Purpose of Report: To review the performance agreed to under the original contract with Technical Programming Services, Inc. of Tulsa, OK after 18 months for possible renewal for a new 18 month period.

Background: In June of 1999, the City of Stillwater entered into a contract with Technical Programming Service, Inc. (TPSi) to provide mailing service for the City's Utility Bills. The original contract was for an 18 month period which would continue for succeeding like 18 month periods, unless terminated by either party 90 days before the end of the term or extension then in effect. TPSi has provided city staff with an addendum for review by the city which covers three items which will have a minimal effect on our total costs of service.

Discussion: At the time of the original agreement, city staff informed the commission that they would be provided a review of the performance by the company before a new contract period began.

Technical Programming Services, Inc. has provided the city continual, consistent, reliable and professional services since day one of the contract. City staff and TPSi staff have an excellent working relationship. TPSi has been very responsive to our requests to tweak programming and customize our bills and have they have been very proactive in suggesting ways to save the city money on our fees. Many times the staff have made programming changes to accommodate updates to our software that affect our print files, at no additional cost to the city. We are always aware of any potential situation that may affect our overall costs such as the cost of paper and/or envelopes and proposed postal increases.

The addendum the firm has presented details three items two which will increase our costs and one which will actually save the city money. The first item is notice that the United States Postal Service will more than likely increase the rates for first class postage in January of 2001. The firm actually notified the city of this possibility months ago and staff has already budgeted for this increase. The second item is a $0.005 increase per item for the cost of mail insertion (folding, inserting, sealing, metering). The third item covers some programming changes that are being performed to utilize bar codes on our bills in order to not include return envelopes to our ACH customers because they are unnecessary and to be able to drop internet bills into the same envelope with the customers utility bill. This programming is being done free of charge and will save the city $0.02 per remittance envelope for the ACH customers (between 500-600 customers) and the cost of a full item for each internet bill.

In addition the firm is working with staff for other programming changes which will benefit both the firm and the city at no cost that will allow for further savings on paper and printing costs.

Utilizing the services of this company has saved the city approximately $22,000 per year compared to our prior service and we continue to find ways to reduce costs or at a minimum to not increase them. We expect the service from this firm to continue to be of the highest caliber.

Budget Impact: This item requires no new appropriation or budget amendment and should not affect year-end projected balances. Due to the advance notice and communication with the company, possible increases are already included in the amounts budgeted for this fiscal year.

Alternatives:

1. Approve continuation of the contract with acceptance of the addendum.
2. Do not approve the contract.

Recommendation: Staff highly recommends alternative #1.

Recommended by:

___________________________

Carl Weinaug

City Manager

October 30, 2000

Marcy Alexander

City of Stillwater - Finance Department

PO Box 1449

Stillwater OK 74076-1449

Dear Marcy,

On behalf of TPSi, I would like to thank you and the Stillwater City Board for the opportunity to work with you over the past 16 months to print and mail utility statements for the City of Stillwater. I believe the agreement has been beneficial to all parties involved, including your customers, the citizens of Stillwater.

As we come upon the renewal time for the contract, there are three changes that will affect pricing that should be noted and set forth for mutual agreement:

1. Postal rates will likely increase by one cent ($ 0.01) for first class mail in January 2001. TPSi will CASS certify and PAVE sequence your mail to qualify it for the lowest possible USPS rates available. As always, TPSi only invoices for actual postage used.
2. The cost of Mail Insertion (folding, inserting, sealing, metering) will increase from $ 0.03 per piece to $ 0.035 per piece.
3. TPSi will modify it's programming (free of charge) to begin selective inserting of remittance envelopes. This will allow the City of Stillwater to save on the cost of approximately 500 - 600 envelopes per month for customers who pay by ACH. Current cost of remittance envelopes is $ 0.02 each.

With the exception of these noted changes, the original contract remains active as is.

TECHNICAL PROGRAMMING SERVICES, INC.