HomeMy WebLinkAboutResolutions - 1986.07.10 - 10828MISCELLANEOUS RESOLUTION # 86203 July 10, 1986
BY: FINANCE COMMITTEE, DR. G. WILLIAM CADDELL, CHAIRPERSON
IN RE: ACCOUNTING DIVISION -ALIMONY - AUTOMATED LOCK BOX SERVICE
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS the Accounting Division, Alimony Unit is responsible for receipt
and disbursement ofchild and spouse support payments; and
WHEREAS the receipts have increased 32.7% over a three (3) year period,
from $52,000,000 in 1982 to $69,000,000 in 1985: and
WHEREAS an estimated 5,700 new cases are being added each year; and
WHEREAS the process of receipts and disbursements must continue in a
prompt and efficient manner; and
WHEREAS an automated lock box service is designed to process receipts in
a faster and more efficient manner than a manual receipt system as described
in Attachment A; and
WHEREAS the annual operating cost of the Automated Lock Box Service, once
in operation, will be $73,500;
WHEREAS said service will eliminate $87,000 in expenditures, of which
$62,300 are salaries and fringe benefits; and
WHEREAS the Automated Lock Box Service will result in a net annual savings
of $13,500 as outlined in Attachment B; and
WHEREAS an initial cost for fiscal year 1986 will be $33,600.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners
approves the concept of the Automated Lock Box Service and directs the Account-
ing Division, Alimony Unit to implement said program.
BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners re-
quests a quarterly report for the first year of operation of the Automated Lock
Box Service.
BE IT FURTHER RESOLVED that an .appropriation of $33,600 is to transferred
from 1986 Contingency Fund to Accounting Division, Alimony Unit as follows: \
10100-90901=009900 1986 Contingency Fund ($33,600)
10100-123-55-00-3128 Professional Services 33,6,00
-0-
Mr. Chairperson, on behalf of the Finance Committee, I move the adoption
of the foregoing resolution.
and
RESOLUTICN FINANCE COMMITTEE
ATTACHMENT A
AUTOMATED LOCK BOX SERVICE
The Automated Lock Box Service is a unique form of lock boxing designed to process
large numbers of payments at a low cost. During the production phase, specialized
programs enable the equinment to capture and store data from the remittance
documents. The c. n can be used to automate and accelerate
accounts receivable file updating. Under the proposed automated lock box service,
Oakland County Friend of the Court would provide its remitters with coupons designed
within the parameters of the OCR document specifications.
By utilizing our unique zip code (48277), all incoming payments can be mailed directly
to your Detroit Post Office lock box. The lock box, serviced by NBD, is established
specifically to expedite bank receipt of the remittances. The lock box mail is picked
up by NBD's personnel 15 times daily, starting at 4:00 p.m. the previous evening
through 1:00 p.m. on the day of deposit. The mail is delivered :directly to the
Automated Lock Box area where it is fine sorted according to the type of payment.
ic OCR Processing Procedures
For all acceptable remittances, the Automated Lock Box high-speed, 1-step
processing system:
. reads the voucher - the dollar amount is keyed in by the operator
. balances the voucher to the check
. endorses the check and encodes the dollar amount
• prints an audit trail on both the voucher and check
• captures information necessary to update accounts receivable information
for transmission
The audit trail on the back of each check details the job number (this is unique
by company), date of deposit, batch number, sequence number, an indication of
whether the transaction consisted of a single or multiple document (checks or
vouchers), and the specific customer account number. This same information is
provided in the voucher audit trail except the last field (your customer's
account number) is replaced with the dollar amount of the check.
1.
AUTOMATED LOCK IF,SOX SERVICE
ic OCR Processing Procedures (Continued)
When the day's total activity has been processed, the dollar amounts are
balanced and a single credit advice is prepared to Oakland County's account.
Modified, mul'.'7:c deposits are used V.';11. Dne actual credit posted to your
account daily. These internal "split deposits" are prepared to allow checks to
be forwarded continuously to our Item Check Processing area during our 3 shift
lock box operation. The checks are compared against a specific float table
adjusted for the time of day they are processed. This enables us to take
advantage of early check processing and clearing times without burdening your
account with extra credit postings or additional costs, and eases subsequent
account reconciliation.
For each payment accepted by the processor, specific information contained on
the OCR scan line of the remittance stub will be captured as the individual
transaction is processed (ORC and remittance stub specifications are described
in Exhibit I). Captured remittance detail information is available daily for CPU
to CPU data transmission (at no additional charge) directly to your computer,
or can be provided on magnetic tape or hardcopy output reports (samples of
magnetic tape output formats are shown in the exhibit). Delivery of tapes or
hardcopy reports can be effected through various manners: First Class Mail,
Express Mail, courier service, or other special delivery methods. Charges for
these delivery methods would be applied separately from lock box charges.
2.
AUTOMATED LOCK BOX SERVICE (Continued)
Cost of Service
The required processing for each automated lock box application is unique. Our
determination of price is based upon a complete review of Oakland County's
specific operating procedures, the testing of your ORC document, and a review
of the banks your customers checks are drawn on.
The following prices are a guideline for the charges which Oakland County may
incur:
Unit Price
Monthly Sorting Charge
Active Day Charges
Basic OCR Processing
Deposited Item (each check).
Additional Daily Activities
- Each Additional Transmission
- Data Edit and Reformat
$17.00
11.00 /day*
.145 /item**
.05 /item
6.25 /transmission
2.80 /day
* Includes ORC sys tape or transmission.
** Per item charge includes batching and return mail (i.e. first class
mail).
Benefits
- Increases the timeliness of deposits.
- Shortens check clearing time.
- Reduces the per item cost of processing.
- Accelerates the accounts updating process.
- Reduces research time by providing a printed audit trail.
