HomeMy WebLinkAbout02-17-2015 C4 Contract Amendment with Financial Credit NetworkCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
FROM: Wayne Padilla, Finance and Information Technology Director
SUBJECT: APPROVE EXTENSION OF AGREEMENT WITH FINANCIAL CREDIT
NETWORK FOR DEBT COLLECTION SERVICES
RECOMMENDATION
Approve the extension of the existing agreement with Financial Credit Network for a two year
period ending on July 13, 2016.
DISCUSSION
In December 2010 the City released a Request for Proposal document (RFP) seeking proposals
from qualified debt collection firms. In response to the RFP, the proposal from Financial Credit
Network (FCN) was received and determined to be the most responsive in light of the City’s
needs. The contract was awarded in July 2011 for a three year period.
During this period of time Financial Credit Network has performed well in collecting debts for
the City as shown by the attached statistics. The national average for the collection of
governmental debt is 22.6%, so the numbers in the attachment for total recoveries are an
indication that collections on the whole are well above the average.
FCN has requested an extension to this agreement since the initial term expired in July 2014 and
the end of the original term was not tracked by either the City or FCN until much later. FCN has
continued to perform services on a month-to-month basis. The contract extension would add two
years to the original term and would end on July 13, 2016. Prior to that time, a new RFP
document will be prepared and released to solicit new proposals. The estimated annual fees for
this agreement are approximately $15,000.
FISCAL IMPACT
Maintaining access to an outside collection agent frees staff time for other significant tasks while
ensuring that delinquent accounts are pursued for collection in a timely manner. The estimated
annual fee for this service is $15,000 and is currently included in the budget for the Revenue
Division of the Finance Department.
ALTERNATIVE
Do not approve the extension of this agreement. This option is allowable and staff could
prepare an RFP for circulation to obtain new proposals for service. However this would take
approximately 90 days to conclude with a new contract award and in the meantime, the current
vendor would require the contract extension to continue providing services for that period of
time.
11/18/14
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Debt Collection Services Contract Extension with FCN Page 2
ATTACHMENTS
1. Original Agreement
2. Contract amendment/extension
3. SLO debt collection stats FY2013, FY2014, and FY2015
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ATTACHMENT 1
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ATTACHMENT 1
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ATTACHMENT 2
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July 2011 - June 2012
Portfolio # Assigned $ Assigned $ Cancelled Net Assignment $ Received Net Collection %Commission Paid
Business License SLOBUS 45 $47,116.02 $4,678.61 $42,437.41 $2,869.00 6.76%$605.00
Misc.Receivables SLOMSC 141 $69,152.98 $0.00 $69,152.98 $6,372.00 9.21%$1,784.00
Utility NSF Checks SLONSF 0 $0.00 $0.00 $0.00 $0.00 0.00%$0.00
Utilities SLOUTL 214 $49,774.73 $397.08 $49,377.65 $17,823.00 36.10%$4,400.00
COMBINED TOTALS 400 $166,043.73 $5,075.69 $160,968.04 $27,064.00 16.81%$6,789.00
July 2012 - June 2013
Portfolio # Assigned $ Assigned $ Cancelled Net Assignment $ Received Net Collection %Commission Paid
Business License SLOBUS 57 $47,953.32 $4,381.03 $43,572.29 $17,433.00 40.01%$4,858.00
Misc.Receivables SLOMSC 84 $48,913.59 $0.00 $48,913.59 $7,132.00 14.58%$1,890.00
Utility NSF Checks SLONSF 0 $0.00 $0.00 $0.00 $0.00 0.00%$0.00
Utilities SLOUTL 498 $120,993.41 $1,430.57 $119,562.84 $31,866.00 26.65%$8,619.00
COMBINED TOTALS 639 $217,860.32 $5,811.60 $212,048.72 $56,431.00 26.61%$15,367.00
July 2013 - June 2014
Portfolio # Assigned $ Assigned $ Cancelled Net Assignment $ Received Net Collection %Commission Paid
Business License SLOBUS 30 $26,212.36 $1,100.00 $25,112.36 $5,925.00 23.59%$1,579.00
Misc.Receivables SLOMSC 83 $51,345.02 $5,631.15 $45,713.87 $7,178.00 15.70%$1,890.00
Utility NSF Checks SLONSF 2 $1,640.02 $1,525.00 $115.02 $0.00 0.00%$0.00
Utilities SLOUTL 616 $144,002.83 $2,921.74 $141,081.09 $59,152.00 41.93%$16,010.00
COMBINED TOTALS 731 $223,200.23 $11,177.89 $212,022.34 $72,255.00 34.08%$19,479.00
July 2014 - December 2014
Portfolio # Assigned $ Assigned $ Cancelled Net Assignment $ Received Net Collection %Commission Paid
Business License SLOBUS 0 $0.00 $0.00 $0.00 $2,587.00 0.00%$715.00
Misc.Receivables SLOMSC 3 $3,815.74 $0.00 $3,815.74 $9,963.00 261.10%$2,747.00
Utility NSF Checks SLONSF 0 $0.00 $0.00 $0.00 $0.00 0.00%$0.00
Utilities SLOUTL 322 $65,392.03 $87.18 $65,304.85 $28,869.00 44.21%$7,518.00
COMBINED TOTALS 325 $69,207.77 $87.18 $69,120.59 $41,419.00 59.92%$10,980.00
TOTAL
Portfolio # Assigned $ Assigned $ Cancelled Net Assignment $ Received Net Collection %Commission Paid
Business License SLOBUS 132 $121,281.70 $10,159.64 $111,122.06 $28,814.00 25.93%$7,757.00
Misc.Receivables SLOMSC 311 $173,227.33 $5,631.15 $167,596.18 $30,645.00 18.29%$8,311.00
Utility NSF Checks SLONSF 2 $1,640.02 $1,525.00 $115.02 $0.00 0.00%$0.00
Utilities SLOUTL 1,650 $380,163.00 $4,836.57 $375,326.43 $137,710.00 36.69%$36,547.00
COMBINED TOTALS 2095 $676,312.05 $22,152.36 $654,159.69 $197,169.00 30.14%$52,615.00
ATTACHMENT 3
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