ryryry0 01 p00 (0 010000 p�O W'0 �00�1 O t00 � g'IN�py Nta�m O Wf9 pM MKS M� Np O'00 n 0010000 Q N 01 O N N �O N po pO NOO p 0N N 0 0 Nf9N W N IA�O� 01 W W WW ddff N N O L O'vicc G 32 W W > - m._ mmy.� ''c E'aLLS s z w aS a v mr✓, m u?a aoO x =a ESQ a`m m3 E N � LL O ¢ E c? y yNj U iy m c? o C Z p. L_ w O F O Ua° `O �Wma y A c E G 00 `m O � O � m w � W � a y a O x o o a a m PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT, entered into this first day of December, 2002, by and between the City of Newport Beach (City), a municipal corporation, Optimal Print Technologies, LLC ( "OPT ") a Limited Liability Corporation whose address is 4029 Westerly Place, Suite 113, Newport Beach, CA 92660, Standard Printing Company, an Arizona Subchapter S Corporation ( "SPC "), is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. Consultant is a Limited Liability Corporation. B. The City is planning to implement an outsourcing program for the printing, mailing and electronic presentment of its municipal water services billing OPT and SPC (hereinafter, collectively referred to as, "Consultant' statements. C. The City desires to engage OPT and SPC (hereinafter, collectively referred to as, "Consultant' to provide such services upon the terms and conditions contained in this OPT and SPC (hereinafter, collectively referred to as, "Consultant' Agreement. D. The principal members representing Consultant, are for purpose of this project, Jeff Hart for OPT and Dan Stenson for SPC. E. The City has solicited and received a proposal from Consultant, has reviewed and evaluated the expertise of Consultant, and desires to contract with Consultant under the terms of conditions provided in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: 1. TERM The term of this Agreement shall commence on the first day of December 2002, and shall terminate on the last day of December 2005, unless terminated earlier as set forth herein. 1 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the duties set forth in the scope of services, attached hereto as Exhibit "A ", "B" and "C" attached hereto and incorporated herein by reference. 3. COMPENSATION TO CONSULTANT City shall pay Consultant for the services in accordance with the provisions of this Section and the scheduled billing rates, attached hereto as Exhibit "B" and incorporated herein by reference. No rate changes shall be made during the term of this Agreement without prior written approval of City. 3.1 Consultant shall maintain accounting records of its billings which include itemized list detailing verified and non - verified addresses indicating number of bills mailed and USPS postage reports detailing accurate postage expenditures. 3.2Consultant shall submit a single invoice monthly to City payable by City within thirty (30) days of receipt of invoice subject to the approval of City. 3.3 Consultant shall not receive any compensation for extra work without prior written authorization of City. Any authorized compensation shall be paid in accordance with Exhibit "B ". City shall reimburse Consultant only for those costs or expenses which have been specifically approved in this Agreement, or specifically approved in advance by City. 4. STANDARD OF CARE 4.1 All of the services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with the community professional standards. Qualified and experienced personnel who are not employed by City shall perform all services. Consultant represents and warrants to City that it has or shall obtain all licenses, permits, qualifications and approvals required of its profession. Consultant further represents and warrants that it shall keep in effect all such licenses, permits and other approvals during the term of this Agreement. 4.2Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's work promptly, or delay or faulty performance by City, contractors, or governmental agencies, or any other delays beyond Consultant's control or without Consultant's fault. 2 4.3 Consultant shall have control over or charge of and shall be responsible for the Project's design, the means, methods, techniques, sequences or procedures, or for any health or safety precautions and programs in connection with the Project. These duties are and shall remain the sole responsibility of. Consultant. Consultant shall not have control over or charge of acts or omissions of employees of the City. 5. INDEPENDENT PARTIES City retains Consultant on an independent contractor basis and Consultant is not an employee of City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the details in means of performing the work provided that Consultant is compliance with the terms of this Agreement. Anything in this Agreement which may appear to give City the right to direct Consultant as to the details of the performance of the services or to exercise a measure of control over Consultant shall mean that Consultant shall follow the desires of City only with respect to the results of the services. 6. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator, and any other agencies which may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Consultant on the Project. 7. PROJECT MANAGER Consultant shall assign the Project to a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Project term. Consultant has designated Jeff Hart to be its Project Manager. Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 8. TIME OF PERFORMANCE Time is of the essence in the performance of the services under this Agreement and the services shall be performed by Consultant in accordance 3 with the proposed schedule of completion. The failure by Consultant to strictly adhere to the schedule may result in termination of this Agreement by City, and the assessment of damages against Consultant for delay. Notwithstanding the foregoing, Consultant shall not be responsible for delays which are due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. 8.1 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator not later than ten (10) calendar days after the start of the condition which purportedly causes a delay, and not later than the date upon which performance is due. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays, which are beyond Consultant's control. 8.2For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by either telephone, fax, hand delivery or mail. 9. CITY POLICY Consultant will discuss and review all matters relating to policy and project direction with the Project Administrator in advance of all critical decision points in order to ensure that the Project proceeds in a manner consistent with City goals and policies. 10. CONFORMANCE TO APPLICABLE REQUIREMENT All work prepared by Consultant shall conform to applicable city, county, state and federal law, regulations and permit requirements and be subject to approval of the Project Administrator and City. 11. HOLD HARMLESS Consultant shall indemnify, defend, save and hold harmless City, its City Council, officers, and employees (collectively "Indemnitees ") from and against any and all loss, damages, liability, claims, allegations of liability, suits, costs and expenses for damages of any nature whatsoever, including, but not limited to, bodily injury, death, personal injury, property damages, or any other claims arising from any and all acts or omissions of Consultant, its employees, agents or subcontractors in the performance of services conducted or performed or products provided pursuant to this Agreement. This indemnity shall apply even in the event of passive or concurrent negligence of Indemnitees, excepting only the sole negligence or willful misconduct of Indemnitees, and shall include attorneys' fees and all other costs incurred in defending any such claim. Nothing in this indemnity shall be construed as authorizing, any award of attorneys' fees in any action on or to enforce the terms of this Agreement. 12. INSURANCE Without limiting consultant's indemnification of Indemnitees, and prior to commencement of work, Consultant shall obtain and provide and maintain at its own expense during the term of this Agreement policy or policies of liability insurance of the type and amounts described below and satisfactory to City. Certification of all required policies shall be signed by a person authorized by that insurer to bind coverage on its behalf and must be filed with City prior to exercising any right or performing any work pursuant to this Agreement. Except workers compensation, all insurance policies shall add the City as an additional insured for all liability arising from Consultant's services as described herein. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Bests Key Rating Guide: unless otherwise approved by the City Risk Manager. A. Worker's compensation insurance covering all employees and principals of Consultant, per the laws of the State of California. B. Commercial general liability insurance covering third party liability risks, including without limitation, contractual liability, in a minimum amount of $1 million combined single limit per occurrence for bodily injury, personal injury and property damage. If commercial general liability insurance or other form with a general aggregate is used, either the general aggregate shall apply separately to this Project, or the general aggregate limit shall be twice the occurrence limit. C. Commercial auto liability and property insurance covering any owned and rented vehicles of Consultant in a minimum amount of $1 million combined single limit per accident for bodily injury and property damage. Said policy or policies shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days' prior notice has been given in writing to City. Consultant shall give City prompt and timely notice of claim made or suit instituted arising out of Consultant's operation hereunder. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. 5 Consultant agrees that, in the event of loss due to any of the perils for which it has agreed to provide comprehensive general and automotive liability insurance, Consultant shall look solely to its insurance for recovery. Consultant hereby grants to City, on behalf of any insurer providing comprehensive general and automotive liability insurance to either Consultant or City with respect to the services of Consultant herein, a waiver of any right of subrogation which any such insurer of said Consultant may acquire against City by virtue of the payment of any loss under such insurance. 