Have you considered self-insuring your leak adjustment insurance?

Have you looked into offering an insurance program to insure your customers against having to pay for the water lost when they have a leak?

There are a number of for-profit companies offering leak protection insurance, so it must be a lucrative business. We met with a prospect recently who is considering self-insuring their own leak adjustment program. The concept of self-insurance in government has been around for a while and is very popular with some local governments.

Calculating the premium amount

The prospect I mentioned above is going to total their water leak adjustments for the most recent year and divide that total by the number of active water customers. They anticipate the premium will be about $.25 per customer. They plan to offer coverage for one leak per year and they will forgive excess usage for two consecutive billing months. Should the customer not get the leak repaired in a timely fashion, and the excessive usage extends into a third month, that will not be covered by the leak insurance.

Allowing customers to opt-out

This utility plans to give customers the option of opting out, if the so desire. However, that means they will get no assistance in the form of a leak adjustment, should they have a leak.

Making the program even more lucrative

This utility also has primarily AMI meters, so if they practice proactive leak detection, they can further mitigate the cost of leak claims they must pay, providing their customers cooperate and address a leak as soon as they are notified of one.

Is a leak insurance program for you?

Are you trying to decide if you should implement leak insurance? Furthermore, are you trying to determine is self-insurance makes sense? If the answer to either question is “yes”, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help inform your decision-making process.

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© 2019 Gary Sanders

Can we save money by printing our own bills?

I’ve written about why I believe outsourcing the printing of bills is a smart, labor-saving move for utilities. To underscore the labor-saving aspect of outsourcing, the results of the 2018 Utility Staffing Survey showed that 28 of the 32 most efficiently staffed offices outsource their bill printing.

In spite of this, about once a year we have a customer seriously consider bringing the bill printing and mailing process back in-house, ostensibly to save money.

Is it really cheaper to mail bills ourselves?

When all factors are considered – CASS certification software and ongoing maintenance, paper stock and toner or ink to print the bills, the time involved in printing, bursting, folding, inserting, and packaging bills for the Postal Service – I don’t believe it’s any cheaper to print your own bills in-house.

In addition, many outsource printers combine all their mail for the day – yours and any other utilities or businesses they may be mailing that day – to maximize the postage discount. Postal discounts are based on the number of pieces of mail being sent to the same 5-digit ZIP code, then to the 3-digit ZIP prefix, if there aren’t enough pieces to qualify for the 5-digit ZIP discount.

For example, Raleigh’s 3-digit prefix is 276. You may have a few pieces being mailed to ZIP codes starting with 276, but not enough pieces to qualify for a discount. If the outsource company has mail from other mailers going to the Raleigh 276 prefix, they are able to combine yours with the other mail to qualify for a better discount. This simply isn’t an option if you are mailing your own bills, even if you are using CASS certification software.

A little known fact

Many outsource printers have a postal service employee on-site to inspect outgoing mail and insure that all USPS policies are being followed. In cases such as this, mail from the outsource printer enters the mailstream directly without first going to a regional facility.

This isn’t the case when you mail your own bills. You must take your packaged mail to the local post office. From there it most likely is sent to a regional facility for sorting before it enters the mailstream. This generally adds at least a day to the time it takes your customer to receive their utility bill in the mail.

Want to really save money?

As discussed in the last issue, a way to offset the cost of mailing bills is to offer ebilling and encourage your customers to request ebills rather than receiving a paper bill in the mail. For each customer who opts in to ebilling, you save not only the cost of postage associated with mailing their bill, but also the cost of the paper stock and envelopes.

To encourage ebilling, some utilities offer incentives such as a one-time or monthly recurring credits on the customer’s account.

2019 rates dashboard for North Carolina

I’ve written in the past about resources, including the Environmental Finance Center at UNC. The EFC has just released the North Carolina Water And Wastewater Rates Dashboard for 2019. This dashboard contains rates for 499 utilities in North Carolina.

Need help deciding?

Are you trying to decide if you should move to outsourcing (or continue to outsource if you’re already doing so)? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help inform your decision-making process.

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© 2019 Gary Sanders

Mitigating the cost of printing full-page bills

I recently saw a listserv post inquiring about the pros and cons of moving from postcards to full page bills, as well as asking about the costs associated with making the switch. In the same vein, I know we have customers who have resisted transitioning from postcards to full-page bills due to the increased costs, primarily postage.

Postal rate increase

A postage rate increase went into effect on January 27. You can see these new rates here. Using these new rates, let’s examine the difference in postage between postcards and full-page bills.

If you use an outsource printer, they will perform the CASS certification and presorting to qualify for the best possible discount. Under the new price structure, automated presorted mail sorted to the 5-digit ZIP code now costs $.383 per piece. This would include the majority of your bills that are mailed to local addresses. Bills mailed to out-of-town addresses will be slightly more, depending on how many are mailed to the same 3-digit ZIP prefix.

The best rate for a postcard is $.257 per piece, but you have to be using CASS certification software to be eligible for this rate. If you are just presorting by ZIP code, without using CASS certification software, the rate is $.28 per postcard. And if you’re not presorting at all, you’re paying the full rate of $.35 per postcard. For purposes of this illustration, let’s assume your software prints postcard bills in ZIP code sequence and that’s the only presorting you’re doing. Here is the comparison between postcards and first class postage:

Difference in price alone

The above illustration shows nearly a 27% increase in postage cost for switching from postcards to full-page bills. What this doesn’t take into account is the intangible benefit of being able to present more information on a full-page bill and being able to include a return envelope.

