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SR 12-18-2018 3H City Council Report City Council Meeting: December 18, 2018 Agenda Item: 3.H 1 of 3 To: Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Revenue Subject: Award Contract to I.C. System, Inc. for Collections Agency Services Recommended Action Staff recommends that the City Council: 1. Award RFP# 195 to I.C. System, Inc., a Minnesota-based company, for Collections Agency Services for the Finance Department; 2. Authorize the City Manager to negotiate and execute an agreement with I.C. System, Inc. in an amount not to exceed $120,000 for five years with future year funding contingent on Council budget approval. Summary The Finance Department has a comprehensive program for the collection of delinquent debts due to the City. A key component of this program is the use of an external collections agency when internal collection efforts have been unsuccessful. The use of external collection services to assist with the recovery of delinquent fees, taxes and fines ensures that the City protects its assets. Staff recommends that the City award an agreement to I.C. System, Inc. in an amount not to exceed $120,000 over a five-year period. Discussion The City uses both internal and external assets to collect outstanding debt related to taxes, fees, and other charges due to the City. Staff uses the external collections agency to recover delinquent debt when City staff has exhausted all internal collection efforts. City staff internal collections efforts for FY 2017-18 returned 38% or $141,481 of the total amount of delinquent accounts processed. An additional 38% or $87,000 of the amount referred was collected through the use of an external collections agency, which exceeds the industry average of 20%. The City’s existing contract with Transworld Systems, Inc. expires on December 30, 2018. 2 of 3 The external collections agencies provide the City with a suite of services and tools to maximize the recovery of delinquent debts such as fire inspections, utilities, noise violations, and swim center fees. Vendor Selection: RFP Data RFP Posting Date RFP Posted On RFP Advertised In (City Charter & Municipal Code) # of Vendors Downloaded # of Submittals Received Date Publicly Opened 09/07/2018 City's Online Bidding Site Santa Monica Daily Press 29 10 10/05/18 Justification to Award Based on the selection criteria in SMMC 2.24.072, I.C. System, Inc. was selected as the best qualified firm to provide collection agency services. I.C. System, Inc. was selected based on the firm’s 80 years of experience in the industry, 30 years of experience working with government entities, cost of services, and FISA score, which identifies the company as 30% more secure than the average agency in the industry. In addition, the firm maintains a Professional Practice Management System (PPMS) certification which requires periodic independent CPA and independent third-party auditor reviews and demonstrates the agency’s commitment to continuous improvement to reduce errors, increase communication, and adhere to industry standards. Financial Impacts and Budget Actions RFPs Received I.C. System, Inc. Collection Bureau of America States Recovery Systems, Inc. ARS National Services, Inc. Transworld Systems, Inc. Reliant Capital Solutions Sequoia Financial Services Rash Capital Solutions Client Services, Inc. FedChex Recovery, LLC Selection Criteria Municipal Code SMMC 2.24.072 Evaluation Criteria Experience, technical competence, stability, references, ability to meet work plans, timelines, quality control, cost of services, cost and responses to RFP. 3 of 3 Staff seeks authority to award a professional services agreement with I.C. System, Inc. for collections agency services. Professional Services Agreement FY 2018-19 Request Amount FY 2018-19 Budget Finance Department/Account# Total Contract Amount $24,000 01300005.552010 $120,000 The collections agency fees will be a percentage of actual collections (19.5% for most collections and 30% for collections requiring legal action). The contract amount is based on anticipated collections. Funds in the amount of $24,000 are available in the FY 2018-19 budget in the Finance Department. Future year funding is contingent on Council budget approval. Prepared By: David Carr, Assistant City Treasurer Approved Forwarded to Council Attachments: A. Oaks Initiative Form CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a public benefit. If the public benefit is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1. Personal services contracts in excess of $25,000 over any 12-month period; 2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period; 3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6. Tax abatement, exception, or benefit of a value in excess of $5,000 in any 12- month period; or 7. Payment of cash or speci of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ Ó¿®µ Ð±´´¿®¼Ð®±°±-¿´ Ý±±®¼·²¿¬±® ïïñïëñîðïè ³°±´´¿®¼à·½-§-¬»³ò½±³êëïóìèïóêìðê ×òÝò Í§-¬»³ô ×²½ò Ö±¸² Û®·½µ-±²ô Õ«®¬ Ø»·²¾·¹²»®ô Ó·½¸»´´» Ü±ª»ô Ì±³ Û³³- Þ¿®¾¿®¿ Û®·½µ-±²ô Ö±¸² Û®·½µ-±² ×Êô Ö»²²·º»® Ö±²»-ô Ö·´´ Ö±¸¿²²»-ô Õ®·-¬»² Û®·½µ-±²ô Ö±-»°¸ Û®·½µ-±²ô Ö±¸² Û®·½µ-±² ××× REFERENCE: Agreement No. 10787 (CCS)