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HomeMy WebLinkAbout2012/10/02 Item 08~~ CITY COUNCIL AGENDA STATEMENT ~~ CITY OF CHUTA VISTA OCTOBER 2, 2012, Item ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND APPROVING AN AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND FINANCIAL CREDIT NETWORK, INC., TO PROVIDE COLLECTION AGENCY SERVICES / [,~ SUBMITTED BY: FINANCE DIRECT REASURER /t"~ ]" M~ REVIEWED BY: CITY MANAGER ASSISTANT Y MANAGE DIRECTOR OF DEVELOPMEN SERVICES 4/STH5 VOTE: YES ~ NO SUMMARY In June 2012, the City of Chula Vista issued a Request for Proposal (RFP) for a full service collection agency to provide collection services for delinquent accounts receivable. After a thorough selection process, the City has selected Financial Credit Network (FCN) to provide collection agency services. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed action for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378(b)(4) of the State CEQA; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION That Council adopt the resolution. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION In January of 2012, the City Council endorsed the City Manager's Fiscal Recovery and Progress Plan. This plan built upon the successes of the City's Fiscal Health Plan, including new components necessary to achieve fiscal recovery beyond a single budget cycle. A key 8-1 OCTOBER 2, 2012, Item Pte' Page 2 of 5 focus of both the Fiscal Health Plan and the Fiscal Recovery and Progress Plan is the generation of additional revenues while preserving and protecting current revenues. Increasing the City's rate of recovery of monies owed supports this directive to increase and protect revenues, without increasing fees or taxes. Contracting with a firm that specializes in collections is recommended to increase the City's collection rate. On June 8, 2012, the City of Chula Vista issued a Request for Proposal (RFP) for a full service collection agency to provide collection services for delinquent accounts receivable. Delinquent accounts to be pursued by the collections agent include, but are not limited to the following billing accounts: utilities, false alarm, jail booking, business license, property damage, and miscellaneous accounts, as described below: Utility Billing -Utility billings include sewer and storm drain charges that are billed on a bi-monthly basis to residents and businesses within a specific geographic area of the City. The City attempts to collect these balances through invoices, past due notices and phone calls when feasible. False Alarm Billing -When any emergency alarms, messages, signals or notices are received by the Chula Vista Police Department Communications Center which results in a police response and in which the alarm proves to be a false alarm, the owner and/or occupier of the property is subject to a false alarm assessment. The City attempts to collect these balances through invoices, past due notices and phone calls when feasible. Jail Booking Fees -The City of Chula Vista operates a jail (holding) facility. Individuals who are arrested by the Chula Vista Police Department and booked in the Chula Vista Police Department Holding Facility are subject to a $175 booking fee, if convicted of a crime as a result of the arrest by the Chula Vista Police Department. The City attempts to collect these balances through invoices. Business License -Business licenses are required for all businesses located within the City. The City attempts to collect these balances through invoices, past due notices and phone calls when feasible. Property Damaee -Property Daniage invoices are a result of traffic collisions, vandalism, or other incidents which cause damage to City property. The City attempts to collect these balances by reporting the losses to insurance companies, sending invoices to the responsible party(ies), monthly statements, and court-ordered restitution. Miscellaneous Accounts -Miscellaneous accounts are any accounts other than those named above, determined to be eligible for collection agency services. Examples include checks for returned for non-sufficient funds, stop payments, emergency services cost recovery, development processing staff time reimbursements, special events staff time reimbursements, and other miscellaneous City services. In accordance with Municipal Code §2.56.110(c), the RFP was advertised in the Star News, posted on the City's Planet Bids website, as well as sent out directly to five firms which had been identified as potential bidders for collection agency services. The City received five 8-2 OCTOBER 2, 2012, Item ~ Page 3 of 5 responsive bids. A four person selection committee, comprised of Finance and Police Department staff, reviewed the bid responses to assess each firm's qualifications to provide the services as detailed in the RFP. Following this review, four firms were invited to participate in interviews with the selection committee. Table 1 below details the firms that received the RFP directly; the firms that responded to the RFP; and the firms that participated in the interview process. Table 1 1. Coast to Coast Recovery 2. Financial Credit Network (FCN) 3. Gila dba MSB 4. NCS Plus Inc. 5. Transworld Systems 1. Financial