HomeMy WebLinkAboutAgenda Report - April 15, 1998 (52)AGENDA TITLE: Approve Purchase and Implementation of a Customer Information and Utility Billing System
MEETING DATE: April 15, 1998
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: That the City Council approve the purchase and implementation of a
Customer Information System from Orcom Systems, Inc. for the City's utility
billing and customer service function.
BACKGROUND INFORMATION: The City of Lodi Finance Department provides billing services for electric,
water, wastewater, and refuse utilities. The current system is not year 2000
compliant nor does it meet electric deregulation requirements.
Staff members began evaluating various Customer Information System (CIS) packages over a year ago, and at that
time studied services and products from over 20 vendors. In addition, staff and two Council Members traveled to
Oregon to meet with Orcom representatives and to also meet with an alternative vendor in the state of Washington.
The bottom line at the time was a preliminary recommendation to acquire Orcom Systems, Inc.'s Mirror Pond software
product. However, the project proposal was quoted at $977,250 for the package in addition to implementation costs,
which put the total project cost at over $1.2 million. Staff was somewhat hesitant to recommend a project of this
magnitude without first evaluating alternatives such as outsourcing the function or becoming a member of a service
bureau.
The City subsequently joined efforts with the Northern California Power Agency (NCPA) and with the Southern
California Public Power Authority (SCPPA) to collaboratively solicit proposals from CIS vendors. The process was
time-consuming yet extremely thorough and involved soliciting Requests for Proposals for four primary options:
1. CIS package acquisition by each individual agency for product of their choice.
2. CIS package acquisition by more than one agency of the same product (volume discounting).
3. Service bureau formation whereby agencies jointly purchase one system and run the system out of one agency.
4. Total outsourcing of the utility billing function.
When the NCPA/SCPPA process was complete, it became quite evident that there were limited choices for immediate,
cost-effective solutions; primarily those offered by Enable, SCT, and Orcom. The Finance Director and the Electric
Utility Director traveled with representatives from the NCPA/SCPPA group to see first-hand the Enable outsourcing
option (which uses Orcom software) and to see the SCT product in service.
Through their review of SCT and Enable, and having previously evaluated the Orcom system, their joint
recommendation is the Orcom product. Orcom is "ready -to -go," has the actual software already designed and
functional, and is the least costly option to the City on a per customer basis. Mr. Stan Helmle, Information Systems
Manager, requested of Orcom that they "refresh" their original proposal cost estimates and has since received a
revised proposal of $793,500 for the package. Total costs associated with the project include the following:
H. Non Flynn City ManZer
Approve Purchase and Implementation of a Customer Information and Utility Billing System
April 15, 1998
Page Two
Initial Costs:
1. Orcom Software and Quick Start— The Orcom Mirror Pond software is.a customer information and billing system
(CIS) software. The Quick Start implementation methodology has been developed to provide a more reliable,
cost-effective method of installation, which attributes to the reduction in cost from Orcom's original proposal.
Cost - $793,500
2. Hardware Upgrade — The IBM AS/400 hardware is in place at the City of Lodi. Hardware is needed to ensure that
at least 40 gigabytes of useable disk space is available for the implementation of the Mirror Pond CIS.
Cost - $54,000
3. Rate Studies Module — This application allows for the creation and storage of multiple rate scenarios for
comparison and analysis. It can create "what -if' scenarios and will help provide quick response to new economic
development opportunities and to staying competitive in a deregulated utilities market.
Cost - $30,000
4. Project Contingency— Atypical project budget will include a contingency for unforeseen costs in addition to those
costs not yet defined. Contingencies will often range from 10% - 20% depending on the project scope. The
Orcom project is well defined; however, the current system, like antiquated infrastructure, may present
unanticipated problems. Staff is recommending a 15% contingency.
