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HomeMy WebLinkAboutItem 8.6 E-Commerce ClassSoftwaFile # 350-20 CITY CLERK AGEN DA STATEMENT CITY COUNCIL MEETING DATE: December 17, 2002 SUBJECT: E-Commerce Project Report by Paul McCreary, Parks and Community Services Manager ATTACHMENTS: Resolution authorizing waiver of competitive bidding process and authorizing issuance of purchase order for e-commerce and point of sale software. RECOMMENDATION: Adopt resolution authorizing waiver of competitive bid process and horizing issuance of a purchase order to Class Software Solutions e,commerce and point of sale sof~are, including project planning, installation and training, at a price not to exceed $29,655. FINANCIAL STATEMENT:' The cost of services provided under this purchase order is $29,655. Adequate funding is included in the Fiscal Year 2002-2003 Capital Improvement Program Budget. DESCRIPTION: The City Council adopted a high priority goal to investigate the feasibility of implementing an e-commerce project for citizen use of City services. This would allow citizens to do business with the City from their home or office and at their convenience. Residents would be able to use the Internet to register for recreational classes and programs and pay for other City services. An E-Commerce Task Force, made up of employees from Finance, Information Systems, Parks and Community Services and the City Manager's office, has completed a feasibility study and developed a project plan and timeline for the Council's consideration. As part of the research, Staff surveyed over 15 other cities that accept credit Card payments and have an e-commerce program. Following is a summary of the Task Force's research and recommendations. Acceptance of Credit Cards Currently customers must pay for City programs and services with cash or check. A large number of the City's customers find this to be an inconvenience. Staff regularly receives requests from customers to accept credit card payments, which would be especially helpful when paying for facility rentals or summer camp programs and the amount due can exceed $750. To implement an e-commerce program, the City would need to begin accepting credit card payments. Staff received a proposal from Bank of America, the City's banking institution, to provide the services necessary to authorize and process credit card payments. The proposal includes the fees that Bank of America would assess (Merchant Discount) for authorizing credit card payments and collecting the payments from the cardholder's financial institution and depositing them to the City's account. For VISA and MasterCard charges, Bank of America proposes charging the City 1.65% of each sale and $0.20 per transaction. After surveying other cities Staff believes this is a competitive rate. Staff recommends only COPIES TO: Class Software Solutions ITEM NO. ~ G:\COUNCIL~Agenda Statements',2002\l 2-17-02 E-Commerce Project.doc / ~- ~ accepting VISA and MasterCard since American Express and Discover charge merchants much higher fees. After surveying other cities, Staff estimates that an average of 60% of the City's transactions would be paid for by credit card. Based on the proposed fees from Bank of America,. if 60% of the Parks and Community Services Department's transactions were paid for by credit card then approximately $12,500 in new bank charges would be incurred during the first year. Staff anticipates offsetting this cost through increased registration for programs due to the convenience of the new credit card and e-commerce programs. To put it in perspective, the Parks and Community Services Department would need to increase business by 1.4% to offset the bank charges. Staff explored the possibility of charging a convenience fee to customers who pay by credit card, however the agreement with the credit card company prohibits the City from charging a surcharge for using a credit card. Staff had understood that the Dublin San Ramon Services District (DSRSD) charges credit card customers an additional fee. However this is due to the fact that DSRSD has contracted with a third party to process credit card payments and therefore the customer is paying a processing fee to the third party contractor. Staff would not recommend using a third party'contractor to process credit card payments because it would not integrate with the proposed e-commerce software. The first phase of the E-Commerce Project is to begin accepting credit cards in April 2003 for programs and services provided by the Parks and Community Services Department. Acceptance of credit card payments in other departments would be phased-in during Fiscal Year 2003-2004. Prior to implementation Staff will develop an Administrative Policy for accepting credit card payments and provide the necessary training for the affected employees. The purpose of the Policy will be to identify the types of services for which the City will accept credit card payments and to establish procedures for accepting and reconciling credit card payments. Staff will design the Policy to protect the City and its customers from unauthorized credit card usage. E-Commerce The second phase of the E-Commerce Project would commence in May 2003 and would allow residents to register via the Internet for programs conducted by the Parks and Community Services Department, with the exception of the Swim Center. Internet registration for Swim Center programs would begin during the following swim season in Spring 2004. E-Commerce solutions for other departments and facilities would be implemented in future phases of the project. The Parks and Community Services Department currently uses software developed by Class Software Solutions to process participant registration and book the City's fields and facilities. The same software developer has an "E-Connect" module that is compatible with the Department's current software and database. The E-Connect software allows residents to browse the City's recreational program offerings, check availability and register for programs. Implementing the E-Connect software would not change the Department's quarterly registration timeline, which is as follows: lst Week of Quarter Internet, Mail-In and Drop-Off registration begins for Dublin residents. 