HomeMy WebLinkAboutResolution - 2006-R0561 - Contract - Coolectech Diversified Inc. - Finacial Collection Services - 11/21/2006Resolution No. 2006-RO561
November 21, 2006
Item No. 5.15
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Council of the City of Lubbock hereby authorizes and directs the
Mayor of the City of Lubbock to execute a Contract (#7120) by and between the City of
Lubbock and Collectech Diversified, Inc., of Lubbock, Texas, for financial collection
services, which Contract and any associated documents, are attached hereto and made a
part of this Resolution for all intents and purposes.
Passed by the City Council this 21st day of
ATTEST:
Garza, City Secretary
AS TO CONTENT:
Pamela Moon, Accounting
APPROVED A TO FORM:
n Vandiver, Attorney of Counsel
Mres/CollectechWConRes
October 31, 2006
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Resolution No. 2006-RO561
AGREEMENT FOR FINANCIAL COLLECTION SERVICES
CONTRACT #7120
THIS AGREEMENT entered into this day by and between the City of Lubbock, hereinafter called
"City" and Collectech Diversified, Inc., dba CDI, 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 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 $20.00 of $25 or $30 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 45th day following the Corporation's
receipt of the check from the City's depository bank will be forwarded promptly to the City,
and Corporation is relieved of all responsibility and rights of collection of the face amount and
service charge. On a weekly basis, the City will remit to Corporation, an amount equal to
reimbursement of advance collections of those uncollectible 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.
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. The
Corporation agrees to obtain insurance coverage as specified in Exhibit B, attached hereto, and
made part of this Agreement.
3. The term of this Agreement shall be three (3) years, commencing on November 9, 2006 and
ending on October 31, 2009.
4. Corporation shall keep full and complete records of its progress in a form agreeable to the 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
the 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 engaged 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 it's duties under this Agreement.
8. If the Corporation is not successful in collection items referred for collection by the forty-fifth
(45) day, the items will be forwarded to the City and Corporation relinquishes all rights to
collection and service charges.
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.
P.O. BOX 2000 P.O. BOX 12027
1625 13TH LUBBOCK, TX 79452
LUBBOCK, TX 79457
EXECUTED THIS 21st day of November , 2006
CITY OF LUBBOCK
COLLECTECH DIVERSIFIED, INC
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David Miller, Mayor J y Jordan, President -G
ATTEST
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Reb ca Garza
City Secretary
APPROVED AS TO CONTENT:
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Pamela Moon
Accounting
APPROVED AS TO FORM:
Attorney
EXHIBIT A
Account Collection and Rate Schedule
ACCOUNT COLLECTION
1. LP&L Accounts
Resolution No. 2006-RO561
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 Finance Director Electric Utility 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 request.
Once an account has been turned back over to LP&L, the Agency is relieved of all responsibility
and rights of collection.
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 Finance Director Electric Utility
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 filed on a compact disk or
tape . 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, Sewer Pro-Rata—Accountin
a. The Agency will perform all normal collection services on current and overdue water and sewer
pro -rata accounts. Current volume is approximately 120 accounts averaging $383. 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 Director of Accounting must approve all
written communications. Water and sewer pro -rata accounts are considered delinquent on the
101h day following the due date.
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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. Paving - Accounting
a. The Agency will perform all normal collection services on current and overdue paving accounts
on a continuous basis. Current volume is approximately 500 accounts averaging $600. The
installment billing shall consist of a statement sent at least once a month prior to due date. All
written collection procedures shall be prepared under Agency's letterhead, name, mailing
address, physical address, and phone number. The Director of Accounting must approve all
written communications. Paving accounts are considered delinquent on the 10`h day following
the due date.
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.
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 the 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.
c. The Agency shall remit to the City the gross amount of all monies received on City accounts
once per month. 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
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Director of Accounting. Account information shall be made available to City personnel upon
request.
5. Home Improvement & Mortgage Loans — Community Development
a. The Agency will occasionally performs collection services on overdue accounts owed to Urban
Renewal Agency (URA) or Lubbock Housing Finance CorporationLHFC) and City of Lubbock
on a monthly basis. An account is considered delinquent on the 30 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. Normal collection procedures may consist of these
steps:
• Written communication sent 30 days after the due date. This must adhere to collection
laws.
• Telephone contact.
• Second written communication sent 10 days after first written communication.
• Second telephone contact.
• Third written communication sent 10 days after second written communication.
• Third telephone contact.
b. The City will provide a Delinquent Accounts Report to the Agency identifying all accounts to be
worked. The Agency shall provide the city a report of collections on account to assist the City in
posting payments
c. Any account which remains uncollected on the 90a' 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:
• Written communications mailed.
• Written communications returned.
• 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 Accounting.
e. The Agency shall remit to URA of 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 of 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.
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b.
g. The City will be billed separately for the fees on the amounts collected, based on a percentage of
collections.
RATE SCHEDULE
Account Collection:
Lubbock Power & Light.