Cost - $119,025
Annual Costs for First Three Years:
1. Contract Analyst — Since current staff members are entrenched in the J.D. Edwards Financial Systems project as
well as the day-to-day demands of data processing, the addition of one contract programmer analyst whose main
focus will be CIS will be required for a three-year period to see the project through full implementation.
Cost Per Year - $65,000
Annual Costs:
1. Orcom Extended Support — The extended support program will ensure that the information system keeps pace
with technological advancements, new ideas and changing regulations, thereby protecting the investment in the
system and the training of staff. Cost Per Year - $53,820
City staff members have conducted an extremely thorough review of CIS options in order to confidently make the
aforementioned recommendation for the Orcom project. The final capital outlay for the project will be $956,850, which
includes one time costs of:
• Orcom package and implementation $ 793,500
• Hardware upgrade $ 54,000
• Rate studies module $ 30,000
• Contingencies $ 119,025
TOTAL $ 996,525
Approve Purchase and Implementation of a Customer Information and Utility Billing System
April 15, 1998
Page Three
Annual costs will include a three-year contract for an analyst for a total of $195,000 (or, $65,000 per year including
salary and benefits). There will also be annual costs for extended support by Orcom in the amount of $53,820 per
year.
In addition, it is anticipated that in the near future, the Finance Department will find it necessary to focus a
considerable amount of resources on customer service functions. This function, although in place now, will grow and
change along with the evolution of deregulation and may make it necessary to hire and train employees in a full-time
capacity where the Department now has part-time employees.
FUNDING: Enterprise Capital Funds
65% Electric Utilities
17.5% Water
17.5% Wastewater
Funding Available:
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OAA ueZ ti � l /l rA'
Vicky McAthie, Finance Director
Respectfully,
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Janet S. Keeter
Deputy City Manager
Prepared By: Stan Helmle, Richard Prima, Roy Todd,
Vicky McAthie, and Alan Vallow
Attachment
cc: Electric Utility Director
Finance Director
Information Systems Manager
Public Works Director
Data Processing Manager
UPW\PRIME2\ADMIN\CLERK\COUNCIL\COUNCOM\CISSYSTM.DOC
Summary of Costs
SOFTWARE
Mirror Pond CIS
Customer Information System $ 259,000
Includes:
Utility Billing
Service Orders
Utility Contacts
Utility -Defined Screen Facility
40 Orcom Panel Licenses
Facilities Data Manager $ 30,000
CIS Interfaces & Complementary Software
Itron Meter Reading Interface $ 10,000
Third -Party Products
Seagull Charge (40 iia $250/User) $ 10,000
Total Orcom Systems' Software
Orcom Systems, Inc. - CONFIDENTIAL
March 10, 1998
$ 309,000
City of Lodi
SUMMARY OF COSTS 2 -1
Summary of Costs
QUICKSTART IMPLEMENTATION SERVICES
Estimated Project Management Cost $ 75,000
(500 hours billable at $150 per hour, per person)
Estimated Hardware Installation and Setup $ 7,500
(50 hours billable at $150 per hour, per person)
Estimated Core Group Project Orientation $ 4,000
(40 hours billable at $100 per hour, per person)
Estimated Business Analysis $ 60,000
(400 hours billable at $150 per hour, per person)
Estimated Software Installation $ 5,000
(50 hours billable at $100 per hour, per person)
Estimated Core Group Training $ 30,000
(15 student weeks; $2,000 per student)
Estimated Custom Programming $ 75,000
(500 hours billable at $150 per hour, per person)
Estimated Interface Programming $ 30,000
(200 hours billable at $150 per hour, per person)
Estimated Conversion Programming $ 90,000
(600 hours billable at $150 per hour, per person)
Estimated Acceptance Testing $ 18,000
(120 hours billable at $150 per hour, per person)
Estimated End User Project Orientation $ 6,000
(40 hours billable at $150 per hour, per person)
Estimated End User Training $ 30,000
(300 hours billable at $100 per hour, per person)
Orcom Systems, Inc. - CONFIDENTIAL City of Lodi
March 10, 1998 SUMMARY OF COSTS 2 - 2
Summary of Costs
QUICKSTART IMPLEMENTATION SERVICES (continued)
Estimated Go -Live Support $ 45,000
(300 hours billable at $150 per hour, per person)
Estimated Audit Support $ 9,000
(60 hours billable at $150 per hour, per person)
Total Estimated QuickStart Implementation Cost
Total Proposed Cost
$ 484,500
NOTE: The hours that we have quoted are estimates only. Clients will be billed
for installation and training services as outlined on Orcom's Rate Structure.