2na Week of Quarter Internet, Mail-In and Drop-Off registration begins for non-residents 3ra Week of Quarter Walk-In registration begins for everyone. Dublin residents will still receive one week of priority over non-residents as has been the past practice of the City. Those registering via the Internet would be immediately accepted into programs and receive an electronic confirmation. Registrations that are dropped-off or received in the mail during the first two Page 2 of 5 weeks of the quarter would be batched daily and processed by the office staff within 3-5 working days. Therefore, those who are registering via the Intemet have an advantage over those who are using other methods for registration. Self-Service Kiosk One of the Task Force's primary goals was to make Intemet registration accessible to as many residents as possible. It is not equitable for those with Internet service to have an advantage over other residents, especially when someone without Internet access is repeatedly unable to attend a popular program. After surveying other cities, Staff found many communities have provided self-service kiosks at public facilities to equitably provide access to City programs and services via the Internet. As part of the second phase of the project Staff proposes purchasing a self-service kiosk that is ADA accessible for placement at the new Library. The kiosk and related software would cost $7,575. The kiosk provides additional safety measures that are not provided by the regular computers used in the Library for Intemet access. The system requires swiping a credit card rather than just entering the credit card number to ensure the person making the transaction is the actual cardholder. The kiosk software also reduces the risk of identify theft by preventing users from viewing the personal information of customers who have used the kiosk. Placing the kiosk at the Library will also create significant awareness in the community of the availability of Internet registration and increase use of the system. System Security One of the Task Force's primary goals is to establish a safe and secure system that can be trusted by customers. Staff will highlight the safety of the software in the marketing of the system to encourage use by residents. The E-Connect module uses Verisign and ICVerify technology to safely transfer and process customer data. This trusted connection meets industry standards for safe e-commerce transactions. Anyone can browse the system, but in order to register for a program the customer must establish an account and password. This is accomplished by providing the City with customer contact information and a valid e-mail address. The information can be submitted via the Internet, phone or mail. Once the customer's contact information is input into the database, the system sends the customer an e-mail message with a temporary password. This prevents any internal abuse of the system because the operators never know the temporary or permanent passwords for customer accounts. If customers forget their password they must establish a new one using the same process initially used to establish the account. Marketing Another primary goal of the Task Force was maximizing use of Internet registration by residents to increase the return on investment made by the City. Therefore Staff proposes using $2,640 (4%) of the project budget for implementing a marketing campaign to "roll-out" the system. The marketing campaign will include the following components: Development of a unique, catchy, easy to remember name and logo for the registration system and web address. · Promotion in City's Activity Guide and on the City's website. · Fliers distributed to all youth in Dublin public schools, inserted with registration confirmation mailings and distributed during City programs. · Colorfulpostcards mailed to residents who have registeredforprograms within the past two years. · Messages on the marquees at Shannon Park and Dublin Auto Center. · Press releases and a Press conference featuring a local dignitary using the new system. · To encourage residents to establish an account and familiarize themselves with the system, thefirst 500 residents to establish an account will be eligible for a drawing for prizes. · Booth at St. Patrick's Day Festival with forms to establish accounts and distribution of a novelty item featuring system name, logo and web address. Page 3 of 5 Request for Waiver of Competitive Bid Process There are other e-commerce software packages on the market, however they would not fully integrate with the City's software. It would also not be cost effective to purchase new registration and facility booking software. The City has akcady invested in the capital cost of this software and thc staff time spent installing, training and entering data on thc ,existing software. In most cases the City's Purchasing Ordinance requires that major purchases be subject to the competitive bid process. However, the Dublin Municipal Code states that the City Council can waive the bid process when the City's requirements only can be met solely by a single patented article