Cities collect roughly $650 billion in total revenue with 17% of revenue coming from utilities, according to the State of Cities 2021 report by the National League of Cities (NLC). This revenue stream helps to support municipal services and developments.
Finding new ways to boost utility revenue collection is more crucial than ever. Governments need ways to navigate budget pressures and enhance customer experience.
Key takeaways include:
- By deploying a digital government platform, agencies can simplify municipal utility payments and enhance communication with residents.
- By making it more convenient for residents to pay utility bills online, governments can reduce delinquency and accelerate disbursement.
The impact of the pandemic on municipal utility payments
The COVID-19 pandemic added pressure to municipal budgets as cities lost revenue as a result of a slowing economy. For 41% of the cities surveyed in the 2021 State of Cities report, there was a decrease in total general fund revenue over the previous year. Many cities deferred tax payments and waived late fees on utilities.
Cities also noted that fee-based revenue sources went down, including utility fees (31%) and parking fees (37%). According to the NLC document, 12% of cities reported utility bills and other fee collections as one of the most significant negative conditions over the previous year.
A utility billing system helps to simplify workflows
Utilities are one of the most basic public services as residents and businesses need access to water, electricity, gas and garbage disposal for a comfortable living environment. Digital utility bill delivery helps governments streamline the process because it allows customers to receive and view their bills on a computer or phone, and then make electronic payments. That means there’s no need to go to a bank or office to complete a government transaction manually.
With resident utility billing software for municipalities, agencies can consolidate government online payment services into one user experience, simplifying workflows even more. For example, your residents won’t need to go to several websites to pay different utility bills, such as water and sewage. They can also add all their bills to one shopping cart and pay them all at once.
Increased convenience for residents
In order to offer its residents the convenience of a citizen self-service portal, the City of Toronto launched MyToronto Pay in partnership with PayIt. Before PayIt, a typical family in Toronto would have to access more than 10 portals and channels to manage about 20 residential services and payments over the year.
By merging multiple services into an integrated platform, Toronto has calculated a return on investment of $11 million during the five-year term of the contract. Torontonians can use the platform to pay online property tax, water and solid waste management bills, with more services such as parking violations to be added in the coming months.
A modern utility bill payment software can drive up customer compliance
When residents go paperless, they can receive email notifications of new utility bills and late notices. Agencies can reduce their operational costs, too. According to Forrester’s Total Economic Impact report on deploying PayIt, “The estimated average cost of sending a bill or late notice, including paper, envelope, printing, postage, and labor, is $0.70.” Those costs add up quickly. However, agencies deploying PayIt’s digital government solution can save $11,375 over three years, based on the TEI study.
By consolidating utility and property tax payments into a platform powered by PayIt, the City of Grand Rapids, Michigan, registered a 278% increase in electronic payments and a 50% reduction in walk-in traffic. Additionally, 17.5% of Grand Rapids water customers opted out of getting paper statements.
Electronic reminders also help to drive increased user compliance. Getting the notice that your bill is due soon has cut water late fees by $200,000 per year in Grand Rapids as reminders of upcoming bills have helped reduce cutoffs and keep money in residents’ pockets. For governments, reduced delinquent payments translate into accelerated revenue collection.
Features to look for in utility billing software for municipalities
When choosing a public utilities software for cities, here’s what government leaders should look for:
1. Multi-channel approach
To simplify government payments, agencies need to meet residents wherever they are. That’s why it’s critical to invest in a multi-channel platform. For example, PayIt delivers government services and payments not only through a web browser and mobile app, but also through interactive voice response (IVR) phone payments and contactless point-of-sale (POS) terminals.
Equally important is that all these different payment channels adhere to the same workflows for integrated administrative capabilities, including reporting.
2. Digital government wallet
A digital government wallet enables residents to link different services into one account for a single checkout experience. Residents can also set up automatic payments and reminders. With PayIt’s GovWallet™, users can securely store their receipts, documents and preferred payment methods.
3. Government chatbots
Conversational chatbots can help residents quickly find the information they need, guiding them through processes such as utility bill payments. Chatbots also help save employees’ time addressing customer inquiries as their workflows can be customized to take care of manual procedural tasks.
4. Outage alerts
Government offices can use the platform to push notifications to residents’ mobile devices. For example, local authorities can issue emergency warnings as in the case of water outages. This feature strengthens communication with residents and helps build trust.
Accelerate utility payment processing with PayIt
Want to see in action how PayIt’s resident billing services can help you streamline municipal utility payments and revenue collection? Book a demo now and our team of experts will walk you through our award-winning digital government solution.