HomeMy WebLinkAbout0291.092L
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June 11, 1992
THE HONORABLE CITY COUl~CIL
Palv Alto, Call£ornia
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COLLECTION IinvtCE -AGREEMENTS _I" CREDIT BUl'~EAT:L Q.f_ PALO __ M,..:r~~
PROFBSBIONAt RECOYE.RY SYSTEMS
Members of the Council:
Report in Brief
The intent of this report is to request Council approval of
separate agreements for collection service with Credit Bureau of
Palo Alto (Attachmt!:Ilt A) and Professional Recovery syste'lll.s
{Attachment !oj. This request is for a continuation of service
which has been provided by various collection firms since A~gust
~9B7. The current contract, which was approved by Council in ~une
1989 for a one-year term with the option to extend the contract fQr
t'Wo additional one-year terms, expires .:rune 30, 1992. Total
payments to the t~o firms were not to exceed $40,000.
Background
To maximize recovery of revenues and min.imize losses due to
delinquent acco~~ts receivable items, collection activity has bE€n
c~ntralized in the Finance Department~ The majo~ity of delinquent
accounts processed are t.hose which have been transferred from other
City departments to Revenue collections.
Revenue Collections pursues delinquent invoices for property
damage, ani~al services, returned checks and other mis~ellaneous
bills from various city departments. Staff also collects paramedic
invoices and hazardous material invoices which are issued by the
Fire Department. False alarm and drivinq while under the influence
(OUI) invoices initii!lted hy the police Department are also collected..
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The City's ccllect~on policy is based on a 30-, 60-, and 9Q-d3Y
c~llection cycle. All acco~ntG are revie~ed on a ~eekly basis Bnd
accounts that are outstandinq at 31 days are mailed a reminder
notice. If no response is received, a phone call is mAoe and a
!ollo'W-up letter requesting pA)"lDerlt is mailed durin; the next 30
day collection cycle. Accounts remaining outstanding at 90 days
are mailed a thiro notice. The third notice advises the customer
that payment cont.inues to remain outstanding and requests the
customer t-o contact Rev'=r'lue Collections staff to 3.n·ange for
appropriate payment~ The letter advises that failure to respond
vithin ten daye will result in referral of the accoun~ to either
the City's collection agency, small claims court, or the City
Attorney's Office.
City staff pursues collection of out.sta.nding invoices using various
collection tools .. hich include cross directories, Departme~.t of
Motor Vehicles (OMV) file search, utility master record files and
information obtained from credit profile reports.
Invoices remaininq uncollected after st.eff resources have been
exhausted are fon:arc1ed to a collection agency for add.itional
!ollow-up.
Current Proposal
On March JO, 1992, the City issued an Invitation for Bids for
Collection Service to 26 firms. Seven responses were received (see
Att~chment C. Bid summary Table). Bios were revie.ed and rated by
the selection committee~ which included representatives from the
Finance Department, Police Department and the Utilities Department~
The Committee. reviewed each firm's ~roposal in detail. Rates,
service levels, organizational plans and experience were all
closely examined. Refgrences yere contacted and extensively
queried rega~din9 customer service and the fi~'s responsiveness to
client requests for iflformation~ Additionally, staff .. a·os encour
aged by firms that compensate their employees on a base salary
rather than on a commission basi6~ Staff 'Was concerne.d t.hat a
salary structure based solely on commission might tend to make a
collector more agqressive~ This approach might conflict with the
City'&. philosophy of extending customer service to all of our
customers, including those with outstanding eebts.
Three of the sev~n firms 'Which issued bid responses were invited ~o
qive oral presentations. The three selected fi~s 'Were Profession
al Recovery Systems, National Recovery Control, and the Credit
Bureau of Palo Alto. After interviewing each firm, the Collection
Committee unanimously selected Credit Bureau of Palo Alto and
Profeesional Recovery Systems.
The two selected firms have provided excellent service for Palo
Alto since 1987. Lo~er bidders ~ere each rejected because of their
CMR:291:92 2
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poor references,
acknowl .. o:::1"ement
fil •••
~dditional fees. delays in inputting data, sl~v
and difficulties in delivering ~nd retrievinq
Both firms are currently collectinq delinq'lJent accounts for the
City~ They are each paid 35 percent of the monies th~y collect.
