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HomeMy WebLinkAbout03-16-2016 Financial Credit Network AgreementAGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on July 14, 2016, by and between the CITY OF SAN LUIS OBISPO a municipal corporation, hereinafter referred to as City, and FINANCIAL CREDIT NETWORK hereinafter referred to as Contractor. WITNESSETH: WHEREAS, on March 16, 2016, City requested proposals for the collection of delinquent accounts per Specification No 91444. WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City for said collection services. NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained, the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, for a period of three years. City may elect to extend this agreement for one additional two year term, on the same terms and conditions. At the end of the term, Contractor will be allowed to increase prices, not to exceed the cost of living increase as published in the Consumer Price Index, all urban consumers, for the Los Angeles- Riverside- Orange Co area at the end of the prior year. In all cases, City may cancel the contract if a requested price increase is not acceptable. 2. INCORPORATION BY REFERENCE. City Specification No 91444 and Contractor's proposal dated Thursday May 19, 2016 are hereby incorporated in and made a part of this agreement. Contractor further agrees to comply with the City's standard terms and conditions and insurance requirements which are attached hereto as Exhibits A and B, respectively, and incorporated herein by this reference. Should there be any conflict between Contractor's proposal and the City's standard terms or conditions, the City's standard terms and conditions shall control. 3. CITY'S OBLIGATIONS. For providing delinquent account collection services as specified in this Agreement, City will pay Contractor 20% on all regular collections that are less than 60 days old at the time of placement, 24% commission on all regular collections 61 + days old at time of placement and 34% commission on all legal collections. The age of the accounts will be determined by date the account is entered into the Contractor's collection system. Additionally, Contractor will not charge any contingency fee for monies collected during the first 10 days after being entered into their collection system (10 day grace period). 4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to do everything required by this Agreement and the said specification. 5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Manager of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. 7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Contractor Financial Credit Network P O Box 3084 Visalia, CA 93278 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. ATTEST: City Cler- - APPJtOVED AS TO FORM: City CITY OF SAN LUIS OBISPO By; City Manager CONTRACTOR I: Exhibit A REQUIREMENTS 1. Insurance Requirements. The Contractor shall provide proof of insurance in the form, coverages and amounts specified in Exhibit B within 10 (ten) calendar days as a precondition to contract execution. 2. Business Tax. `iire Contractor must have a valid City of San Luis Obispo business tax certificate before execution of the contract. Additional information regarding the City's business tax program may be obtained by calling (805) 781 -7134. CONTRACT PERFORMANCE 3. Ability to Perform. The Contractor warrants that it possesses, or has arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to carry out and complete the work hereunder in compliance with any and all federal, state, county, city, and special district laws, ordinances, and regulations. 4. Laws to be Observed. The Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work. 5. Payment of Taxes. The contract prices shall include full compensation for all taxes that the Contractor is required to pay. 6. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges and fees, and give all notices necessary. 7. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety. 8. Public and Employee Safety. Whenever the Contractor's operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees. 9. Preservation of City Property. The Contractor shall provide and install suitable safeguards, approved by the City, to protect City property from injury or damage. If City property is injured or damaged resulting from the Contractor's operations, it shall be replaced or restored at the Contractor's expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work. 10. Immigration Act of 1986. The Contractor warrants on behalf of itself and all subcontractors engaged for the performance of this work that only persons authorized to work in the United States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. 11. Contractor Non - Discrimination. In the performance of this work, the Contractor agrees that it will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 12. Work Delays. Should the Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City's sole option, be extended for such periods as may be agreed upon by the City and the Contractor. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. 13. Payment Terms. The City's payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the materials, supplies, equipment or services provided by the Contractor (Net 30). 14. Inspection. The Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of the Contractor are being performed in accordance with the requirements and intentions of this contract. All work done and all materials furnished, if any, shall be subject to the City's inspection and approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements. 15. Audit. The City shall have the option of inspecting and /or auditing all records and other written materials used by Contractor in preparing its invoices to City as a condition precedent to any payment to Contractor. 16. Interests of Contractor. The Contractor covenants that it presently has no interest, and shall not acquire any interest — direct, indirect or otherwise —that would conflict in any manner or degree with the performance of the work hereunder. The Contractor further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed. The Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, the Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City. 17. Hold Harmless and Indemnification. The Contractor agrees to defend, indemnify, protect and hold the City and its agents, officers and employees harmless from and against any and all claims asserted or liability established for damages or injuries to any person or property, including injury to the Contractor's employees, agents or officers that arise from or are connected with or are caused or claimed to be caused by the acts or omissions of the Contractor, and its agents, officers or employees, in performing the work or services herein, and all expenses of investigating and defending against same; provided, however, that the Contractor's duty to indemnify and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers or employees. 