Most outsource printers include a window return envelope which allows your return address, with barcode, to show through the window. If your customer mails their payment, the inclusion of a bar-coded return address speeds the processing through the postal sorting facility over a hand-addressed envelope that must have a barcode manually applied.

Labor savings

In addition to the intangibles, using an outsource printer results in very tangible labor savings in your office. Your staff no longer needs to attend to a printer printing bills or prepare the bills for mailing. This is all handled by the outsource printer.

Ebilling alternative

Another way to offset the increased cost of first-class postage is to offer ebilling and encourage your customers to request ebills rather than receiving a paper bill in the mail. For each customer who opts in to ebilling, you save not only the cost of postage associated with mailing their bill, but also the cost of the paper stock and envelopes.

If you can convince 27% of your customer base to opt-in to ebilling, the switch from postcards to full-page bills will result in no additional cost! Depending on the demographics of your customer base, this percentage is not unreasonable.

Need help deciding?

Are you trying to decide if moving to full-page bills or outsourcing your bill printing would be cost effective for your utility? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help inform your decision-making process.

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© 2019 Gary Sanders

Meter replacement tips

I’m in the midst of assisting several customers with the migration to an automated meter reading system. All of these customers are moving to AMI systems and, in so doing, are changing out all of their meters.

One topic that seems to come up with every meter replacement project, whether it’s done by outside contractors or the utility’s own staff, is how to manage the process so it doesn’t interfere with billing.

I’ve written about this previously as part of a post about several things to consider when transitioning to an automated meter reading system. However, it’s an important enough topic to dedicate an entire issue to it.

When to start

The ideal time to start changing meters in a route is as soon as that route has been read and any re-reads have been completed. The goal is to have the entire route (or as many meters as possible) changed out before it’s time to read the route for the next billing period.

If all the meters in a route haven’t been replaced before reading again, this means having to read parts of the route two ways – the replaced meters with the new technology and the existing meters with the old process. From an operational efficiency perspective, this is clearly not an efficient use of your meter readers’ time.

Move new meters to a new route

Even if you expect to replace all the meters in a route before reading that route again, I still recommend moving the meters to a new route as they are replaced. For example, if you have routes 1 through 20, consider adding 100 to the route number as the meters are replaced. This way, you can always tell meters in route 120 were originally in route 20.

By doing so, it’s as simple as running a report of the original route number to determine which meters still need to be changed out. And, if you do have to read the route using both old and new technology, the meters are easily identified for each reading process.

Once all of your meters have been replaced, you can change the route numbers back to the original route numbers.

Is it time for an automated meter reading system?

Are you trying to determine if an automated meter reading system will be cost effective for your utility? Or have you made the decision to move forward and need assistance managing the project? Either way, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help.

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© 2019 Gary Sanders

Happy New Year 2019!

Happy New Year 2019! With Christmas and New Year’s Day both falling on Tuesdays this year, welcome to a Wednesday surprise on your first day of work in the new year!

This issue marks the eighth anniversary of the Utility Information Pipeline. If you’ve been with me from the very beginning (and many of you have!), this is the 194th issue you’ve received!

In the beginning, I had all kinds of ideas for topics for future newsletters. Now, eight years later, inspiration for new content isn’t as easy to come by. Many times, a conversation with a customer, a prospect, or a recent listserv post will serve as the source for a newsletter. Other weeks, the ideas don’t come so easily. With that in mind, I’m always looking for new ideas to write about so, if you have ideas or suggestions for a future topic, please feel free to email me!

If you have co-workers or colleagues from other utilities you feel would benefit from reading this newsletter, please take a minute to forward this to them and encourage them to subscribe.

Looking back on 2018

2018 marked the completion of the second bi-annual Utility Staffing Survey. The Utility Staffing Survey, like the Utility Fee Survey in odd number years, has become a regular feature in even numbered years.

If you want a quick refresher, here are links to the two results issues from the Utility Staffing Survey.

In 2018, I updated my personal website – www. garysandersonline.com. This includes the Days of Exposure Calculator which has proven to be a valuable resource for utilities to determine if their security deposit is sufficient.

Listed below are the top five most frequently viewed blog posts in 2018, regardless of when the post was published:

  1. How much is your late fee?
  2. What are these barcodes on my bills?
  3. What is your leak adjustment policy?
  4. Do you have a cash handling policy?
  5. What’s a compound meter?

Here are the top five posts published in 2018:

  1. Are you tracking non-revenue water?
  2. Calculate your days of exposure
  3. 2018 Utility Staffing Survey Results – Part I
  4. How do you justify an automated meter reading system?
  5. Do you separate your base charge…?

Looking ahead to 2019

This year will include the 2019 Utility Fee Survey which will be the fourth survey of the various fees utilities charge. Previous Utility Fee Surveys were completed in 2012, 2015, and 2017.

2019 will also mark the 200th issue of the Utility Information Pipeline, so I’ll try to come up with something special for that issue!

Is this a good time to consider a business review?

When things in your office slow down a little is sometimes the best time to conduct a business review. If you’ve been considering a business review as an internal check-up, or would like to know more about what you could gain from a business review, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to discuss it.

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© 2019 Gary Sanders