or process. Because the E-Connect software developed by Class Sol,rare Solutions is the only product that will fully integrate with the City's current registration software, Staff recommends the Council waive the competitive bid process and authorize the issuance of a purchase order to Class Software Solutions. Fiscal Analysis Capital Outlay The 2002-2007 Capital Improvement Program (CF) includes $64,595 for implementing the project in Fiscal Year 2002-2003. As shown on the first page, Staffwill implement the project over two fiscal years and therefore only $46,875 of the CI? budget will be spent during Fiscal Year 2002-2003. Staff estimates the actual capital investment over the two fiscal years will be $64,260. A breakdown of the capital costs is shown below: TABLE 1 - ESTIMATED ACTUAL CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET PROJECT COMPONENT FY 02-03 FY 03-04 TOTAL Credit Card Acceptance $2,155 $1,075 $3,230 Bank Service Charges for first Fiscal Year $3,760 $0 $3,760 Communications for first Fiscal Year $360 $0 $360 Internet Registration Software & Consulting* $24,240 $0 $24,240 Internet Registration Hardware $2,355 $0 $2,355 Shannon Community Center Point of Sale (POS)* $1,895 $0 $1,895 Civic Center POS* $1,895 $0 $1,895 Library Kiosk $5,950 $0 $5,950 Library Kiosk Software* $1,625 $0 $1,625 Swim Center Network Connections $0 $750 $750 Swim Center POS, Registration & Member Mgmt. $0 $15,560 $15,560 Marketing $2,640 $0 $2,640 Total Estimated Actual $46,875 $17,385 $64,260 Project Budget $64,595 $0 $64,595 Under (Over) Budget $17,720 ($17,385) $335 *Indicates items to be included in the proposed purchase order to be issued to Class Software Solutions. Operational Costs In addition to the initial capital outlay, it is estimated implementing the project will increase operational costs. Following is a summary of the estimated impact on the operational budget: TABLE 2 - ESTIMATED ACTUAL ONGOING OPERATIONAL COSTS DESCRIPTION FY 02-03 FY 03-04 Software Maintenance Fees $0' $7,250 Network/Telephone Communications $0' . $3,045 Bank Service Charges $0' $12,420 Total Estimated Actual $0' $22,715 *The estimated operational costs for FY2002-2003 will be absorbed by the CIP Budget and are included in Table 1. Funds for future operational costs will be included in the appropriate departmental budgets. Page 4 of 5 Staff estimates the Parks and Community Services Department would need to increase revenue by an average of 3% in order to offset the additional operational costs. Staff surveyed other cities and found that most experienced an average of a 20% increase in business when the city began accepting Internet registration. Staff is also proposing installing Point of Sale Software that will eliminate the duplicate data entry currently being performed by employees in the Parks and Community Services Department. Staff currently enters program registration data into the recreation software and the City's finance software. With over 12,000 transactions per year this Will provide significant savings of Staff time. Conclusion Intemet registration will have an enormous impact on the City's ability to serve existing customers, and to attract new ones. After surveying other cities using Internet registration Staff found that many communities have already reported that as much as 60% of all registrations are processed through the Internet. By redirecting customers to the e-connect website or kiosks the City will realize some savings in staff time and operational costs. An added bonus to implementing acceptance of credit card payments and Internet registration is it will give the City the ability to improve upon the already outstanding service that is provided to the residents. Class Software Solutions will be raising prices by 17% on January 1, 2003. Therefore, time is of the essence to issue a purchase order for the software. If the city defers approval of the software purchase it would cOst an additional $6,000 this Fiscal Year. RECOMMENDATION: Adopt resolution .authorizing waiver of competitive bid process and authorizing issuance of a purchase order to Class Software Solutions for e-commerce and point of sale software, including project planning, installation and training, at a price not to exceed $29,655. Page 5 of 5 RESOLUTION NO. - 02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN AUTHORIZING WAIVER OF COMPETITIVE BID AND AUTHORIZING ISSUANCE OF PURCHASE ORDER FOR E-COMMERCE AND POINT OF SALE SOFTWARE FROM CLASS SOFTWARE SOLUTIONS. WHEREAS; Section 2.36.050(a)(2) of the Dublin Municipal Code provides that the competitive bid process shall not apply when the City's requirements can only be met solely by a single patented article or process; and WHEREAS; the City Council adopted as a high priority goal to investigate the feasibility of implementing an e-commerce project for citizen use of City services; and WHEREAS; the only e-commerce software that will fully integrate with the City's current registration software and database is developed by Class Software Solutions; and WHEREAS; other cities utilizing the same e-commerce software are extremely satisfied with the product and the manufacturer's customer service. NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Dublin does specifically waive the competitive bid process pursuant to the Dublin Municipal Code Section 2.36.050(a)(2) and authorizes Staff to purchase e-commerce and point of sale software, including project planning, installation and training costs, at a price not to exceed $29,655 from Class Software Solutions PASSED, APPROVED AND ADOPTED this 17th day of December, 20021 AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk Page 1 of l ATTACHMENT I