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HomeMy WebLinkAboutResolution - 2000-R0265 - Agreement - Collectech Diversified Inc. - Checks & Accounts Collection - 07/27/2000Resolution No. 2000 80265 July 27, 2000 Item No. 47 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, an Agreement between the City of Lubbock and Collectech Diversified, Inc., dba COI, and related documents. Said Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 27th day of July , 2000. ATTEST: AaythlA&�bamell City retary APPROVED AS TO CONTENT: — Aui��In &��— Betsy Bucy, irector of Vinance APPROVED AS TO FORM: William de Haas Competition and Contracts Manager/Attorney Dh/Ccdocs/Collection Services Resolution July 7, 2000 Resolution No. 2000-R 0265 July 27, 2000 Item No. 47 AGREEMENT FOR FINANCIAL COLLECTION SERVICES THIS AGREEMENT entered into this day by and between the City of Lubbock, hereinafter called "City" and Collectech Diversified, Inc., dba COI, hereinafter called "Corporation;" WITNESSETH: WHEREAS, the City may have checks and accounts which it may desire Corporation to collect from time to time, and whereas, Corporation is qualified to collect such unpaid checks and uncollected accounts as may be referred by City; and NOW THEREFORE, the City and the Corporation mutually agree as follows: 1. Corporation agrees to collect insufficient funds checks as follows: Checks with insufficient funds shall be forwarded to the collection Corporation directly from the City's depository bank, and the amount of the insufficient checks shall be charged back by the bank against the City of Lubbock Clearing Fund Bank Account. The City of Lubbock will communicate to Corporation the total amount of insufficient checks returned to City, weekly. At that time, the Corporation will remit to City an advance of collections on those insufficient checks. As collections are made, the Corporation will remit to City the City's portion of the service charge on collected insufficient ($8.00) of $25 per collected insufficient check, weekly. The final payment for each month shall be remitted to the City no later than the second business day following the close of the month. Any check and service charge remains uncollected on the 45`h day following the Corporation's receipt of the check from the City's depository bank will be forwarded promptly to the City, and the Corporation is relieved of all responsibility and rights of collection of the face amount and the service charge. On a weekly basis, the City will remit to Corporation, an amount equal to reimbursement of advance collections of those uncollectable checks. If the Corporation receives monies on the check following the return of the check to the City, the Corporation shall forward all monies received for check and service charge to the City within three days. All fees are on a contingency basis. Lubbock, Power and Light (LP&L) will have first right of collection on all checks and drafts remitted to LP&L. LP&L will send an LP&L employee to the Collection Corporation on a daily basis and pull any checks which will be classified as unworkable to the Corporation. No service charge will be assigned to unworkable checks. Advance collections on checks and/or drafts classified as unworkable to the Corporation will be reimbursed to Corporation by City on a weekly basis. 2. Corporation agrees to perform collections on all items other than insufficient checks as specified in Exhibit A, attached hereto, and made a part of this Agreement. 3. The term of this Agreement shall be three (3) years commencing on September 1, 2000, and ending on August 31, 2003. 4. Corporation shall keep full and complete records of its progress in a form agreeable to City, which form shall be approved by City prior to commencement of collection activities and shall make such records available to City or City Internal Auditor, if requested to do so by the City. 5. Corporation shall not assign any interest in this Agreement and shall not transfer any interest in this Agreement, whatsoever, without prior consent of the City. 6. Corporation shall save and hold harmless the City from all suits, actions or claims brought on account of any activities engage in by Corporation pursuant to this Agreement. 7. City shall assist Corporation by making available to Corporation all records and data on file that will assist Corporation in the discharge of its duties under this Agreement. 8. If the Corporation is not successful in collecting items referred for collection by the forty-fifth (45) day, the items will be forwarded to the City and the Corporation relinquishes all rights to collection and service charges. Further, the Corporation shall PURGE such items and service fees from its Credit records system and hold all parties harmless. 9. Once a week the Corporation shall remit two checks to the City. One check will be the net amount of service charges collected, less the collection charge, for insufficient check collections. The second check will be any and all collections for items other than insufficient checks. 