13. PROHIBITION AGAINST TRANSFERS Consultant shall not assign, sublease, hypothecate or transfer this Agreement or any for the services to be performed under this Agreement, directly or indirectly, by operation of law or otherwise without prior written consent of City. Any attempt to do so without consent of City shall be null and void. 14. CONFIDENTIALITY The information, which results from the services in this Agreement, is to be kept confidential unless the release of information is authorized by City. 15. CITY'S RESPONSIBILITIES In order to assist Consultant in the execution of his responsibilities under this Agreement, City agrees to provide the following: A. Transfer data each month via the file transfer protocol (FTP) using a preassigned host, address, user name and password. 16. ADMINISTRATION This Agreement will be administered by the City Administrative Services Department. Mr. Glen Everroad shall be considered the Project Administrator and shall have the authority act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 17. RECORDS Consultant shall keep records and invoices in co- nection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records during normal business hours. Consultant shall allow inspection of all work, data, documents, proceedings and activities related to the F. Agreement for a period of three (3) years from the date of final payment under this Agreement. 18. WITHHOLDINGS City may withhold payment of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or his designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of seven percent (7 %) per annum from the date of withholding of any amounts found to have been improperly withheld. 19. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other consultants in connection with the Project. 20. CONFLICTS OF INTEREST A. The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making decisions that will foreseeably financially affect such interest. B. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 21. SUBCONSULTANT AND ASSIGNMENT A. Except as specifically authorized under this Agreement, the services included in this Agreement shall not be assigned, transferred, contracted or subcontracted without prior written approval of City. 22. NOTICES All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered personally or on the third business day after the deposit thereof in 7 the United States mail, postage prepaid, first class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City, attention: Mr. Glen Everroad at: City of Newport Beach 3300 Newport Boulevard P. O. Box 1768 Newport Beach, CA 92658 -8915 (949) 644 -3141 Fax: (949) 644 -3073 All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant, attention: Mr. Jeff Hart at: Optimal Print Technologies 4029 Westerly Place Suite -113 Newport Beach, CA 92660 (949) 260 -1050 Fax: (949) 260 -1057 23. TERMINATION In the event either part hereto fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) days, or if more than two (2) days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, the nondefaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. 23.1 City shall have the option, at its sole discretion and without cause, of terminating this Agreement by giving seven (7) days' prior written notice to Consultant as provided herein. Upon termination of this Agreement, City shall pay to the Consu'tant that portion of compensation specified in this Agreement that is earned and unpaid prior to the effective date of termination. 24. COMPLIANCES Consultant shall comply with all laws, state or federal and all ordinances, rules and regulations enacted or issued by City. f 25. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 26. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Any modification of this Agreement will be effective only by written execution signed by both City and Consultant. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: M Robin Clauson Assistant City Attorney for the City of Newport Beach CONSULTANT M Dan Stenson Standard Printing Company 9 CITY OF NEWPORT BEACH A Municipal Corporation M Homer Bludau, City Manager for the City of Newport Beach CONSULTANT M Jeff Hart Optimal Print Technologies, LLC EXHIBIT "A" JOB SCOPE PROPOSED TO THE CITY OF NEWPORT BEACH Parallel Test Date: 12/01/02 Targeted Live Date: 01/02/03 Project: Water Bill processing, printing, and mailing. Consultant will provide its Information Outsource services to process print and mail City's municipal water bills once a month, with an expected volume of 13,000 envelopes. Information Outsource services include: 1. Data Pre - Process 2. CASS Certification of Addresses 3. High speed laser imaging of simplex confirmations 4. Automated inserting of statements and inserts 5. Pre - Sorting mail for postal discounts 6. Delivery to USPS 7. Itemized printing and postage reports Terms: SPC will acknowledge data received from City within four hours of data receipt (8am to 1 pm Monday through Friday). If the acknowledgement is verified and sent back to SPC before 11am Monday through Friday, we will drop the water bills in the mail the same day. If acknowledgement is received after 11am SPC will drop the mail the following business day. Major fluctuations to the file size can cause changes in the processing and mail drop times. SPC Contact: Debbie Bogdanski or Dan Stenson (602) 352 -2375 or (800) 735 -9515 Fax: (602) 352 -2370 Data Transmission: Data will be sent via FTP Materials: Water bills will be printed on perforated 20# or 24# printing bond, 8.5 X 11 or 8.5 X 14 format. If the stock becomes obsolete, City will be billed for the remaining inventory. Outgoing