Credit Network (FCN) 2. HP Sears 3. Lemore Services, Inc. 4. National Recovery Agency 5. Perm Credit Corp. 1. Financial Credit Network (FCN) 2. HP Seazs 3. National Recovery Agency 4. Penn Credit Corp. Based upon the results of the RFP selection process, staff recommends contracting with Financial Credit Network (FCN) to provide collection agency services. FCN demonstrated that they are well qualified to provide the required services and offer a combination of knowledge and services supporting optimum recovery rates. FCN currently serves more than 500 clients, including 40 city and county public sector clients in the state of California. Local agencies contracting with FCN include the cities of Poway, La Mesa, El Cajon, and San Marcos. The firm is licensed to operate in all but 16 states. In addition to extensive relevant knowledge and experience, FCN services support increased collection rates. These services include an in-house legal department and reporting to all three credit reporting agencies: Experian, TransUnion and Equifax. Consumers will have multiple repayment options, including: • In person • By mail • Visa/ MasterCazd/ American Express/ Debit Card payments over the phone • Electronic checks, one-time or recurrhig • MoneyGram • Visa/ MasterCard/ American Express via FCN's website A key factor in the selection of FCN is their multi-language program, which has an initial focus on Spanish speakers. Through internal training, FCN is working toward all employees capable of communicating basic information to Spanish-speaking consumers. All Spanish language correspondence and telephone messages utilize a telephone number which is greeted in Spanish and directly h-ansfen•ed to aSpanish-speaking account 8-3 OCTOBER 2, 2012, Item ~ Page 4 of 5 representative. All consumer correspondence, including legal documents, has been professionally translated. This Spanish-translation is automatically included on the reverse of all correspondence, without any action required on the part of the conswner. The other firms interviewed were prepared to send correspondence in Spatush only upon request of the conswner. The next target area for their multi-language program is the Asian community. Current FCN staff includes Hmong speakers, and they are recruiting for account representatives fluent in Tagalog, Vietnamese, and Cantonese. The multi-language program supports higher recovery rates among non-English speakers. FCN reports an overall recovery rate of 22%, which compares favorably to the recovery rates of the other bidders. In exchange for collection services, FCN will retain 20% of the funds collected. If legal action is required, an additional 10% will be retained (total of 30% retention). These rates are compazable to the rates proposed by the other bidders, as summarized in Table 2 below. Table 2 Financial Credit Network (FCN) 22.00% 20.00% 30.00% National Recovery Agency 18.74% 17.50% 40.00% Penn Credit 18.17% 18.00% 28.00% HP Sears 17.74% 18.00% 25.00% * `Base Fee' and `Fee if Legal Required' reflect~ercent offunds recovered to be retained by collection agency as paymentfor collecfron services provided In addition to the collection services provided by FCN described above, the firm will provide on-site customized collection training to City staff at no additional cost. Because of their extensive knowledge and experience with municipal collections in the state of California; their high collection success rate; and provision of services not offered by the other bidders, contract award to FCN is recommended. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific. Consequently the 500-foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT All contract costs will be offset by increased collection of delinquent accounts. These costs, as well as the net positive impact to the City, will vary based upon the value of debts turned over for collections and the rate of collection success. The City has not recently had a collection agency under contract and staff is in the process of identifying the delinquent accowits to be turned over for collections. Preliminary estimates identify more than $2 million in delinquent accounts to be immediately turned over for collections (property damage claims, jail booking fees, NSF checks and miscellaneous accounts receivable). 8-4 OCTOBER 2, 2012, Item ~ Page 5 of > ONGOING FISCAL IMPACT All contract costs will be offset by increased collection of delinquent accounts. These costs, as well as the net positive impact to the City; will vary based upon the value of debts tamed over for collections and the rate of collection success. ATTACHMENTS 1. Agreement between City of Chula Vista and Financial Credit Network, Inc., to Provide Collection Agency Services Prepared by: Tzffany Allen, Treasury Manager, Finance Deparbnent 8-5 THE ATTACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL Glen R. Googins~}.