10. Corporation agrees that it will comply with all laws pertaining to collections of this nature, both federal and state. 11. This Agreement may be terminated by either party during its course by delivery upon thirty (30) days written notice of such notice to the other party at the following addresses: CITY OF LUBBOCK COLLECTECH DIVERSIFIED, INC. PO BOX 2000 PO BOX 12027 1625 13th Street LUBBOCK TEXAS 79452 LUBBOCK TEXAS 79457 EXECUTED THIS 27th day of July , 2000. CITY OF LJJBBO K WINDY SITTON, MAYOR ATTEST: f" j Kayt " arnell, City Secretary APPROVED AS TO CONTENT: Betsy Bucy, Director of Finance APPROVED AS TO FORM: ATTEST: RPM-ff'121,1w, IL William de Haas Competition and Contracts Manager/Attorney Cedocs/dWCoiiection services agreement Resolution No. 2000-80265 July 27, 2000 Item No. 47 EXHIBIT A Account Collection and Rate Schedule ACCOUNT COLLECTION 1. LP&L Accounts a. The Agency will perform all normal collection services on overdue accounts owed to LP&L on a continuous basis. An overdue account is a final account which is approximately 2 months old. All written collection procedures shall be prepared under the Agency's letterhead, name, mailing address, physical address, and phone number. The Director of Financial Services or authorized designee must approve all written communications. Current volume consists of approximately 520 overdue LP&L accounts per month with an average of $185 per account. If the collection rate falls below 10% during any 2 consecutive months, the agreement may be terminated. b. The Agency shall remit to LP&L the gross amount of all monies received on LP&L accounts once per month. The Agency will bill LP&L monthly for any service fee due by LP&L. The Agency shall honor requests by LP&L to withdraw accounts from collection upon LP&L's request. Once an account has been turned back over to LP&L, the Agency is relieved of all responsibility and rights of collection. d. The Agency shall notify LP&L of any legal expense prior to incurring such expense. No legal action shall be taken without written approval from the Director of Financial Services or authorized designee. Account information shall be made available to LP&L personnel upon request. e. LP&L will provide data on accounts to be collected via DOS ASCII file on a 3 -1.2 - high density diskette. Collection payment information is to be returned to LP&L via the same medium and format. This is a strict requirement for award of contract. No other medium or format will be accepted. All fees are on a contingency basis. 2. Water and Sewer Pro -Rata Accounts - Accounting a. The Agency will perform all normal collection services on current and overdue water and sewer pro -rata accounts. Current volume is approximately 200 accounts averaging $273. The installment billing shall consist of a statement sent at least once a month prior to the due date. All written collection procedures shall be prepared under the Agency's letterhead, name, mailing address, physical address and phone number. The Managing Director for Financial Services must approve all written communications. Water and sewer pro -rata accounts are considered delinquent on the 10th day following the due date. w ` .' b. The Agency shall remit to the City the gross amount of all monies received on City accounts once per month. The Agency will bill the City for any fee due the Agency on regular monthly statements. All fees will be on a contingency basis. The Agency shall honor requests by the City to withdraw accounts from collection. The Agency must keep the appropriate City personnel advised of any and all payment terms agreed upon by the Agency and the Payee. Once an account has been turned back over to the City, the Agency is relieved of all responsibility and rights of collection. If the Agency receives monies on the account following the return of the account to the City, all monies will be forwarded to the City within 3 days. 3. Water and Sewer Taps - Water Utilities Engineering a. The Agency will perform all normal collection services on overdue water and sewer tap accounts on a continuous basis. An overdue account is a monthly billing which has not been paid within 2 months. All written collection procedures shall be prepared under the Agency's letterhead, name, mailing address, physical address, and phone number. The Director of Financial Services must approve all written communications. Current volume is minimal with balances of $304 and up. If the collection rate falls below 10% during any 2 consecutive months, the agreement may be terminated. b. The Agency shall remit to the City the gross amount of all monies received once per month. The Agency will bill the City monthly. c. The Agency shall honor requests by the City to withdraw accounts from collection. Once an account has been turned back over to the City, the Agency is relieved of all responsibility and rights of collection. d. The Agency shall notify the City of any legal expense prior to incurring such expense. No legal action shall be taken without written approval from the Director of Financial Services. Account information shall be made available to City personnel upon request. e. Any account which remains uncollected on the 90th day following the Agency's receipt of the account from the City will be returned promptly to the city. All correspondence related to collection efforts must be returned to the City. These documents will include: (a). Copies of letters sent. (b). Copies of letters returned. (c). Notes of response by telephone. 