18. Contract Assignment. The Contractor shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 19. Termination. If, during the term of the contract, the City determines that the Contractor is not faithfully abiding by any term or condition contained herein, the City may notify the Contractor in writing of such defect or failure to perform. This notice must give the Contractor a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency. If the Contractor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to the Contractor to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of the Contractor's surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the termination thereof. In said event, the Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City's Notice of Termination, minus any offset from such payment representing the City's damages from such breach. "Reasonable value" includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by the Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the Contractor shall be based solely on the City's assessment of the value of the work -in- progress in completing the overall workscope. The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City's sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall the Contractor be entitled to receive in excess of the compensation quoted in its proposal. Exhibit B Consultant Services The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Contractor shall maintain limits no less than: General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project /location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4,. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self- Insured Retentions. Any deductibles or self - insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the City, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: I. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 1 For any claims related to this project, the Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self - insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. 3. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 4. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANII. Verification of Coverage. Contractor shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. City Manager Report Final City Manager Approval Approver Name Date Approved City Administration Shelly for 3/16/2016 Reviewer Routing List Reviewer Name Date Reviewed City Attorney's Office Jma 3/8/16 Finance and IT February 26, 2016 FROM: Derek Johnson, Assistant City Manager Prepared by: Marjorie Hernandez, Supervising Accounting Assistant SUBJECT: REQUEST FOR PROPOSALS FOR COLLECTION OF DELINQUENT ACCOUNTS RI?COMMENDATION Authorize the request for proposals (RFP) for collection of delinquent accounts. DISCUSSION Background The City of San Luis Obispo uses a collection agency to collect delinquent accounts where customers have balances owing to the City. These delinquent accounts include, but are not limited to water and sewer accounts, business tax and license fees, administrative and other fines and miscellaneous receivables. In 2011 the City of San Luis Obispo sent out requests for proposals with Financial Credit Network being awarded the three year contract with a two year extension. While City staff has been very satisfied with Financial Credit Network the contract expires in July 2016. With this new collection services contract, the City wishes to improve reporting and make improvements to the collection of delinquent accounts were possible. It is the City's intent to maintain all collection services with one agency to maximize cash flow and minimize administrative costs. Scope of Services Prospective collection agencies must be able to provide to the City the scope of services detailed on pages 1 and 2 of the RFP and summarized below. 1. Once an account has been assigned to the collection agency all customer contact is the sole responsibility of the agency. 2. The agency will remit all monies due less the agency commissions to the City each month. ECOSLO Contract, 2015 -17 Page 2 3. The collection agency shall provide monthly reports describing collection activity. 4. If legal action is required to obtain payment for past due accounts, all fee pertaining to such action are the sole responsibility of the collection agency. 5. The selected collection agency, as a representative of the City, is required to be sensitive to customer concerns and to maintain good public relations with City customers at all times. In addition to the scope of required services, proposers may offer the City additional optional services such as online access to City accounts and reviews of City collection practices. Proposal Evaluation and Selection The proposal evaluation factors and process are set forth in the REP, which notes that the contract award will not be based solely on price, but on a combination of factors as determined to be in the best interest of the City. After evaluating the proposals and discussing them further with the finalists or the tentatively selected contractor, the City reserves the right to further negotiate the proposed work and /or method and amount of compensation. We recommended that the review team be composed of the Utilities Business Manager, Director of Finance and Information Technology, Finance Operations Manager and Supervising Accounting Assistant. Next Steps The next steps following the approval of the CMR are as follows: 1. Issue RFP 2. Receive Proposals 3. Complete proposal evaluation 4. Finalize Staff recommendation 5. Award Contract 6. Execute Contract 7. Start Work FISCAL IMPACT The City's current collection agency receives between 25 and 90 accounts per month, which is not considered to be a large volume. Currently, if the collection agency is able to collect the delinquent account within 10 days the City receives 100% of the collection, otherwise, the City's commission is aged based. The City pays Financial Credit Network 25% on all regular collections that are less than 60 days old at the time of placement, 28% commission on all regular collections 61+ days old at time of placement and 38% commission on all legal collections. The age of the accounts is determined by comparing the date the debt was incurred to the date the account is entered into Financial Credit Network's system. During an average year, the collection agency remits approximately $45,000 of the delinquent accounts assigned back to the City. While the fiscal impact of issuing an RFP may be minimal, it is in the best interests of the City to obtain the best rate structure possible with an agency that has the best record of cost recovery that meets the City's high ethical and legal standards. ATTACHMENT ECOSLO Contract, 2015 -17 1. RFP For Collection of Delinquent Accounts Page 3