The applicat.ion of technology has significantly inez-eased perfor
mance in the collection industr;,'~ Featolres s~~ch as auto dialil".q,
global search skip tracing and access to larqer debtor information
databases have allowed tor more cost-effective operations. ~s a
consequence, the Credit Bure.au of Palo Alto offered i!: 5 percent
cost reduction; ~nd professional Recovery Systems: offered a bid
which ~as 4 percent l~wer th~n in previous years.
Recommendation
statf re.commends that the City Co";"!'ncil authorize the Mayor to sign
the attached agreements. with credit Bureau of Palo Alto and
Professional Recovery System~ for collection services fo~ a one
year terl!l with the option to reneW" tor two additional one-year
terms. payment to the t~o firms ~ill not exceed $ 40,000 in the
first ye.ar.
Respectfully submitted,
-. j:;:-1f /Ct._" 'L
Attachments
Related Staff Reports:
CKR'291,92
CMR:367:7
CHR:299,9
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0949 ATTACHMENT A
~ AGREEMENT No.
BY THIS AGREEMENT w.oE ,rwoe:IHE~EO rt>0100f' TrlE ___ ~ ___ DAI' Of'
IlI'A/'ODS£fWHlojiHE CITY OF ?ALO ALTO iMfREIN4FTER REl'iE"lPED !"G,&,S CiTY.,I .... c
{NAW£1111 CRED i T SUREALi OF PAl Q ALl Q (2.' __ _
lAOOflESSI 43.5 tiAHllTQIII ~\"ENI..'t.
• CONTRACTOR &w.l ~NIOE CA F~,SH T,",c R,)O.J.OW~ 5P.C;FifO SfIW<:ES Io..~DrOA """ TEAw.5 !iP&1F"IEO I~ EXHIBIT ____ _
ATI"CitD HfRCiO.uro INCO'!POf>ATEC HfREI/Ij !IV Tl<ISI:;f:FE.RENCE
l" K£ (REt> I T 8:JR£J,U or j:"AlO ,ti L. TO SI"IA:'L FiJR~ I S r; oI.LL l..Afl)p' ~ ,.,AT ER t ~lS. E(ll! j ~EN T A~~ D:.P(R! I 51:: /ti:EElltD 1'0 MAX I "'J zeo
COLlECHml Of "CCotlNTS R£CU~I;.5L.E 1T0'.5 .~~H.RREC' BV ·LKE CITY Of FALO Alln. THf: CJ"-'TfV.CTOR St<ALL '..NDE.RHK~ 1'HE
COU.fCTIO"l (IF THE CITY'S DfL!NOOENT ACCOI,.lNTS l!<oj THE )oV.I'iNE'i AND L'NDE!1 iH( T;:::~S ANO cr:.~C'ITI0N.5 AS 5n FOFlTri I~ iH~
EAHISITS ATTACr-£D HERno. CDMPE~AiION SKALl B~ ~N A.(CORDAI'CE "'i~H TKe C(').'1?E~~TIO.,'SCHE~lH .. E AS SET fORi~ I~ iH[
£XHISIT .. kO u~s\Jn S'-I.\LL eE FILED ON SE,.,.ALF OF 1Kt C'I~Y liliHOllT ?HID1I: CClNSllL'7l'.j)DJ. 'ITH it1t CITl' "Ti"N1:HEY~ ~l-<'
rAY CONSULT WiTh THE: en." COLIPiCil. c.RErnT BU!\~U OF P .... L,) ""L.TD .,'ILL PRO~'iDE}. S~5.00D FIDELITY &IND. AL:. orHEiI
IN~U::RjV!CE iH'QUIREME""rs ~~LL. 8( "1,000,000 EACH.
• EXHIBITs Tfolf FOU~ J,''''AC~O E)i'J-\j6r!S HE:c.~!I'r' "'~E IotAOE " ... RT Of ,+11$ ""FlEE ... "",-r
DEPA...l<.T!oI(N1 CF FINANCE 1r.:','IT.UIOU FOR BiD DATED A?RI< .. 2.,1992.
