ISSUE PAPER #3
BILLING OPTIONS
Issue
Once funding source(s) and the associated customer base have been
determined, the new county service district must turn to the practicalities of
billing for, collecting, and accounting for its revenues.
This paper analyzes potential processes and partners for billing and then
provides a recommendation based on that analysis.
Alternatives
Available options for billing depend on the revenue sources involved.
Property tax revenues—whether from a permanent rate or an operating
levy—are billed by the county tax collector. In Lane County, this is the
Assessment & Taxation Department.
To the extent that the district imposes user charges, it must decide between
developing an in-house billing capability or contracting this function to an
entity that already has such a capability.
We focus on this decision in the analysis below.
Analysis
Lessons Learned in Clackamas County
Because Clackamas County is the pioneer in using county service districts for
stormwater management, we spoke with Doug Waugh, Financial Services
Manager for Water Environment Services. He described some financial
lessons learned:

Use assessor data. A stormwater utility is unlike water and sewer
utilities in the sense that there are no connections and no requests to start
service. The utility must proactively account for all its customers and
their properties. The assessor has the best data for that purpose.

Have a deliberate communications process. Customers of a new
stormwater utility should be (1) notified well in advance of any billing
and (2) given an opportunity to challenge the utility’s computations. The
assessor is the best single source of data available, but those data are not
always clear, current, or even correct.

Decide if in-house billing is economical. The county service districts in
Clackamas County created an in-house billing operation from the
beginning, and they use software from Tyler Technologies
(www.tylertech.com) to support that operation. An important factor in
choosing in-house billing was the fact that the districts also bill for
wastewater. Waugh speculated that billing for stormwater only might be
accomplished more economically on a contract basis.

No new districts. Waugh was unaware of any current efforts in Oregon
to create new county service districts for stormwater.
In-House Billing
Although the County has a robust e-commerce capability
(ecomm.lanecounty.org), the organizational infrastructure required for largescale utility billing can be found only in the Assessment & Taxation
FCS GROUP
1
www.fcsgroup.com
Lane County
ISSUE PAPER # 3 –BILLING OPTIONS
09/29/2011
Department. Certain assessments that are not related to property tax can be
collected by the county assessor under Oregon law. However, the list is short
and does not include any charge that can be imposed by a county service
district.
Therefore, any in-house billing capability would have to be developed from
scratch. For a stormwater-only utility, the cost of this capability is likely to
be a high percentage of the revenue requirement.
Contract Billing
The alternative to in-house billing is contracting with a third-party billing
agent.
Depending on the service area to be billed, one organization that might be a
good fit for this role is the Eugene Water and Electric Board (EWEB). The
City of Eugene has a long history of contracting with EWEB for the billing of
the City’s wastewater and stormwater customers. Currently, EWEB’s fee for
this service is $1.17 per bill per month (a reduction from the previous year’s
fee of $1.22 per bill per month). This fee is based on a three-year average of
EWEB’s actual costs. The fee’s basis in cost of service suggests that it is
meaningful as a ballpark estimate of the price that a county service district
might expect.
Another possible partner is the City of Portland’s Revenue Bureau. Although
the Bureau’s primary responsibility is the collection of taxes and fees for the
City of Portland, it also provides contract billing and collection services. Its
most notable customer is Multnomah County, whose business income tax is
administered by the Bureau. The Bureau also had conversations with the City
of Eugene about administration of a proposed income tax (which was
defeated in May, 2011). However, the Bureau does not specialize in utility
billing as EWEB does.
This list of potential contractors is not intended to be exhaustive, but rather to
suggest that reasonable options are probably available.
All Billing Is Costly
Whether user charges are billed in-house or through a third party, a
stormwater-only utility should expect billing expenses to be a higher
percentage of the total revenue requirement than would be the case for a
utility that included water, wastewater, and stormwater systems. This is one
reason why a permanent rate property tax may be a good funding option.
Recommendation
FCS GROUP
To the extent that the proposed county service district depends on monthly or
bimonthly utility charges, we recommend that the County seek the
partnership of a third-party billing agent. If, on the other hand, user charges
are limited to one-time fees and/or system development charges, we
recommend in-house billing that leverages the County’s current e-commerce
capability.
2
www.fcsgroup.com