REPORT TO THE CITY COUNCIL
December 10, 2015
FROM: THOMAS C. ESQUEDA, Director
Department of Public Utilities
SUBJECT
Title
Award a contract for an amount not to exceed $230,833 to West Monroe Partners for Consulting Services for the Department of Public Utilities, Utility Billing & Collection (RFP No. 072915).
Body
RECOMMENDATION
Staff recommends that Council award a Consulting Services Agreement to West Monroe Partners to conduct an operational assessment and evaluation for the Utility Billing & Collection (UB&C) Division of the Department of Public Utilities, in an amount not to exceed $230,833.
EXECUTIVE SUMMARY
DPU is seeking professional consulting services to conduct an operational assessment and evaluation of UB&C. Expertise from a professional consulting service will provide the Department with an assessment of UB&C’s organizational structure, practices, operations, processes, systems and tools used by UB&C. Staff recommends Council award a contract to West Monroe Partners for consulting services.
BACKGROUND
The Utility Billing & Collection Division of DPU consists of 60 employees. It is responsible for issuing monthly utility bills for 108,000 solid waste accounts, 126,000 sewer accounts, 132,000 water accounts, and 118,000 community sanitation accounts. Some accountholders are billed for all four services while others are billed for only one, two or three services. UB&C’s responsibilities include initiating new accounts; terminating existing accounts; transferring existing accounts; receipt and distribution of utility billing revenue; and communicating with accountholders on daily basis regarding their utility bill or the quality of services provide by the City’s water, sewer, solid waste, and community sanitation staff. UB&C communicates with accountholders by telephone, email, and in person at UB&C customer service counters.
The UB&C phone system currently processes approximately 110,000 phone calls per month, and most callers can receive service using the interactive voice response (IVR) features of the phone system, and others speak directly with a Customer Service Representatives. The average number of phone calls received by City Customer Service Representatives is approximately 800 per day, and some days the call volume can exceed 1,500 calls. The annual utility bill revenues managed by UB&C are approximately $190 million, and the annual operating budget for UB&C is approximately $5.5 million (~2.9% of total annual revenue).
Project Purpose
Prior to January 2011, the UB&C was operated, managed, and administered through the City’s Finance Department. On January 1, 2011, the Administration determined that cost-efficiency and effectiveness improvements could be achieved for the City’s ratepayers if UB&C was operated, managed, and administered through DPU; the organizational change became effective July 1, 2011.
In April 2015, community concerns were expressed regarding the operations and performance of the UB&C Division, specifically regarding customer engagement, revenue management and accounting, policies related to delinquent accounts, and performance metrics. After four years of operating within DPU, in response to community concerns the Administration is initiating an operational assessment and evaluation for UB&C. Similar operational assessment and evaluations have been conducted by DPU for other operating divisions such as Water, Wastewater, and Solid Waste.
The key tasks to be completed for the operational assessment and evaluation include, but are not limited to:
• Creating an effective community stakeholder engagement process to determine the level and quality of service expected from the UB&C Division.
• Identifying best-in-class efficiency and effectiveness measures (key performance indicators) that can be used to monitor and report on the performance of the UB&C Division consistent with community stakeholder expectations for level and quality of service.
• Performing a gap analysis, using the selected key performance indicators, to assess the current performance of the UB&C Division.
• Evaluating alternative improvement options available to correct gaps identified in the existing performance of the UB&C Division.
• Preparing an implementation plan for selected actions to improve the operations and performance of the UB&C Division.