4. Civic Center/Auditorium-Coliseum a. The Agency will perform all normal collection services on current and overdue Civic Center and Auditorium -Coliseum accounts which the City desires handled by a collection Agency. Civic Center and Auditorium -Coliseum accounts consist mainly of rent accounts. b. All written collection procedures shall be prepared under the Agency's letterhead, name, mailing address, physical address, and phone number. The Director of Financial Services must approve all written communications. C. The Agency shall remit to the City the gross amount of all monies received on City accounts once per week. The Agency may bill the City monthly. All fees will be on a contingency fee basis. The Agency shall honor requests by the City to withdraw accounts from collection. Once an account has been turned back over to the City, the Agency is relieved of all responsibility and rights of collection and monies received on an account that has been withdrawn will be forwarded to the City within 3 days. The Agency shall notify the City of any legal expense prior to incurring such expense. No legal action shall be taken without written approval from the Director of Financial Services. Account Information shall be made available to City personnel upon request. 5. Home Improvement & Mortgage Loans - Community Development a. The Agency will perform all normal collection services on overdue accounts owed to Urban Renewal Agency (URA) or Lubbock Housing Finance Corporation (LHFC) and City of Lubbock on a monthly basis. On occasion, there may be accounts which will require continuous collection. An account is considered delinquent on the 30th day following the due date. All written collection procedures shall be prepared under the Agency's letterhead, name, mailing address, physical address and phone number. All written communication must be approved by the Director of Financial Services. Normal collection procedures may consist of these steps: (a). Written communication sent 30 days after the due date. This must adhere to collection laws. (b). Telephone contact. (c). Second written communication sent 10 days after first written communication. (d). Second telephone contact. (e). Third written communication sent 10 days after second written communication. (f). Third telephone contact. b. The City will provide a Delinquent Accounts Report to the Agency monthly identifying all accounts to be worked. The Agency shall provide the City a report of collections on account monthly to assist the City in posting payments. c. Any account which remains uncollected on the 90th day following the due date will be returned promptly to the City. All correspondence related to collection efforts must be returned to the City. These documents will include: (a). Written communications mailed. (b). Written communications returned. (c). Notes of response by telephone. d. Account information will be made available to City personnel upon request. All information which is vital to the City's ability to foreclose on the property must be returned to the City. The Agency shall notify the City of any legal expense prior to incurring such expense. No legal action shall be taken without written approval from the Director of Financial Services. e. The Agency shall remit to URA or LHFC via the City of Lubbock Community Development Department gross amount of all monies received on the loans once per week. The Agency will bill URA or LHFC monthly. Current volume consists of 90 delinquent loans per month with monthly payments averaging $100. f. If an account is referred to the Agency for continuous collection, the same collection procedures apply. However, if any account is paid current for two consecutive months, it shall be returned to URA or LHFC and the Agency will be relieved of all responsibility and rights of collection. g. The City will be billed separately for the fees on the amounts collected, based on a percentage of collections. 6. RATE SCHEDULE Account Collection: Lubbock Power & Light Water & Sewer Pro -rata Water & Sewer Taps Auditorium/Coliseum Home Improvement & Mortgage Loans Paving assessments 28% contingency fee 10% contingency fee 10% contingency fee 10% contingency fee 10%a contingency fee 10% contingency fee