envelope will be a standard #10 double window. We will need a copy of the insert no less than one week before the planned start date. Data Archival: No archival is required at this time. Postage: OPT will invoice City for one month postage as deposit. City will be billed for actual postage costs. Inserts: Static inserts and selective inserts, if any, (customer supplied) need to be shipped to SPC at least two business days prior to the intended production date. If we are to produce the insert, we need the information five business days prior to the intended production date. Electronically transmitted data for digital production can be sent two business days prior to production. Return and Remit Addresses: The return address is furnished in the data Special Messages: The CSR will need any special messages sent via E -Mail using MS Word at least 72 hours before data receipt. These messages will incur programming time to add to each water bill run. Pull Accounts: SPC understands you want the capability to pull specific water bills for special processing. SPC will need of your pull file in an Excel file (exported as a DBF) to let us know which water bills should be pulled 24 hours prior to the processing of your live file. Unrecognized Addresses: Any address that cannot be automated will be printed, inserted and mailed at the lowest rate possible. A non - verified address report will be faxed to your office along with a data acknowledgement sheet. Fax Covers heeUAcknowledgment sheet: Must receive written approval in a timely manner to ensure production commitments. Development Time: SPC estimates it will take 10 -15 programming hours to develop this job. SPC will need 30 workdays to create the initial program, mock -ups and preliminary test output for your water bills. You need to review the mock -ups and test output and forward any changes toSPC. SPCwill make any necessary changes or revisions based on this review. Programming charges will be incurred for the initial setup and any changes made after go live. Once the setup is approved, it will be added to the production schedule. EXHIBIT "B" Outsource Proposal Job Summary: Consultant will provide services described in Exhibit "A" for the following fees and charges: Form Cost (Each): Stock of 150,000 Laser Bill Shell printed on white 24# bond, horizontal pert. We will bill you for the stock as it is used. If th e bill you for the stock we have in inventory. Envelope Cost (Each): # 10 Double Window #9 Single Window Programming (Per Hour): $0.025 prints 1 over 0 ink with an extra stock becomes obsolete we will $0.020 $0.018 $100.000 We will give you a programming proposal once we review complete sample data. CD development will incur additional costs. Pre - Processing Data (Each Record): $0.005 Service Costs Per Page: Bill- Simplex (Each): $0.14 Bill- Duplex (Each): $0.17 Services include: Formatting data, postal sorting, postal reports, laser image first page (duplex), fold first page, insert first page, insert BRE, insert up to 2 static inserts, seal, meter, tray, sleeve, band and deliver to USPS. Data will be processed within 4 hours of data receipt (8:00 a.m. to 1:00 p.m., Monday — Friday). Drop dates will be decided between customer and SPC on a job by job basis. Additional Costs: Static Inserts (Each Additional) $0.01 CD or Electronic Archiving $15 flat per transfer or each CD, and each image $0.02 7 page or more Mail Preparation (Each) $0.35 Pre Printed Insert (Flyer) Print Cost duplex $0.028 Postage: One Ounce, Automated, First Class $0.278- $0.309 Material costs may change over the course of time. Changes will occur only at the point of reordering stock for inventory. If you require Saturday or holiday processing, overtime charges will be incurred. Consult Optimal Print Technologies for an estimate. If you have any questions regarding this proposal, please feel free to call (949) 260 -1050. EXHIBIT "C" ELECTRONIC BILL PRESENTMENT Job Summary: Consultant will create an enrollment page and maintain a table of current companies enrolled in Electronic Bill Presentment (EBP). Once a customer has enrolled for EBP, SPC will send an alert e-mail message to them each day that invoice or statement activity occurs. SPC will maintain all billing for City of Newport Beach at the Edcou -Vault web server. The billing will be maintained for a period to be determined later from the date the transaction was posted to the server. Enrollment and Update Page: The enrollment page is designed to allow first time users to enroll for EBP. Enrolling will also allow viewing of City of Newport Beach billing. This page will also allow the City of Newport Beach customers to edit their own user ID, password, secret question and e-mail address. Admin Search Page: A user of the Edocu -Vault admin system may be any user that City of Newport Beach wishes to have access to these pages. The typical user of the Admin functions will be A/R, Customer Service, Sales and MIS personnel. A general admin query maybe the customer number or customer alpha search. Summary Page: The summary page consists of the key data elements of the documents being stored. The data elements are displayed in spreadsheet form. City of Newport Beach will be able to define the column headings that contain the most pertinent data. The user can access the XML of the archived images by double clicking