<:REDI; BUREAU Of F'A~""iO en) fORM D,~TED APRI;' 28, 13':fZo
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• TERMS TM£ SERViCES ~ WATERIALS FiJFt.III~E'O LINDER THIS AG~EE~...-r ~ CQMUE""CE ON _~J~JhLYLJ'~'-""~'~2,---__ ~ ___ _
CCf,'TKACT~R SK.oI.Ll RE~iT ,c" ... l CJ:"I.E(:·,·W REi'cJo0t: Ie l'Hf. Cin BV THE 5~H OAY OF 1H£ MON1H
FO"LOio(lNC THE CLOSE Of THE f'RE'o'IClUS ,",.ONtk. C.iT'r' 5KA.Ll f>A.V CONTRACTOr<. LPJto;. REC.ElPT
OF MOO'fHL.¥ INVOiCE.
• PAYMENT RECORD iDC.PAAlVEr.'T USE R£'VERSE SJDE,
• CITY ACCOUNT NUMBER: i KEY COOE 06JEcr -+-"""",-,,-----
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• GENERAL TERMS AND CONDITIONS ARE INe'CDECON BOrw S<D£$OF ""SOOCUM[NT
TtH:; AGREUIE"''T St\Ai...t 8ECD~! E"FFEi..11VE vPQ" ns APPRo~rA.L AhiD txECuTIO" BT' CITY. !N WfT#lESS THEREOF. !HE t'ARTIES t!AVE ElIECl,rnO HilS
AtiREEMf~ TJiE DAY, MO.\TM, ~ND 'fEAR FiRSi WAlmN A3OVE.
tilDLD a.t,fI_LHS. C"..lIlTRACTOP. agr~ III I~r:it¥. dI1l/flO wd ~tI h,aimlm CI~, itS OIlICelS, ~ts, aM tmpioyffSll"Gm 1o"1)'.t'!d.&ll de~, daJms or 1.ab11r!)' til
iI1'f l\iIufI. incluC~ .. ongM ~UI, ... ~ by gr JIi$lrlCl out III CONTIl;,a.,.CTOR S, rts off~I"$'. ~.mt$' 01 empWyep' neg;~1ItIt a.w... 'rrors, or omi:wc<l~, Dr Wlllfut
~ud. ",conduct for WhICh the law ~ stnd: IlIbi~' on CONmACTO~ Wl ~ perf(lfm.J:>C4 co ~Iu~ <L' Ptr10rm IJIJs ~rNmetll by CO~R..I.ClOR
OOIfIE AliItlBRJCl. ThIS ao~ .. 1d!he lrrrm 100 wnMioos 2'l tbt rMrM! r..crc<t re~r~ It.!-8Il~~ &g~l ~ the ~ .,if; rnpt.d: t~ 1M PU:tNse
and $;If.! ~ the eq~~rMn:. milte~s 0: SII~1e$ ~r p;ijl'mllnt 10' UNICtS wrflJC~ rN.~ be Ole sur.~d (I! lliis C()ntr;u;!, .-JI ~rrQr ~rwrnn:s. rl9rtUr.~lJoM. s!.ilemenls.
htI;lot,.IOOOS;&nd ~~ wI'lr\he! ml elr 'IIIIi:16n ai'! &l.lpe~ 1Ierelly
• PROJECT MANAGER ~ II.E~ESEN1'''''T(IIE FOR GoI\\, ..... ,
DE'T __ ~'~EV~E~N~'J~'_C~O~l~l~E~CT~'~D~N~5 __________________ _
1',0, BOX lC2$O
PIolO ALTO, CA ~JOJ
Te4&phone 1j'5/~29 .. 2)n
• INVOICING 5ENDALL. 1HiI00Cf.S tOTHE CITY .... nN ~OJECTWAkAGER
• CfTY OF PALO ALTO APPROVALS: lAOVTE Fl.)!; S<GNAtURES "'~D'i't(i TO ~BERS tN APPPoO'/Al.i.BO)CES Bf.LO'I'fl
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