HomeMy WebLinkAboutContract for Phone, Data and Utility Billing Audit, Troy & Banks Utility and Telecommunication Consultants.pdf Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Finance Director
Chris Kukulski, City Manager
SUBJECT: Authorize City Manager to Sign Contract for Phone, Data, Utility Billing
Audit with Troy & Banks Utility & Telecommunication Consultants.
MEETING DATE: July 18, 2011
AGENDA ITEM TYPE: Consent Item
RECOMMENDATION: Authorize City Manager to Sign Contract for Phone, Data, Utility
Billing Audit with Troy & Banks Utility & Telecommunication Consultants.
BACKGROUND: A number of companies offer services to local governments (and other
businesses) where they perform audits of the bills you receive from phone, data, and power
utilities. The City last had such an audit approximately 10 years ago. These companies check to
make sure that every the phone and data lines is operable, that the billing rates and tariffs are
correct for local governments, and analyze account/line usage and structure to make sure that we
are receiving the best rates and offers from our vendors.
One of the reasons this work is desirable stems from the fact that utility billing is often as
complicated as medical billing – it is very difficult for a large customer to understand all of the
state laws, tariffs, and billing terminology. We attempt to correct billing errors whenever we
detect something, but we believe an expert consultant can assist us.
It is industry practice that these companies perform their work and analysis on a contingent fee
basis. They charge their customers nothing, unless they are able to gain their customers a refund
for past over-billing, or recommend different account structures that are cheaper than our current
fees.
We issued and advertised a Request for Proposals for this work. We received three offers. All
of the offers proposed to be compensated through a contingent fee, based on whatever refunds or
savings the City receives as a result of their work. If we receive nothing, they are paid nothing.
This proposal had the lowest fee proposed: 29% of the amounts credited or refunded to the City
will be paid to the contractor, and 29% of the value of any future price reductions (savings) will
be paid to the contractor for a period of 12 months after the audit is completed.
In summary, the City will receive a no-cost audit, and will benefit by retaining 71% of any
refunds or credits received, and 71% of any price reductions for the first 12 months, and 100% of
any price reductions for the period after 12 months.
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UNRESOLVED ISSUES: None.
ALTERNATIVES: We could choose one of the other proposals, or decide not to have the
audit conducted at all.
FISCAL EFFECTS: Signing this contract may result in refunds, credits, and reductions in
service costs for certain phone, data, and utility services. If such refunds or reductions are
received, the contractor will receive a share of the credit or savings, according to the terms of the
contract.
We have no estimate of how much money may be received or savings derived from the audit.
Attachments: Troy & Banks Agreement
Report compiled on: July 7, 2011
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