An Enterprising Endeavor

Despite property taxes being on the rise virtually everywhere, local governments are finding it harder and harder to make ends meet. Some cities, such as Inglewood, Calif., however, are marketing and selling their services to similar entities using a government-to-government contractual relationship.

Since the early ’80s, the city of Inglewood has provided citation management services to other municipal agencies. The Information Technology and Communications (ITC) Department’s Enterprise Services Division processes more than 2.2 million parking citations per year for more than 80 agencies around the state. Across the country, we also serve the Dallas/Fort Worth International Airport. This private- sector business housed in a municipal body nets the city more than $350,000 a year and provides a cost-effective service to other municipal agencies.

Contracting the Service

Though the business model is now flourishing, in early 2006, the city faced a serious challenge. The ITC department began an in-depth strategic assessment of the parking citation processing enterprise because the mainframe system in use cost far too much to maintain. Developing a new citation processing system would run an estimated $1.5 million, and new server gear to replace the decommissioned mainframe would cost an additional $300,000.

Other concerns included the city’s ability to attract new client agencies and the need to improve system backup and disaster recovery capabilities. The most cost-effective and timely course of action was to contract with a service provider that offered a hosted system as well as technical and operational support. This alternative wouldn’t require an expensive capital investment or consume staff resources to develop a new system.

Getting buy-in from the city administrator was easy enough — the challenge was conveying the depth and complexities of the issues to the city council, which we accomplished through a series of memos, meetings and discussions. Fortunately, we obtained the approval to move forward, as the alternative would have been to give notice to all our clients and exit the business entirely except for the fact that the city of Inglewood (a de facto customer) had parking citations to be processed.

In September 2006, the city began procurement to select the most qualified and best-priced package using a comprehensive request for qualifications and second-phase request for proposals methodology. The process entailed system demonstrations, written project plans, interviews of key management and staff, and reference checks. We hired a consultant with public/private expertise to assess the bidders’ capabilities and their respective systems. Overall, there were six responses to the RFQ, and we invited two companies to participate in the RFP process, system validation and negotiations. This procurement process and contract negotiations took about a year and $150,000 in consultant and staff time.

Last March, we chose to deploy a hosted citation processing system from a large provider. This new system provides not only a more up-to-date technology platform but also improved performance and reduced operating costs.

The system runs on Windows-based servers in its processing centers, and users access it on desktops using Citrix Metaframe XP. Agencies connect to the application via the Internet, avoiding the use of expensive leased lines and slow dial-up connections. Clients don’t need to buy and support the software, making our service more cost effective.

Everyone Benefits

Because we handle so many parking citations, our buying power lets us charge an extremely competitive price to individual agencies. Pricing is dependent on an agency’s annual citation volume and what services they choose. For example, clients with 10,000 to 50,000 citations per year pay about $1.50 per citation for our processing service. Clearly, as the volume goes up, the price per citation goes down. Optional services include postcard notices including postage (34 cents each), customer-service call center (22 cents per citation), and payment processing including data entry (40 cents per citation).

Using this model, it’s possible for an agency to save from 15 percent to 25 percent of what it would cost for that agency to process its own citations. What’s more, those agencies save significant time because we manage the service provider for them.

The city of Torrance, Calif., is one such customer. “[Inglewood has] consistently delivered great service and support, making the government-to-government business model very worthwhile,” says Linda Barnett, city treasurer for Torrance. “We are excited to have a modern state-of-the-art system, and having a similarly situated local government agency like Inglewood with more than two decades of experience to manage, maintain and administer the solution is highly beneficial to us.”

Rollout Close to Completion

We began planning the rollout to every Inglewood client agency in April and aim to wrap it up early this year. Instead of handling everything in-house as we used to for our clients, we’ve become the contract administrator. We monitor the service provider’s performance and offer best practices advice and guidance, consulting services, and a host of other benefits.

The new relationship with our service provider faciliated development of a comprehensive business continuity and disaster recovery plan. These improvements were not economically feasible using the in‑house mainframe system and limited city staff resources.

Upon completion of the implementation of the hosted citation processing system, the city will be in a position to terminate the current mainframe-based citation management system, saving significant maintenance and operating expenses of almost $30,000 per month.

The city receives discounts on parking enforcement equipment, such as a wide variety of parking meters and handheld citation processing equipment. We reap an administrative service fee of 2 percent to 5 percent on equipment purchased by other public agencies under terms of the agreement.

Finally, part of this co-source relationship we call Inglewood Citation Management Services powered by Duncan Solutions involves participating in sales and marketing activities, such as responding to RFPs, working trade shows together, and making visits to prospective customers. New customers that come into the consortium bring additional profit to the city.