Water & Sewer Pro -rata
Auditorium/Coliseum
Home Improvement/Mortgage Loans
Paving
Check Collection (unit price per check)
23% contingency fee
10% contingency fee
10% contingency fee
10% contingency fee
9% contingency fee
$20.00 retained from collected $25.00 to $30.00 service charge (no contingency
fee) Effective until October 31", 2009.
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Resolution No. 2006-RO561
EXHIBIT B
Financial Collection Services
II. INSURANCE
SECTION A. Prior to the approval of this contract by the City, the Contractor shall furnish a
completed Insurance Certificate to the City, which shall be completed by an agent authorized to bind
the named underwriter(s) to the coverages, limits, and termination provisions shown thereon, and
which shall furnish and contain all required information referenced or indicated thereon. THE CITY
SHALL HAVE NO DUTY TO PAY OR PERFORM UNDER THIS CONTRACT UNTIL SUCH
CERTIFICATE SHALL HAVE BEEN DELIVERED TO THE CITY.
INSURANCE COVERAGE REQUIRED
SECTION B. The City reserves the right to review the insurance requirements of this section
during the effective period of the contract and to require adjustment of insurance coverages and their
limits when deemed necessary and prudent by the City based upon changes in statutory law, court
decisions, or the claims history of the industry as well as the Contractor.
SECTION C. Subject to the Contractor's right to maintain reasonable deductibles in such amounts
as are approved by the City, the Contractor shall obtain and maintain in full force and effect for the
duration of this contract, and any extension hereof, at Contractor's sole expense, insurance coverage
written by companies approved by the State of Texas and acceptable to the City, in the following
type(s) and amount(s):
Worker's Compensation - The Contractor shall elect to obtain worker's compensation coverage
pursuant to Section 406.002 of the Texas Labor Code. Further, Contractor shall maintain said
coverage throughout the term of this Contract and shall comply with all provisions of Title 5 of the
Texas Labor Code to ensure that the Contractor maintains said coverage. Any termination of
worker's compensation insurance coverage by contractor or any cancellation or non -renewal of
worker's compensation insurance coverage for the Contractor shall be a material breach of this
Contract. The contractor may maintain Occupational Accident and Disability Insurance in lieu of
Workers' Compensation. In either event, the policy must be endorsed to include a wavier of
subrogation in favor of the CITY OF LUBBOCK.
The Contractor shall also provide to the CITY OF LUBBOCK proof of Employers' Liability in an
amount no less than $500,000.
Commercial General (public) Liability insurance including coverage for the following:
a. Premises operations
b. Independent contractors
c. Products/completed operations
d. Personal injury
Other
Crime, Employee Dishonesty $100,000
Combined single limit for
bodily injury and property
damage of $500,000 per
occurrence or its equivalent.
ADDITIONAL POLICY ENDORSEMENTS
The City shall be entitled, upon request, and without expense, to receive copies of the policies and
all endorsements thereto and may make any reasonable request for deletion, revision, or
modification of particular policy terms, conditions, limitations, or exclusions (except where policy
provisions are established by law or regulation binding upon either of the parties hereto or the
underwriter of any of such policies). Upon such request by the City, the Contractor shall exercise
reasonable efforts to accomplish such changes in policy coverages, and shall pay the cost thereof
REQUIRED PROVISIONS
The Contractor agrees that with respect to the above required insurance, all insurance contracts and
certificate(s) of insurance will contain and state, in writing, on the certificate or its attachment, the
following required provisions:
a. Name the City of Lubbock and its officers, employees, and elected representatives as primary
additional insureds, (as the interest of each insured may appear) as to all applicable coverage;
b. Provide for 30 days notice to the City for cancellation, nonrenewal, or material change;
c. Provide for notice to the City at the address shown below by registered mail;
d. The Contractor agrees to waive subrogation against the City of Lubbock, its officers,
employees, and elected representatives for injuries, including death, property damage, or any
other loss to the extent same may be covered by the proceeds of insurance;
e. Provide that all provisions of this contract concerning liability, duty, and standard of care
together with the indemnification provision, shall be underwritten by contractual liability
coverage sufficient to include such obligations within applicable policies.
f. All copies of the Certificates of Insurance shall reference the project name or bid number for
which the insurance is being supplied.
NOTICES
The Contractor shall notify the City in the event of any change in coverage and shall give such
notices not less than 30 days prior the change, which notice must be accompanied by a replacement
CERTIFICATE OF INSURANCE.
All notices shall be given to the City at the following address:
Marta Alvarez- Purchasing Manager
City of Lubbock
1625 13th Street, Room L04
Lubbock, Texas 79401
SECTION D. Approval, disapproval, or failure to act by the City regarding any insurance supplied
by the Contractor shall not relieve the Contractor of full responsibility or liability for damages and
accidents as set forth in the contract documents. Neither shall the bankruptcy, insolvency, or denial
of liability by the insurance company exonerate the Contractor from liability.
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