HomeMy WebLinkAbout0228.092"I
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April 23, 1992
HONORABLE CITY COlJNCIL
Palo Alto, California
CONTRACT lITH CREDIT BUREAU OF PALO AL_TO --AtnIrORIZlt.TION FOR
cJlANGE ORDER AND BUDGET AKENDM~ ORDINANCE
MeMbers of the Council:
Report in Brief'
staff recommends Council approval of the attached Budget Amendment
Ordinance for $14, 000 with credit Bureau of Palo Alto to pay for
additional collection s.c=rvice assistance to the City. Council
approved the present collection service contract in June 1989 for
one year_ with the option to extend the contract for two additional
one-year terms (CKR:299:9). The contract was approved for $40,000.
with one-fourth of the current contract year remaining, 96 percent
of the availal::le budget dollars has hsen expended by the
contractor, resulting in a need for a~ditional funding.
Background
The City contracted with credit Bureau of Palo Alto in July ~989
for collection assistance in the manage~ent of delinquent account
receivable invoices 'CMR:299~9). staff identified an increase in
collection activity caused by: 1) an increase in collection
amounts due to inflation; 2) an increase in the difficulty of
collection of overdue bills; and 3) the tr-ansfer of other city
departments" collections to the Finance Department. Staff also
re_cognized the immedii!te. Deed for assistance 'With collection
management of paramedic bills.
CliR:228:92
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staff explained that collections ",re a r:ompetitive business and
firms tend to work harder 'With competition. staff recorn:mended
contracting with t\ltlO vendors ~ ar.c t.his reconimendation 'Was approved
by Council. The Council-approved contract of $40,000 was appor
tioned bet'Ween Credit Bureau of Palo Alto for $30,000 and Profes
sion~l Recove~y Systems of San Jose for $10,000 (C~~:367:7). Each
vendo= has a separate contract numberi th~~efore, funds cannot be
interchanged. "I'his request is for additional funding for the
Credit Bureau of palo Alto cont~act only. The requested funding
will cover administrative costs for the remainder of the current
contract, which expires June 30, 1992. Staff is presently in the
process of issuing an Invitation to Bid for collection service
vhich .... ill cover the next three-year period.
The Credit Bureau of palo Alto has worked diligently at f 11lfilling
the City's objectives to recover maximum revenue from delinquent
accounts; to have a collection process which is conducted within
the highest legal and ethical standards; and to take action in a
timely manner on all accounts referred for collection. Each firm
is paid a percentage of the revenue it recovers. A stringent and
successful collection effort by the Credit Bureau of Palo Alto,
combined with the efficient and effective management of paramedic
invoices b}' City staff., has significantly increased recovery of
outstanding debt. As d result~ the initial $30,000 appropriation,
which recovered $85,000 in revenue, has been exhausted. To
compensate the Credit Bureau vf Palo Alto for additional collec
tions services through 3une 3D., ~992, the City needs to increase
the appropriation by '$14,000. to cover estimated aCb.inistrative
costs through the end of the contract.
The additional cost 'Will be more th2lln offset. by the additional
revenuoe Which the City anticipates 'W;;'.!.l be collected by Credit
Bureau of Palo Alto --approxi1tIately $40, 000.
staft Re_commendation
staff recommends 1) council approval of the attached Budget
Amendment Ordinance in the amount of $14,000 for the contract 'With
Credit Bureau of Palo Alto; and 2) authorization for the City
Manager or his designee to negotiate and execute one or more change
orders to the contract 'With Credit Bureau of Palo Alto, the value
of all of which change orders shall not exceed $14,000.
CHR, 228,92 2
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Re~pactfully su~mitted,
AUf'.i-Iii-If!(. ~-.J~CE WHITE
Revenue Collections supervisor
Attachment
Related Staff Reports: =:367:7
CMR:299:9
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ORDINANCE NO~
ORDINANCE OF THE COUNCIL OF THE CITY OF P_\LO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 1991-92 TO APPROPRIATE
FUNDING TO THE TREASURY DIVISION OF THE FINANCE DEPARTMENT FOR
COLLECrrON ASSISTANCE WITH THE CREDIT BUREAU OF FALO ALTO
WHEREAS, pursuant to the p~ovisi¢ns of Section 12 of Article
III o~ the Charter of the City ct Palo Alto, the Council on June
24, 1991 did adopt a budqet for fiscal year 1991-92; and
WHEREAS, the City contracted with the Cr'!!dit Bureau of palo
Alto ("Credit Bureau W} in July 1989 for collection assistance in
the management of delinquent account receivable invoices; and
WHEREAS, the credit Bureau has worked oiligently with the City
to recover delinquent accounts and has successfully increased
recovery for outstanding debt; and
WHEREAS, one-quarter of fiscal year 1991-92 remains, but the
allowable funds under the contract with the credit Bureau have been
expended; and
WHEREAS, an additional appropriation is necessary to increase
the e~~enaitures under the contract with the Credit Bureau t~rough
June 30, 1992;
NOW, THEREFORE, the Council of the City of Palo Alto aoes
ORO~IN as follo~s:
SEC'l'!QN 14 The sum of $14,000 is hereby appropriated to
Contr.act Services in the Revenue CoJlection program of the Finance
Oepartment and the Reserve for Capital Projects is correspondingly
reduced.
SECTION 24 This transaction will reduce the Reserve to
$5 1 440,695 as of March ~1, 1992.
~CTIQN J 4 The Council of the City of Palo Alto hereby finds
that the enactment of this ordinance is not a project under the
California EnviroJUllental Quality ,Act and, there!ore l no environmen
tal impact assessment is necessary.
SECTION 4.
Municipal Code,
aaoption.
As provided in Section 2.04.375 of the Palo Alto
this ordinance shall become effective upon
INTRODUCED AND PASSED:
A'iES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
city Cleek
APPROVED AS TO FORM:
Sr~ Asst. City Attorney-
APPROVED:
City Manaqer
Director of Finance
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APPROVED:
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