on any item listed in the far left -hand column of the page. E -Mail Alert (per month): 0 -999: $0.30 ea. 1M-4,999: $0.20 5M- 9,999: $0.15 10M- 25M: $0.10 SPC will send an alert e-mail message to the enrolled customer each day that invoice or statement activity occurs. The e-mail will not be sent until City of Newport Beach approves the invoice or statement run. The e-mail alert message can be changed by e- mailing or faxing your message in MS Word to your SPC CSR. The alert e-mail message will contain the City of Newport Beach message and a hyper link to the "Search Page ". Invoice Archive maintained on the Edocu -Vault servers: 3 -6 months- 10,001 -50M: $0.065 ea. Pg. 7 -12 months- 10,001 -50M: $0.075 ea. Pg. 13 -24 Months- 10,001 -50M: $0.08 ea. Pg. 25 -48 months- 10,001 -50M: $0.09 ea. Pg. 1/0 will maintain all invoice transactions on the Edocu -Vault servers. 1/0 will archive these documents for a period of 24 months from the date the documents are posted to the server. The City of Newport Beach archive site will be set up with two levels of administration. The invoice will emulate the paper bill in look and feel. 1 Level 1 Customer - Any City of Newport Beach customer will be able to access their archived documents by logging into the City of Newport Beach "Customer Care" site. Level 2 General Administration - Any City of Newport Beach general admin will be able to access all City of Newport Beach archived documents by logging into the City of Newport Beach "Customer Care" site. At City of Newport Beach "Member Services Page" login the user is confirmed and then passed into the "Landing Page ". At the "Landing Page" the end user can select "View Billing On- line ", at which point they are sent to the "Summary Page ". The summary page lists (in spreadsheet form) the key detail elements of the archived documents. The user can access the archived billing by double clicking on any item listed in the far left -hand column of the summary page. After viewing the image the user will be navigate back to the City of Newport Beach home page or back to the search page. Payment Link: All online payments made by EBPP customers will be made via URL to the City of Newport Beach's bill payment website. CITY OF NEWPORT BEACH Site Administration: a. E -Mail Alert Message- can be updated with a written or E -mail request to 1 /0. b. Marketing Profiles- can be created and changed on line as frequently as CITY OF NEWPORT BEACH wants. The Edocu -vault system allows Marketing Profiles to be created from a relational database of archived customer data. Any data element defined by CITY OF NEWPORT BEACH can be used in the relational definition of a Marketing Profile, for example; CITY OF NEWPORT BEACH may want to create a profile that defines all customers who are in Newport Beach and have a statement balance over $600. Any customer that fits the defined profile is then tagged to receive a corresponding Target Message. c. Target Messages- can be created and changed on line as frequently as CITY OF NEWPORT BEACH wants. The Edocu -vault system allows Target Messages to be placed on one of the web pages maintained for CITY OF NEWPORT BEACH on the Edocu -vault servers. The Edocu -vault system allows Target Messages to be placed on customer pages that fit the corresponding Marketing Profile. Any data element defined by CITY OF NEWPORT BEACH can be used in the relational definition of a Marketing Profile, for example; CITY OF NEWPORT BEACH may want to create a profile that defines all customers who are in Newport Beach and have a statement balance over $600. Any customer that fits the defined profile is then tagged to receive a corresponding Target Message. d. Reporting- we have created several canned reports that can be accessed through the Administration site. CITY OF NEWPORT BEACH also has the ability to create run reports as often as they like from the Administration site. The reporting feature allows reports to be created out of the database. The reports have the relational functionality as noted above for the Marketing Profiles. The complied reports can be printed locally or exported as a CSV (comma separated values) file, which can be used easily with database programs such as Access or Excel. View Expiration creating Snail Mail We will create a time stamp on every invoice and statement that has a corresponding e-mail alert message. If the XML archive of an invoice is not viewed, within five days of the e-mail alert being sent to the customer, we will add that invoice to the next billing file sent by City of Newport Beach. The non - viewed invoice will be imaged and mailed on the next invoice run of snail mail for City of Newport Beach. FAQ Page We will create a graphic mimic of the internet presented invoice or statement. The graphic image will have data elements labeled so that understanding the billing becomes easier for a City of Newport Beach customer. CD archiving: Flat Charge of $15.00 per CD $0.02 archive page At the 12 month anniversary of data storage, data can be transferred to CD for long term archival by City of Newport Beach. The CD will allow the ability to search, retrieve, print or store the archived data. We can create the CD as often as City of Newport Beach requires. Programming (Per Hour): $125.00 per hr We would estimate 10 hours of development programming per page to implement this