FIN 2018-09-05 Item 2D - Interlocal Agreement - Transfer of Surface Water Billing to King County

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Surface Water Billing Transfer to King County Proposal Cost / Benefit Analysis August 29, 2018 Estimated Savings Estimated increased capacity: (a) (b) (c) 2019 2020 Fiscal Technician, front counter cashier 25% $ 21,103 $ 21,787 Fiscal Specialist, utility billing 6% 6,430 6,622 Fiscal Coordinator, utility billing 6% 8,211 8,387 Other anticipated savings: Postage 5,000 5,000 Billing supplies 2,700 2,700 (d) Improved collections - estimated 20,000 20,000 Total Estimated Savings Estimated Cost (e) One-time setup fee (f) Annual charge: Per account fee based on 5,100 accounts 1% of revenue collected (g) More customers meeting low income / disabled threshold City King County Income Age Threshold Threshold $ 32,000 62 $ 40,000 61 Estimated increase at 10% of $11,000 current cost Net Estimated Savings (Cost) (a) (b) (c) (d) $ 63,443 $ 64,496 $ 105,624 $ 9,180 9,180 52,952 55,600 $ 167,756 $ 64,780 1,100 1,100 $ (105,413) $ (1,384) Surface water payments constituted 25%-26% of all cashiering transactions in 2017 and 2016. City will still bill for the 261 City owned parcels, the State owned roadways and the 15 condominium complexes in the City; the City will also continue collection efforts on the existing deliquent accounts. Approximately 5% to 10% time savings is projected and is valued based on the 2019 salary and benefit budget. Changes in parcel size and use will need to be evaluated for change in fee category; a new file will be delivered to King County each October 1st for billing in the forthcoming year. Approximately 5% to 10% time savings is projected and is valued based on the 2019 salary and benefit budget. Collections on foreclosed properties have ranged from $5,000 to $15,000 in recent years. Also, collection experience in general is expected to improve since taxpayers will be paying the surface water bill at the same time, and based on the same bill, as their property tax - often this bill is automatically paid by mortgage companies. The approximate number and value of deliquent accounts currently is 800-900 and $330,000 respectively. King County estimates the set-up fee to be between $47,413 and $105,624; a conservative amount is used in this estimate. The actual fee has yet to be calculated and the estimated reange is $1.50 to $1.80. The $1.80 fee per account is used in this analysis. The increase in surface water customers eligible for the discount and the cost of the discount is estimated at 10% of the current discounts. 45