Reengineering utility billing to improve efficiency.

• Author: Helgerson, Stan W.
• Position: New water billing system of the Village of Carol Stream near Chicago

Many governments look to reengineering to battle shrinking budgets and meet increasing citizen expectations. While several examples of reengineering have been seen in large jurisdictions, success is not limited to big cities. Smaller governments can apply the same principles to achieve greater efficiencies and improved customer relations. A village in Illinois achieved just that when it redesigned its utility billing function.

The Village of Carol Stream (population 38,000), located approximately 35 miles west of downtown Chicago, purchases water from the DuPage Water Commission. There are 10,000 accounts that the village bills monthly for water and sewer use. The village processed the billing in-house and issued postcard-type water bills, while a lock box facility was used to receive bill payments. An examination of the billing process in August 1995, however, indicated that improvements were needed.

The postcard water bills were printed on a dot-matrix printer with print resolution of such low quality that the lock box facility's automated payment processors could not always accurately read them. The payment-rejection rate was quite high - at times it exceeded 50 percent. Reprocessing rejected payments increased the village's costs by 70 percent, resulting in $1,200 in additional costs per month, or $14,400 annually. In addition, several customers were unhappy that a payment envelope was not supplied with the bill. Rather than preparing their own payment envelope, some customers paid their water bills in person at village offices, which required greater clerical staff time.

The village wanted not only to eliminate the lock box rejection problem but also, from a reengineering standpoint, to improve and/or simplify the billing product and process. Realizing that it would require a team effort to improve the situation, the village assembled representatives from the lock box processing facility, the village finance department, and an imaging and mailing consultant. During the team's discussions, it was determined that using a laser imaging system rather than the dot matrix printer to print water bills would reduce, or perhaps eliminate, the lock box rejections. Rather than incurring the capital costs of laser imaging hardware, the village looked to the private sector to achieve the improvements.

Outsourcing for Improvements

After a thorough assessment of the outsourcing options available, the village contracted with a private company to...