~ ~ ~1\=J~.dlt~X}t.1~.vi City Attorney J Dated: q 2 b / ti AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND FINANCIAL CREDIT NETWORK, INC. TO PROVIDE COLLECTING AGENCY SERVICES 8-6 Agreement between City of Chula Vista and Financial Credit Network, Inc., To Provide Collection Agency Services This agreement (Agreement), effective is between the City-related entity whose name and business form is indicated on Exhibit A, Paragraph 2, (City), and the entity whose name, business form, place of business and telephone numbers are indicated on Exhibit A, Paragraphs 4 through 6, (Consultant), and is made with reference to the following facts: RECITALS WHEREAS, the City of Chula Vista Finance Director/Treasurer is responsible for collecting all City revenue including taxes, assesments, licenses, permits, fines, penalties and fees for services; and WHEREAS, the City desires to contract with a full service collection agency to provide collection services for delinquent accounts receivable; and WHEREAS, this Agreement involves the performance of Collection Agency Services for delinquent accounts receivables including, but not limited to, the following billing accounts: utilities, false alarm, jail booking, business license, property damage, and miscellaneous accounts; and WHEREAS, Consultant warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Consultant to City in accordance with the time frames and the terms and conditions of this Agreement. [End of Recitals. Next Page Starts Obligatory Provisions.] Page I Two Party Agreement Between flee City of Cleu[a Visfa arsd Financr~j'ridit Nehvork, Inc to Provide Coi[eM[¢n Agency Services C \Users\tiffanya\Docwnents\rinanoe R&R\Conwlten¢\Collection Agency RFP\FCN A~eement\FCN Agreement 2012-09-25.doc OBLIGATORY PROVISIONS PAGES NOW, THEREFORE, for valuable consideration the City and Consultant do hereby mutually agree as follows: All of the Recitals above are incorporated into this Agreement by this reference. ARTICLE I. CONSULTANT'S OBLIGATIONS A. General 1. General Duties. Consultant .shall perform all of the services described on Exhibit A, Paragraph 7 (General Duties). 2. Scope of Work and Schedule. In performing and delivering the General Duties, Consultant shall also perform the services, and deliver to- Uity the "Deliverables" described in Exhibit A, Paragraph 8, entitled "Scope of Work and Schedule," according to, and within the time frames set forth in Exhibit A, Paragraph 8, time being of the essence of this agreement. The General Duties and the work and Deliverables required in the Scope of Work and Schedule shall be referred to as the "Defined Services." Failure to complete the Defined Services by the times indicated does not, except at the option of the City, terminate this Agreement. a. Reductions in Scope of Work. City may independently, or upon request from Consultant, from time to time, reduce the Defined Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction in the compensation associated with the reduction. b. Additional Services. In addition to performing the Defined 'Services, City may require Consultant to perform additional consulting services related to the Defined Services (Additional Services), and upon doing so in writing, if they are within the scope of services offered by Consultant, Consultant shall perform same on a time and materials basis at the rates set forth in the "Rate Schedule" in Exhibit A, Paragraph 10(C), unless a separate fixed fee is otherwise agreed upon. All compensation for Additional Services shall be paid monthly as billed. 3. Standard of Care. The Consultant expressly warrants that the work to be performed pursuant to this Agreement, whether Defined Services or Additional Services, shall be performed in accordance with the standazd of care ordinarily exercised by members of the profession currently practicing under similaz conditions and in similaz locations. a. No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Consultant of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Consultant or its subcontractors. Page 2 Tivo Party Agreement Between the City ojCleula Vista aad Financ~~di! Netvork, Lec to Provide Co[[eMion Agenry Services C.\Users~rifravya\Docmnents¢inance R&R\Cotssultants\Collection Agency RFP\FCN Agreement\FCN Agreement 201?-09-25.doc B. Application of Laws. Should a federal or state law pre-empt a local law, or regulation, the Consultant must comply with the federal or state law and implementing regulations. No provision of this Agreement requires the Consultant to observe or enforce compliance with any provision, perform any other act, or do any other thing in contravention of federal, state, territorial, or local law, regulation, or ordinance. If compliance with any provision of this Agreement violates or would require the Consultant to violate any law, the Consultant agrees to notify City immediately in writing. Should this occur, the City and the Consultant agree that they will make appropriate arrangements to proceed with or, if necessary, amend or terminate this Agreement, or portions of it, expeditiously. Subcontractors. Consultant agrees to take appropriate measures necessary to ensure that all participants utilized by the Consultant to complete its obligations under this Agreement, such as subcontractors, comply with all applicable laws, regulations, ordinances, and policies, whether federal, .state, or local, affecting Project implementation. In addition, if a subcontractor is expected to fulfill any responsibilities of the Consultant under this Agreement, the Consultant shall ensure