Installation and training costs do not include any travel, meal and lodging
expenses.
Orcom Systems, Inc. - CONFIDENTIAL
March 10, 1998
City of Lodi
SUMMARY OF COSTS 2 - 3
Summary of Costs
ORCOM SUPPORT
Orcom Premium Extended Support $ 53,820
(18% of the total Orcom Software Cost, billed annually.
Please see Extended Support for details)
Orcom Systems, Inc. - CONFIDENTIAL City of Lodi
March 10, 1998 SUMMARY OF COSTS 2 - 4
RESOLUTION NO. 98-61
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE PURCHASE AND IMPLEMENTATION
OF THE CUSTOMER INFORMATION SYSTEM FROM
ORCOM SYSTEMS, INC. FOR THE CITY'S UTILITY
BILLING AND CUSTOMER SERVICE FUNCTION
WHEREAS, Lodi Municipal Code, §3.20.070, authorizes dispensing with bids for
purchases of supplies, services or equipment when it is in the best interests of the City
to do so; and
WHEREAS, the current billing services provided by the Finance Department is
not year 2000 compliant, nor -does it meet electric deregulation requirements; and
WHEREAS, the staff and Council began evaluating various Customer
Information System (CIS) packages over a year ago; and
WHEREAS, the preliminary recommendation was to acquire Orcom Systems,
Inc.'s Mirror Pond software product, but due to the total project cost of $1.2 million, staff
sought to evaluate other alternatives such as outsourcing the function or becoming a
member of a service bureau; and
WHEREAS, the City subsequently joined efforts with the Northern California
Power Agency (NCPA) and with the Southern California Public Power Authority
(SCPPA) to collaboratively solicit proposals from CIS vendors; and
WHEREAS, the process involved soliciting Requests for Proposals for four
primary options:
1. CIS package acquisition by each individual agency for the product of their choice.
2. CIS package acquisition by more than one agency of the same product (volume
discounting).
3. Service bureau formation whereby agencies jointly purchase one system and run
the system out of one agency.
4. Total outsourcing of the utility billing function.
WHEREAS, it was determined that there were limited choices for immediate,
cost-effective solutions; primarily those offered by Enable, SCT, and Orcom; and
WHEREAS, the Finance Director and the Electric Utility Director traveled with
representatives from the NCPA/SCPPA group to see the Enable outsourcing option
(which uses Orcom software) and the SCT product in service; and
WHEREAS, through their review of SCT and Enable, and having previously
evaluated the Orcom System, the NCPA/SCPPA group and the City of Lodi's
representatives recommend the Orcom product.
WHEREAS, it is staff recommendation that the City purchase and implement the
Customer Information System from Orcom Systems, Inc. for the City's utility billing and
customer service function.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lodi
does hereby approve the purchase and implementation of the Orcom Information
System from Orcom Systems, Inc., in the estimated amount of $996,525.00.
Dated: April 15, 1998
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I hereby certify that Resolution No. 98-61 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held April 15, 1998 by the following vote:
AYES: Council Members - Johnson, Land, Pennino and Sieglock (Mayor)
NOES: Council Members - Mann
ABSENT: Council Members - None
ABSTAIN: Council Members - None
&Zt� )�, &OZ4k)
ALICE M. RE MCHE
City Clerk
98-61