Service Line Agreements A Tale of Two Cities. Joey Murphy Columbus Water Works Melinda Langston City of Atlanta

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1 Service Line Agreements A Tale of Two Cities Joey Murphy Columbus Water Works Melinda Langston City of Atlanta

2 A National Perspective

3 Water Research Project 4171

4 Water Research Project 4171

5 Service Line Warranty Program Atlanta, Georgia Melinda Langston Director, Water Conservation May 2009 Strictly Confidential

6 The NLC Service Line Warranty Program, administered by Utility Service Partners, Inc. (USP), is an affordable home protection solution for your residents offered at no cost to the city. It helps city residents save thousands of dollars on the high cost of repairing broken or leaking water or sewer lines.

7 Mayor Kasim Reed and the City of Atlanta announced on September 1, 2011 the launch of the National Leagues of Cities Service Line Warranty Program, which could save residents thousands of dollars in unexpected repair costs for broken or leaking sewer and water lines. Currently available Currently 47 states which include 118 cities have partnered with NLC Utility Services Partners Inc. Available no later than Fall of 2012

8 Benefits No cost for the city to participate Generates revenue for the city Affordable rate for the residents of the city 24/7 customer service Create jobs for local contractors Easy implementation of program All repairs performed to local code Building community relations

9 No cost for the city to participate Not a cent. USP pays for all marketing materials and program administration. Furthermore, USP will pay the city a royalty for every resident that participates in the program!

10 Generates revenue for the city These programs generate extra revenue for the city through the royalty that is paid by USP to the city. Amount $49, $50, $45, $40, $35, $30, $25, $20, $15, $10, $5, $- $- $ $29, $9, $4, nd quarter rd quarter th quarter st quarter nd quarter 2012 Total *Denotes a contribution to the Care and Conserve Fund based on an incremental royalty payment for the co-brand relationship between the city of Atlanta and Service Line Warranties of America (SLWA).

11 New Revenue to Atlanta s Affordability Program $95,000 (Nov 2011 May 2012)

12 Affordable rate for the residents of the city Each warranty is sold separately and the price range is generally between $4 and $5 a month per product. While costs for water line and sewer line repairs can vary, the average cost of repairing a broken water line or sewer line may range from $1,200 to over $3,500.

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14 24/7 customer service Will a citizen have a long hold time when reporting a claim? No. Repair calls receive the highest priority and are answered 24/7. Repair calls are connected to a live agent through a voice recognition unit (VRU). Will the customer always get a live operator when they call? Yes. Customers are directed to select to speak with either a service or claims agent and will then be directed to a live Agent.

15 Create Green jobs for local contractors USP retains local, professional plumbers to perform all the service line repair work. 12 local Atlanta plumbers have done work and have been paid by Utility Service Partners a total of $265,473.36

16 Easy implementation of program Once your city has approved participation in the program, start up is simple. The program is designed for a quick launch, taking up little of your city employees' valuable time: Execute the simple, one page contract provided by USP. Approve the recommended Press Release (this is designed as a general notice to reduce resident confusion and calls to the city with questions). Approve the Campaign Letter provided by the USP Marketing team. Access monthly reports via the web.

17 Building community relations By endorsing the USP programs, the city is able to reduce resident s frustration over utility line failures by bringing them low-cost service options. 96% of survey respondents say that their image of the city is enhanced because the warranty program is offered as a service by the city Product 2nd Quarter rd Quarter th Quarter st Quarte r nd Quarter 2012 Total warranties purchased * Sewer Water Total ,095 *(per product) since the program s inception with the City of Atlanta

18 Columbus Joey Murphy Columbus Water Works

19 Columbus- How We Started Columbus started investigating service line agreements in early 2006 One of our Strategy Teams developed a Performance Work Plan (PWP) to thoroughly investigated ALL alternatives related to service line agreements Alternatives Included: 3 rd Party Provider (Utility Becoming Billing Agent) Self-Administered (Utility Hiring the Plumbers) In-House (In-House Staff Performs All Functions)

20 Columbus- Testing the Market A random sample of our customers (+/-800 total) was performed over a one year period to determine if they would likely participate in this type of service 10% Definitely 15-20% Potentially/Might In addition to our internal survey, we talked to several other utilities throughout the Country to benchmark their saturation rates which ranged from as low as 5% to as high as 30%.

21 In addition to our own surveying ALL the major 3rd party player have been testing the market. Along with soliciting Columbus Water Works along with the City of Columbus.

22 Some More Aggressively that Others (April 2012)

23 So what did Columbus Decide to Do? At this point, Columbus is not pursuing partnering with any 3 rd Party to provide service agreements for customer service laterals (water or sewer) Columbus is also not entertaining providing this service in-house either via through internal oversight and/or with internal forces

24 Reasons for the Decision Potential Damage to Reputation of Utility Liability Concerns (Private Property Issues) Reliance on 3 rd Party Performance Customer Acceptance & Trust Resistance from Private Sector

25 Benefits You Might Expect Potential improved Customer Satisfaction Potential Community Benefits Slight enhanced revenues Water Quality Improvements (water loss reductions)

26 QUESTIONS