City of Independence shares results of external Utilities Billing System Conversion Audit

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September 25, 2018
City of Independence shares results of external Utilities Billing System Conversion Audit

INDEPENDENCE, Mo. – The City Council of Independence tonight heard the results of the completed Utilities Billing System Conversion Audit from BHMG Engineers, Inc. This external, independent audit was announced on August 24 at the recommendation of the City’s Management Analyst. The audit found the new billing system is calculating the majority of customer bills correctly. All water and sewer bills are being calculated correctly; however, a small number of electric bill codes have not been calculating correctly, impacting approximately 350 commercial/net metering customers. Further, issues related to bill delivery, billing cycle lengths, timing of the conversion and changes in level-pay customer amounts led to reasonable customer frustration. Staff is working closely with the billing system software company to address these issues as appropriate and many have already been resolved. The report also noted the complexity of the electric rates are a contributor to customer frustrations.
“While we understand our customers may still have questions related to their utility bills, we are relieved to see all problems discovered are being addressed and no large-scale problems were found,” City Manager Zach Walker said. “To help address the confusion and frustration, we are announcing an extended grace period for repayments. Customers will be able to finance repayments over a four-month period rather than the previous 30 days.”
BHMG noted the conversion from the 30-year-old legacy system was needed as support for the system was discontinuing in July 2018. During the conversion of the 30-year-old data, a number of issues arose delaying the planned one-year implementation for more than two and a half years. Because of the July deadline, the “Go-Live” date of May 22, unfortunately, coincided with the transition from off-peak to on-peak electric rates.
Many customers had questions related to the fuel cost adjustments, or FCA, portions of their bills which in legacy system billing statements had not been pulled out for customer reference. BHMG found that the FCA, which have been calculated using the same base value since 2012, did not impact bills for May, June or July of 2018. In fact, following further review, the 2018 FCA values were lower than the 2017 values for May and June and slightly higher for July.
In looking at the billing system, BHMG also reviewed the impact of degree days (a simplification of weather data to normalize it for comparison) on the 2018 bills. May 2018 had three times more cooling degree days, or days in which customers might have turned on their air conditioning, than 2016 and two times more than 2017. June 2018 experienced a 30 percent increase over June 2017.  Further, the increased use of electricity was evident in the City’s energy sales statistics, 24 percent more in May 2018 over 2017 and 5 percent more in June 2018 over 2017.
The meter reading delays caused by the implementation of the new system resulted in shorter payment periods for some customers and longer read periods for other customers. The largest increase in a customer’s billing cycle was four days. These longer billing cycles resulted in a three to 13 percent increase in usage for the given period. However, the next read generally saw a similar decrease balancing out the overall bill between the two months. Finally, the report noted that this fluctuation in meter reading periods was not uncommon under the legacy system as well with readings varying from month to month between 27 and 34 days.
The largest volume of customer complaints revolved around the delivery of utility bills. It was found that 1,500 to 1,800 bills were mailed to the wrong address. As previously reported, address formatting issues also caused mailing problems as the United States Postal Service did not recognize the address as printed. Until staff has confidence that all address data is formatted correctly in the new system, they have reduced the postal automation and have temporarily stopped issuing late fees and shut-offs.
Another question many customers had was related to the meter readers and the readings they have obtained throughout the transition. Meter reading in Independence is done by manual entry with handheld collectors. BHMG found that with the new billing system, all of the manual processes for the legacy billing system became automated. The resulting workflow modifications are not currently creating the efficiencies staff hoped for, but staff are reviewing the situation and evaluating solutions for the problems in the workflow. There was no further cause for concern found with meter reading or meter readers in the report.
Approximately 480 utility customers are billed utilizing self-report postcards. A larger than typical number of these customers experienced estimated bills because of when the postcard was received in the cycle. The new billing system utilizes a similar algorithm to the legacy system to estimate these values which means the results are believed to be similar.
One big change between the legacy and new billing system relates to those customers signed up for level pay, approximately 4,800. The legacy level pay program did not reconcile annual excesses or shortages related to the customer’s utility usage throughout the year which allowed them to accumulate on a customer’s account. These had previously been paid when a customer closed an account. During the conversion to the new billing system, any reconciliation amounts were added, both positive and negative amounts, to the customer’s balance and divided over 10 months. There were approximately 1,630 customers who received a larger bill because of this change after the new billing system was implemented.
Citizens can find the full 8-page audit report here.
Finally, approximately 11,000 of the 57,000 total customers are currently behind on their payments. This is about 1,000 more than average. These customers are eligible to participate in the four-month repayment period. If you have questions about your account, payment options or assistance programs, please contact Utility Customer Service at (816)325-7930 or via email at The Independence Utilities Center, 17221 E. 23rd Street S., is open from 8 a.m. to 5 p.m., Monday through Friday.
Meg Lewis, Public Information Officer

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