3.
OAKLAND COUNTY
DEPARTMENT OF MANAGEMENT AND BUDGET - ACCOUNTING
ALIMONY UNIT
Estimated Cost of Automated Lock Box Service
(Assuming 75% of Payees Using a Payment Coupon)
Cost for first twelve (12) months:
1. Payment Books - Printing and Mailing
Payment Cycle Number of Books
Bi-Weekly 122 $ 150
Monthly 2,627 2,750
Semi-Monthly 165 200
Weekly (Jan) 28,990 30,500
(July) 21,743 23,000
New Cases 5,700 6,000
$ 62,600
2. Processing Costs:
Estimated Payments
Mailed to bank 253,000
Processing Charges $36,700
Monthly Sorting Charges 200
Active Day Charges 2,900
Deposited Items Charge 12,600
1986 Costs
1987 Costs
$ 52,400
$115,000
$ 33,600
81,400
$115,000
Estimated Second Year Costs:
1. Payment Books - Printing and Mailing
Payment Cycles Number of Books
Bi-Weekly 92 $ 100
Monthly 1,970 2,150
Semi-Monthly 124 150
Weekly (Jan) 26,018 27,300
(July) 26,018 27,300
New Cases 5,700 6,000
$ 63,000
2. Processing Costs:
Estimated Payments
Mailed to bank 257,000
Processing Charge $37,300
Monthly Sorting Charge 200
Active Day Charges 2,900
Deposited Item Charge $12,900
$ 53,300
$116,300
ATTACHMENT B
OAKLAND COUNTY
-DEPARTMENTOF MANAGEMENT AND BUDGET - ACCOUNTING
ALIMONY UNIT
Cost of Lock Box Service
(Based on a 45% Usage By Payees)
Cost for first twelve (12) months:
1. Payment Books - Printing and Mailing
Payment Cycle Number of Books
Bi-Weekly 122 $ 150
Monthly 2,627 2,750
Semi-Monthly 165 200
Weekly (Jan) 28,990 30,500
(July) 13,046 13,700
New Cases 5,700 6,000
2. Processing Costs
Estimated Payments
Mailed to bank 152,000
Processing Charges $22,000
Monthly Sorting Charges 200
Active Day Charges 2,900
Deposited Item Charges 7,600
TOTAL COSTS
1986 Costs
1987 Costs
$53,300
$32,700
$86,000
$33,600
52,400
$86,000
Estimated Second Year Costs:
1. Payment Books - Printing And Mailing
Payment Cycle
Bi-Weekly
Monthly
Semi-Monthly
Weekly (Jan)
(July)
New Cases
Number of Books
55_ $ 50
1,182 1,250
74 100
15,600
-
5,700 6,000
$L. )0
2. Processing Costs
Estimated Payments
Mailed to bank 155,000
Processing Charges $22,400
Monthly Sorting Charges 200
Active Day Charges 2,900
Deposited Items Charges 7,800
TOTAL COSTS
$33,300
$73,500
$36,000
46,000
$82,000
29,000
111,000
OAKLAND COUNTY
DEPARTMENT OF MANAGEMENT AND BUDGET - ACCOUNTING
ALIMONY UNIT
AUTOMATED LOCK BOX SERVICE
Estimated Cost Reductions
(Assuming 75% of Payees Using Payment Coupons)
Computer Services:
Processing Costs
Forms
Bank Processing
Postage For Payment Notices,
$ 50
3,550
$ 3,600
7,600
7,500
Salaries and Fringes:
2i Account Clerk II postions
Salaries
Fringes (36Z)
Bank Service Charge Reduction
(Increase of 180,000 in float 6a
COST REDUCTC ION
10,800
$140,500
Projected Savings for Five Years
Year Costs Cost Reduction Net Savings
1 $115,000 $ 70,500 $(44,500)
2 116,300 129,200 12,900
3 116,300 140,500 24,200
4 116,300 140,500 24,200
5 116,300 140,500 24,200
$ 41,000
* Reduce Staff first year by 21 positions for 8 months
$ 50
3,550
$ 3,600
7,600
7,500
ESTIMATED COST REDUCTION
(Based on 45% Usage By Payees
Computer Serices:
Processing Costs
Printing Forms Costs
Bank Processing
Postage (Mailing Notices)
Salaries and Fringes:
CaShier $18,000
Account Clerk Positions) 27,800
Salaries 45,800
Fringes (36%) 16,500
Bank Service Charge Reduction
(Increase of $100,000 in Float at 6%)
COST REDUCTION
$62,300
6,000
$87,000
Projected Savings for Five Years
Year Costs
1 $86,000
2 73,500
3 73,500
4 73,500
5 73,500
COst Reduction
$66,500
87,000
87,000
87,000
87,000
Net Savings
$(19,500)
13,500
13,500
13,500
13,500
$ 34,509
. Lynn/D-; Allen, CorlAy Clerk
Register of Deed
#86203 July 10, 1986
Moved by Caddell supported by Fortino the resolution be adopted.
AYES: McPherson, Moffitt, Nelson, Olsen, Page, Perinoff, Pernick,
Price, Rewold, Rowland, Skarritt, Webb, Wilcox, Aaron, Caddell, Calandro, Doyon,
Fortino, Gosling, Hassberger, Hobart, Richard Kuhn, Lanni, McConnell. (24)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)_
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland and having a
seal, do hereby certify that I have compared the annexed copy. of
Miscellaneous Resolution adopted by the Oakland County Board of Commissioners
at their meeting held on July 10, 1986
with the original record thereof now remaining in my office,
and that it is a true and correct transcript therefrom, and
of the whole thereof.
In Testimony Whereof, I have hereunto set my hand and affixed
the seal of said County at Pontiac, Michigan
this 10th day of July 1 9 8 6
