City Gate recovers $5M in utility costs & reaches 100% digital payments with Zego
About City Gate Property Group
With 75+ years of multifamily-owned management in Texas and Louisiana, the partners of City Gate Property Group are experienced in all facets of real estate. Built around a team of well-qualified professionals focused on resident retention and asset optimization, history provides a proven track record of managing with purpose. At City Gate, residents are the top priority and associates are committed to providing outstanding service.
- Portfolio: Multifamily
- Units Managed: 9,000+
- Zego Products: Zego Pay, Zego Utility
- Accounting Software: ResMan
- Location: Texas and Louisiana
Results highlights
The Challenge
With core values of service, excellence, and integrity, City Gate Property Group is focused on providing their clients with a superior level of service and return on their investment. These values have enabled them to experience tremendous organic growth in their portfolio. With growth comes the need for systems and tools to support the entire portfolio, which is what brought City Gate to Zego. They came to Zego with 3 primary goals:
1. Transition to paperless payments
2. Improve the entire utility management process – from maximizing resident utility costs recovery to streamlining accounts payable.
3. Support the company's heavy growth with scalable systems and automation that improve operational efficiency
“Our biggest challenge is managing our growth. It’s a blessing but we have to make sure we have control over the growth and not let it control us. When we started talking with Zego we were taking on 20 new properties and needed to put systems in place to support that growth for our clients and residents. We also wanted a partner who wouldn’t nickel and dime us to death.”
Jenny Rosario
Director of Implementation and Software
City Gate wanted to improve two specific processes:
1. Resident payments
2. Utility management
They were previously working with vendors that didn’t offer complete solutions and left City Gate wanting. “We are constantly looking at what we can do better. Going paperless for payments was one of those areas, but we needed a resident cash option as part of our payment solution to support our older demographics” said Jenny, “We also needed help with our utilities. We were previously working with another vendor for billing through RUBS. The legalities are really important and we wanted a higher comfort level with our provider.”
The Approach & Solution
The City Gate team began discussions with Zego for payments and utility management. “When evaluating a vendor we look for relationship, integrity, and expertise,” said Jenny “If this relationship is important to you, we need to make it a win-win for both teams.”
For payments, City Gate needed a solution that offered a full suite of digital options, including credit cards, debit cards, ACH, and an alternative to cash payments for residents who were resistant to change. They also wanted every transaction to be integrated with their software so the office was not carrying funds and property staff was not overloaded with depositing and processing cash or paper checks.
“We need the funds in the bank, period. With paper, there is so much room for errors, theft, and issues. We need to be as automated as possible and part of that is going online. We strongly encourage all of our residents at all of our properties to pay online. Our goal is 100% online payments.”
Jenny Rosario
Director of Implementation and Software
For utilities, City Gate was looking for a RUBS vendor that would be thorough, ensuring that the legalities were carefully reviewed and constantly monitored for any changes. In addition, more properties meant more utility bills. They needed a partner to not only take that burden off their plate but also do so with high levels of accuracy, to ensure that operations would not be impacted. “Utilities can be frustrating, especially when you have multiple properties - it’s hard to keep track of invoices. Making sure we didn’t have a cut-off or shut off was important.”
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The Property Manager's Guide to Common Rent Payment Mistakes
The Results
- 100% digital pay utilization, on average, across the portfolio
- 28% digital pay dollar volume growth year-over-year
- Over $5M recovered in utility expenses
- Over 10,000 invoices audited and paid, with exceptions that generated savings uncovered on 4.5% of those
- Over 1,000 vacant unit cost recovery incidents identified with nearly 70% recovery
Before working with Zego, City Gate had some properties where online engagement was very low. This was either because the demographics were older, or there was a language barrier that prevented them from paying online. Some of the properties were getting 95% of their payments via money order. It was a struggle to achieve digital payments.
With Zego Pay’s complete suite of payment options, including CashPay, City Gate is now averaging 100% digital pay utilization across the portfolio. CashPay allows residents to pay via cash at over 25,000 retailers nationwide such as Walmart. Residents are happy, and City Gate achieves their goal. “We need the paper not to be held on-site. We don’t want cash to transfer that many times.”
When it comes to utility management, City Gate has been able to offload the receipt and processing of over 10,000 annual invoices across their properties to Zego. Over a 12 month period, thorough auditing uncovered exceptions that resulted in cost savings to City Gate on approximately 4.5% of those invoices. In addition, over 1,000 vacant cost recovery incidents were identified, where residents had not promptly and/or accurately put utilities into their name. Zego generated resident statements for these incidents, resulting in another $100,000 in savings for City Gate.
Zego regulatory experts also identified appropriate opportunities for utility recovery from residents in each property’s home state. This resulted in over $5M in expenses recovered for City Gate across utilities such as water, stormwater, sewage, and electricity. Finally, City Gate associates benefited from a hands-off process from end-to-end for utilities, which gave them precious time back in their day.
As part of Zego’s commitment to continuous improvement and growth, regular executive business reviews are completed with the City Gate team that detail successes as well as recommendations and opportunities for improvement. According to Jenny “the people we work with directly are very patient, thorough, detailed, great great great communication. Kudos to the team. The relationship we’ve got and the people we work with are absolutely amazing.”
“Zego has made our lives easier at the corporate office and behind the scenes. Zego helps us work smarter, not harder. We benefit from that at all levels - the manager level and the corporate level.”
Best practice recommendations for achieving 100% digital payment adoption
Zego offers five recommendations for achieving 100% digital payment adoption.
1. Onsite Staff change management and training: Provide on-demand training for your on-site associates around the value and functionality of your digital payment system
2. Resident onboarding: Provide new residents with the resources they need to make digital payments upfront and set clear expectations around when and how payments should be made
3. Alignment of resident incentives: Create a win-win payment structure that benefits both you and your renters.
4. Multiple payment options: Offer your residents every type of digital payment method including a cash payment alternative.
5. Resident engagement & communication: From a community-branded mobile app to automated rent reminders, your resident communication strategy should be supported by intuitive, user-friendly technology.
To learn more about our digital payment best practice methodology and how to implement it at your property download our free ebook: The Property Manager's Guide to 100% Digital Payment Adoption
Get a free demo of Zego
To learn more about how we can help you implement these best practices, schedule time with a Zego team member for a quick, no-obligation demo of our platform.