DATE: October 15, 2024
TO: Mayor and City Council
FROM: Director of Finance
SUBJECT Adopt a Resolution Authorizing the City Manager to Execute an Amendment to the Current Agreement with InfoSend, Inc., for Utility Billing Services Related to the Water Customer Portal, Increasing the Contract by $75,000 and Enter Into New Contract with InfoSend for a Three-Year Term in an Amount Not-to-Exceed $720,000, with the Option to Extend for Two Additional One-Year Periods in an Amount Not-to-Exceed $500,000
RECOMMENDATION
That Council adopts a resolution (Attachment II) authorizing the City Manager to amend the current and expiring agreement with InfoSend, Inc. (InfoSend) for utility bill printing, mailing, and archiving services by $75,000 and renegotiate and execute a new agreement with InfoSend for a three-year period in an amount not-to-exceed $720,000, with the option to extend for two additional one-year terms in an amount not-to-exceed $250,000 per term.
SUMMARY
Staff is seeking authorization to continue a partnership with InfoSend for a period of three-years with the option to extend for two additional one-year terms. InfoSend provides water bill distribution services and archiving. Their services are funded from Water Operating Fund 605 and Sewer Operating Fund 610. Staff is also seeking authorization to amend the current agreement with InfoSend by $75,000 to account for the increased cost of services on hard goods as a result of inflation.
BACKGROUND
In Fall 2019, the City released a Request for Proposals (RFP) for the implementation of an AMI water customer portal with single-sign-on (SSO) bill payment functionality. The service was awarded in May 2021 to WaterSmart for Citywide implementation of a customer portal platform Service. WaterSmart subproposed a partnership with Invoice Cloud, the electronic bill payment vendor to embed SSO bill payment functionality in Hayward’s WaterSmart platform, and InfoSend, the vendor they refer to when water customer portal integration services are incompatible.
DISCUSSION
During implementation discussions with Invoice Cloud, it was revealed that to provide customers electronic access to PDF copies of their bills on the portal, a specific print image archiving service is required. This functionality is important because the water customer portal only displays total bill amounts with no breakdown of charges on customer accounts. InfoSend was awarded an agreement for their PDF archiving service in September 2021 and is due to expire in November 2024.
In addition to the necessary PDF archiving and water customer portal integration services provided by InfoSend, they perform all of the City’s physical bill distribution functions, such as bill printing, sorting, and mailing at lower rates than the previously paid four vendors that provided limited versions of the same services. InfoSend also provides pre-sorting, forwarding, address verification, and bill redesign services.
Infosend mails approximately 256,000 invoices to all water, sewer, and excise tax customers. Due to the cost increase on hard goods (ink, paper, envelopes, etc.), each mailed piece has risen by 26% to $0.40 than the previous $0.32 when the agreement was executed in 2021. This increase also accounts for the higher postage costs over the past few years. InfoSend’s various bill printing and mailing functions can take place with one vendor for approximately $240,000 per year. Based on the range of critical and highly desired services that is provided by InfoSend, it is staff’s recommendation that the City enter into a three-year agreement with InfoSend with the option to extend for two additional one-year periods. The one-year periods will allow staff time to release a request for proposal and work with fellow departments on implementation of a new portal should the need be determined.
When the City entered into agreement with Infosend in November 2021, rates were determined by the market rate at that time. Inflation continued to climb impacting the cost of services over the three-year period. Staff is recommending amending the current agreement with InfoSend by $75,000 to account for the additional costs that have accumulated as a result of inflation.
ECONOMIC IMPACT
There is no economic impact.
FISCAL IMPACT
Continued partnership with InfoSend is anticipated to cost approximately $240,000 annually, or $720,000 over three years. This includes postage costs which is the large bulk of expenses. Extending for two additional one-year periods after the initial three-year period is anticipated to cost approximately $250,000 annually. The cost of the agreement with InfoSend will be included in the annual budget process.
There are sufficient funds available in the Water Operating Fund (Fund 605) and Sewer Operating Fund (Fund 610) to support the amendment to the current agreement by $75,000 to account for the additional costs that have accumulated as a result of inflation.
STRATEGIC ROADMAP
This agenda item continues to support the Strategic Priority of Improve Organizational Health. Specifically, this item relates to the implementation of the following project:
Project 18.: Analyze and shift technology solutions and services to external web based platforms and providers (cloud-first transition).
SUSTAINABILITY FEATURES
The AMI Customer Portal and larger AMI Project promotes efficient water use and water conservation. Continuing accessibility to electronic billing with InfoSend has paper-saving and many other indirect environmental benefits such as eliminating unnecessary bill production.
PUBLIC CONTACT
The agenda for this item was posted in compliance with the California Brown Act.
NEXT STEPS
Following Council approval, staff will take the necessary steps to execute an agreement for a three-year term with the option to extend for two additional one-year periods with InfoSend. Staff will also work to execute Amendment No. 1 to the initial PSA for $75,000.00.
Prepared by: Michael Barnes, Revenue Manager
Recommended by: Nicole Gonzales, Director of Finance
Approved by:
Dustin Claussen, Interim City Manager