that the subcontractor carries out the Consultant's responsibilities asset forth in this Agreement. C. Insurance General. Consultant must procure and maintain, during the period of performance of this Agreement, and for twelve months after completion, policies of insurance from insurance companies to protect against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work under this Agreement and the results of that work by the Consultant, his agents, representatives, employees or subcontractors, and provide documentation of same prior to commencement of work. 2. Minimum Scope of Insurance. Coverage must be at least as broad as: a. CGL. Insurance Services Office Commercial General Liability coverage (occurrence Form CG0001). b. Auto. Insurance Services Office Form Number CA 0001 covering Automobile Liability, Code 1 (any auto). c. WC. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. d. E&O. Professional Liability or Errors & Omissions Liability,insurance appropriate to the Consultant's profession. Architects' and Engineers' coverage is to be endorsed to include contractual liability. 3. Minimum Limits of Insurance. Consultant must maintain limits no less than those included in the table below: Page 3 Two Parry Agreen:en[ Be[ween the City of Chula V&ta and Fin¢nci~'~i[ Network, L:a to Provide Collection Agency Services Q\Users\tiRanya\Docmnents\Finance R&R\ConsultanGS\Collectlon Agency RFP\FCN Ae`reemen[\FC!S Ageemev[ 2012-09-25.doc i. General Liability: $1,000,000 per occmTence for bodily injury, personal injury, (Including (including death), and property damage. If Commercial General operations, Liability insurance with a general aggregate limit is used, either products and the general aggregate limit must apply separately to this completed Project/location or the general aggregate limit must be twice the operations, as required occurrence limit. a licable) ii. Automobile $1,000,000 per accident for bodily injury, including death, and Liability: property damage. iii. Workers' Statutory Compensation $1,000,000 each accident Employer's $1,000,000 disease-policy limit Liability: $1,000,000 disease-each em loyee iv. Professional $1,000,000 each occurrence - Liability or Errors & Omissions Liability: 4. 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 will reduce or eliminate such deductibles or self-insured retentions as they pertain to the City, its officers, officials, employees and volunteers; or the Consultant will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. 5. Other Insurance Provisions. The general liability, automobile liability, and where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: a. Additional Insureds. City of Chula Vista, its officers, officials, employees, agents, and volunteers aze to be named as additional insureds with respect to all policies of insurance, including those with respect to liability azising out of automobiles owned, leased, hired or borrowed by or on behalf of the Consultant, where applicable, and, with respect to liability arising out of work or operations performed by or on behalf of the Consultant, including providing materials, parts or equipment furnished in connection with such work or operations. The general liability additional insured coverage must be provided in the form of an endorsement to the Consultant's insurance using ISO CG ZO10 (11/85) or its equivalent. Specifically, the endorsement must not exclude Products/Completed Operations coverage. b. Primary Insurance. The Consultant's General Liability insurance coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance of the Page 4 Two Party Agreemeffi Between the City of Chula Vista mtd Finan~x~CT~i[ Network, L:c to Provide Co!lecrion Agency Services CBUsers\tiffanya\Documents\Finance R&R\Consultants\Collection Agency RFP\FCN Ageement\FCN Ageement 2012-09-25 doc Consultant and in no way relieves the Consultant from its responsibility to provide insurance. c. Cancellation. The insurance policies required by this Agreement shall not be canceled by either party, except after thirty days' prior written notice to the City by certified mail, return receipt requested. The words "will endeavor" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives" shall be deleted from all certificates. d. Active Negligence. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insureds in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code. e. Waiver of Subrogation. Consultant's insurer will provide a Waiver of Subrogation in favor of the City for each required policy providing coverage for the term required by this Agreement. 6. Claims Forms. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are written on a claims-made form: a. Retro Date. The "Retro Date" must be shown, and must be before the date of the Agreement or the beginning of the work required by the Agreement. b. Maintenance and Evidence. Insurance must be maintained and evidence of insurance must be provided for at least five years after completion of the work required by the Agreement. c. Cancellation. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a "Retro Date" prior to the effective date of the Agreement, the Consultant must purchase "extended reporting" coverage for a minimum of five years after completion of the work required by the Agreement. d. Copies. A copy of the claims reporting requirements must be submitted to the City for review. 