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AUTHORIZE CONTRACT WITH KUBRA AMERICA WEST, INC. FOR UTILITY BILL PRINTING AND MAILING SERVICES
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to authorize the City Manager to execute a contract with KUBRA America West, Inc. for utility bill printing and mailing services.
It is also recommended that the motion authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
The City annually generates over 1.2 million pages of utility bills, delinquency notices, final termination notices, and miscellaneous accounts receivable invoices. Because this volume is quite high, and specialized equipment is required to produce the various documents, the City contracts for printing and mailing services as a cost-effective means of performing the services. The total estimated annual contract cost of $675,000 includes the costs for printing, paper, envelopes, mail handling and postage. The annual cost of printing, paper, envelopes, and mail handling can vary depending on volume of specific units, but for the FY 2017-18 is estimated to be $115,000. The estimated $560,000 cost of postage is a pass-through and the City will reimburse KUBRA for actual costs.
The work plan and complete implementation for utility bill mailing and printing services are estimated to be 90 days.
DISCUSSION
Background
Since 1998, the City has contracted for with Pre-Sort Center of Stockton, Inc. for document laser printing and mailing services. The current contract expires November 30, 2017. The contract cost with Pre-Sort of Stockton for printing and mailing services has been approximately $660,000 annually for the past two fiscal years.
The City seeks an integrated service that provides the latest document production and distribution capabilities at a competitive price.
Present Situation
On April 6, 2017, the City released a Request for Proposals (RFP) for Utility Bill Printing and Mailing Services (PUR 16-034). The RFP process ensures the fair and competitive procurement of services for the City.
The City received six proposals from interested firms. The City’s selection committee invited the three most responsive and qualified firms to be interviewed, which did not include the current vendor. These three firms were rated based on their experience, breadth of service, customer service, stability, interview, and pricing. The selection committee rated KUBRA as the most qualified vendor to provide utility bill printing and mailing services to the City.
In meeting and exceeding the scope of services as required in the RFP, the contract with KUBRA includes:
• Document Processing, Printing, and Mailing - KUBRA will provide high-speed simplex or duplex printing, folding, and insertion; mail finishing and postal service; and, web-based tools for tracking and management.
• Online Production Monitoring Portal - Allows for real-time tracking and management of the entire document production print/mail process via web-based process monitoring tools.
• Postal Processing Optimization - KUBRA delivers advanced postal processing capabilities including return mail management, real-time NCOA updates, and advanced hygiene processing.
• Document Redesign - Experienced design consultants will redesign the bills using best practices and up-to-date communication strategies.
• Disaster recovery - Multiple print centers will ensure continuous uninterrupted service.
• Pre-sort - Mail will be pre-sorted to ensure the highest percentage of 3 and 5 digit pre-sort pieces for discounted postage rates.
With Council approval, the City Manager will execute a five-year contract with KUBRA America West, Inc. for utility bill printing and mailing services.
FINANCIAL SUMMARY
The KUBRA contract is based on per unit pricing. Units can vary by mailing and by customer and can include paper, printing, return envelopes and inserts. The annual cost of this service, including postage, based upon existing volume, is expected to increase by less than 3 percent despite the improved technology and services that KUBRA will provide.
The Municipal Utilities Funds and the General Fund are used to pay for these services in proportion to the volume of each funding source. The total contract costs, including postage, will be approximately $675,000 based on current volumes and postage rates. Appropriations sufficient for these services and anticipated costs are included in the FY 2017-18 Adopted Budget of the Administrative Services Department, Revenue Services Division (010-1331) for $36,000, and the Municipal Utilities Department, Utility Billing Divisions (498-1350 and 498-1351) for $639,000. No additional appropriation is needed for these contract services.
Attachment A - DRAFT Professional Services Agreement with KUBRA America West, Inc.