Consultant Selection Process
A Notice Inviting Proposals was published on August 3, 2015. The Specifications were distributed to 28 prospective proposers. Four proposals were received and opened on August 25, 2015. The four (4) firms that submitted proposals were:
• Baker Tilly, Chicago, IL
• R3 Consulting Group, Inc., Berkeley, CA
• West Monroe Partners, Los Angeles, CA
• Mindboard, Sterling, VA
Prior to the proposal due date, the Purchasing Manager established a Selection Committee for the consultant selection process. The Selection Committee consisted of:
• Michael Lima, Controller, City of Fresno, Finance Department
• Jerry L. Schuber Sr., Assistant Director, City of Fresno, Public Utilities Department - Solid Waste Management Division
• Brian Reams, Revenue Manager, City of Fresno, Department of Public Utilities - Utility Billing & Collection
• Dee Barnes, President of Fresno City Employee Association
• Cynthia Williams, Business Manager, City of Fresno, Department of Public Utilities - Solid Waste Management Division
Proposal Review Process
The Selection Committee met on October 2, 2015, to review, evaluate, score and rank the submitted proposals. As presented in the RFP, each of the proposals was evaluated based on the following criteria:
• Ability to meet requirements
• Past performance and experience providing service
• Written proposal and presentation
• Qualifications of key personnel
At the conclusion of the Proposal Review Process, the proposals were ranked as follows, from highest score to lowest: West Monroe Partners; R3 Consulting Group, Inc.; Mindboard; and Baker Tilly. The Selection Committee identified West Monroe Partners as having the highest ranked proposal based on its exceptional presentation, professionalism, knowledge and experience in the utility industry.
Interview Process
Once the Proposal Review Process was complete, the Selection Committee determined that all four firms should be provided the opportunity for an interview. Given that all of the firms were located outside of Fresno County, the Selection Committee agreed to allow firms to conduct their interviews either in person or through an internet-based meeting application. The interview schedule was as follows:
1. Baker Tilly 10/03/15 9:00 a.m. Web-based
2. R3 Consulting Group, Inc. 10/03/15 10:30 a.m. In-person
3. West Monroe Partners 10/03/15 1:30 p.m. In-person
4. Mindboard 10/03/15 3:00 p.m. In-person and Web-based
At the conclusion of the Interview Process, the interviews were ranked as follows: West Monroe Partners; R3 Consulting Group, Inc.; Mindboard; Baker Tilly. The Selection Committee identified West Monroe Partners as having the highest ranked interview based on its exceptional knowledge, presentation, professionalism, experience in the utility industry and ability to connect and understand the Blue Ribbon panel process.
Selection Committee Findings and Recommendation
The Selection Committee’s Consultant Selection Evaluation Report is included as Attachment 1. Based on the quality of the proposals and interviews, the Selection Committee ranked the firms as follows:
1. West Monroe Partners
2. R3 Consulting Group, Inc.
3. Mindboard
4. Baker Tilly
The Selection Committee identified West Monroe Partners as having the highest ranked combination of proposal and interview. Based on this finding, the Selection Committee recommends West Monroe Partners be selected for the UB&C Operational Assessment and Evaluation Study based on its exceptional presentation, professionalism, knowledge and experience in the utility industry.
The Committee believes that West Monroe Partners will provide a well-developed, comprehensive assessment plan including a robust Blue Ribbon panel process. The proposal was very thorough allowing sufficient attention to each major work task, including stakeholder, and expert engagement process. It has an extensive team of resources and brings a wide diversity of skills and utility experience.
Staff recommends Council award a Consulting Services Agreement to West Monroe Partners in the amount not to exceed $230,833 to conduct an operational assessment and evaluation for the UB&C Division of the Department of Public Utilities.
ENVIRONMENTAL FINDINGS
This item is not a “project” for the purposes of the California Environmental Quality Act.
LOCAL PREFERENCE
Local preference was not implemented because no local businesses submitted a proposal.
FISCAL IMPACT
The expenditure will not have any impact to the General Fund. As Utility Billing and Collection is supported by DPU, an Enterprise Department, adequate funding is available from DPU’s Water, Solid Waste and Wastewater Management Division’s Operating Fund to cover the professional consulting services.
Attachment:
Attachment 1 - Selection Committee Report