proposal as listed above. If further development is required we will quote programming once we understand the complete scope of the modification to the EBP project. If you have any questions regarding this proposal, please feel free to call (949) 260 -1050. CITY OF NEWPORT BEACH Administrative Services Department November 1, 2002 TO: MEMBERS OF THE FINANCE COMMITTEE (via email and printed copy in Finance Committee Member boxes) FROM: Administrative Services Staff (Dick Kurth) SUBJECT: Bill Printing & Mailing At Wednesday's Finance Committee meeting one of the topics was the outsourcing of the bill printing and mailing function. In discussing the tentatively selected vendor, Council Members Heffernan and Bromberg suggested additional information that would be useful in the staff report. We wanted to give you some pre -staff report feedback on new information; as well as information we already had but didn't include before. As stated in the Meeting, our initial bias was toward selecting another company with which we had done business in the past. But, as the process went on, Optimal rose to the top in the view of every staff person participating in the selection process. What set them apart was their better fit with what we are doing in Newport Beach, both technically and procedurally. We were also impressed with their size, flexibility, and established record of adapting things on their end to meet their clients' needs, rather than the other way around. In addition to reviewing the information we had on hand, including notes from previous interviews, we called three more of their existing clients yesterday. We also called Dan Stenson again. He is one of the principals (the other is his brother -in -law) of this privately held, largely family owned venture. Optimal Print Technologies was started in 1952 as a forms printing company. The company has grown and evolved significantly with technology and other changes over time, with the current business model basically being in place since 1995. They have 140 to 150 customers and do an average of 1.5 million pages of mailings per month. Their largest customer accounts for 400,000 of those. As contrasted to mail houses, they consider themselves Critical Mail Processors; and they provide several closely related services as well. They do very little of what would be considered "junk" mail; and then it is part of a bigger project they are doing for an established customer. Their printings and mailings are of the type that is essential to their client's operations, such as bills. Dan explained that their acceptable error /non- delivery standards, staffing, equipment, and overall operation are substantially different than those of a mail house. They also provide on line presentment, data storage and retrieval, and merging and compiling not only of paper inserts but also of the digital information itself. With all services combined (printing, mailing. and related services), we would end up being a small to mid -range customer for them. Even so, they are clearly quite interested in getting our account. (We have found that there is more than a little attraction to having the name Newport Beach on a company's client list.) They anticipate adding no new equipment for the additional workload we would bring, at least initially. Their general policy is to add equipment whenever existing equipment is at about 60% of capacity. The reason for this is that their tolerance for operating down time is extremely low, and they want their risk exposure to be low accordingly. They have 65 full time employees. There is a lot of cross training, but at least 15 of those are employed full time in the print/mail operation every day. They make minimal use of temporary employees. We have spoken to two of their clients (City of Berkeley and First Republic Bank), both of which gave them very strong endorsements. The nature of the work that Optimal does for these entities is very similar to what we envision here. In addition, we are expecting return calls from three other references that we have now contacted. Since they are a privately held company, they probably have no obligation to provide us with financial information, but they readily agreed to do so— almost enthusiastically, in fact, right from the outset. A copy of their latest audited annual financial report should be received on Monday. We will do some ratio type comparisons in the areas of liquidity, solvency, profitability, and whatever else looks interesting; and confirm that what they have told us is consistent with their annual report. Based on what they have provided us already (verbally and in writing); what we have learned from clients (and competitors); and what we gleaned from the site visit, we will be surprised if there are any surprises in the annual report. We'll let you know. A copy of the proposed contract will be reviewed by the City Attorney early next week. If changes aren't needed, this will be the first time that has happened that anyone can remember, but we don't anticipate any problem getting the details worked out. We expect to have final wording smoothed out in time for the City Council Meeting on November 26, 2002. I hope this addresses the points that were raised at the Finance Committee Meeting, and any other concerns you may have. If not, please let us know. Thanks, and have a great weekend, all!