7. Acceptability of Insurers. Insurance is to be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best's rating of no less than A V. If insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best's rating of no less than A X. Exception may be made for the State Compensation Fund when not specifically rated. 8. Verification of Coverage. Consultant shall furnish the City with original certificates and amendatory endorsements effecting coverage required by Section LC. of this Agreement. The endorsements should be on insurance industry forms, provided those endorsements Page 5 Two Party Agreement Between the Ciry ajCLala Vuta and Finan~Cte~li[ Network, Inc to Provide Collecfion Agency Services Q\Users\fifinnya\Docwnen[s\Fvravice R&R\Covsultan6\Collection Agency RFP\FCN Agreement\FCN Ageement 2012-09-25.doc or policies conform to the requirements of this Agreement. All certificates and endorsements are to be received and approved by the City before work commences. The City reserves the light to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 9. Subcontractors. Consultant must include all subconsultants as insureds under its policies or famish separate certificates and endorsements for each subconsultant. All coverage for subconsultants is subject to all of the requirements included in these specifications. 10. Not a Limitation of Other Obligations. Insurance provisions under this Article shall not be construed to limit the Consultant's obligations under this Agreement, including Indemnity. D. Security for Performance 1. Performance Bond. In the event that Exhibit A, at Pazagraph 18, indicates the need for Consultant to provide a Performance Bond (indicated by a check mazk in the parenthetical space immediately preceding the subparagraph entitled "Performance Bond"), then Consultant shall provide to the City a performance bond, in the amount indicated at Exhibit A, Pazagraph 18, in the form prescribed by the City and by such sureties which are authorized to transact such business in the State of California, listed as approved by the United States Department of Treasury Circular 570, http://vvww.fms.treas.gov/c57Q, and whose underwriting limitation is sufficient to issue bonds in the amount required by the Agreement, and which also satisfy the requirements stated in Section 995.660 of the Code of Civil Procedure, except as provided otherwise by laws or regulations. All bonds signed by an agent must be accompanied by a certified copy of such agent's authority to act. Surety companies must be duly licensed or authorized in the jurisdiction in which the Project is located to issue bonds for the limits so required. Form must be satisfactory to the Risk Manager or City. 2. Letter of Credit. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subpazagraph entitled "Letter of Credit"), then Consultant shall provide to the City an irrevocable letter of credit callable by the City at its unfettered discretion by submitting to the bank a letter, signed by the City Manager, stating that the Consultant is in breach of the terms of this Agreement. The letter of credit shall be issued by a bank, and be in a form and amount satisfactory to the Risk Manager or City Attorney which amount is indicated in the space adjacent to the term, "Letter of Credit," in Exhibit A, Paragraph 18. 3. Other Security. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide security other than a Performance Bond or a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subpazagraph entitled "Other Security"), then Consultant shall provide to the City such Page 6 Two Parry Agreement Between the Ciry oJChn[a Vista med Finat:~CT~[t tVebvork, Inc fo Provide Co[[ecNon Agency Services C \Users\ttSanya\Docwnents\Fivance R&R\Covsultavtr\CollecUOn Agency RFP\FCN Agreement\FCN Agieamevt 2012-09-25.doc other security therein listed in a form and amount satisfactory to the Risk Manager or City Attorney. E. Business License. Consultant agrees to obtain a business license from the City and to otherwise comply with Title 5 of the Chula Vista Municipal Code. ARTICLE IL CITY OBLIGATIONS A. Consultation and Cooperation. City shall regularly consult the Consultant for the purpose of reviewing the progress of the Defined Services and Schedule, and to provide direction and guidance to achieve the objectives of this Agreement. The City shall allow Consultant access to its office facilities, files and records, as deemed necessary and appropriate by the City, throughout the term of this Agreement. In addition, City agrees to provide the materials identified at Exhibit A, Paragraph 9, with the understanding that delay in the provision of those materials beyond thirty days after authorization to proceed, shall constitute a basis for the justifiable delay in the Consultant's performance. B. Compensation. L Following Receipt of Billine. Upon receipt of a properly prepared bill from Consultant, submitted to the City as indicated in Exhibit A, Pazagraph 17, but in no event more frequently than monthly, on the day of the period indicated in Exhibit A, Paragraph 17, City shall compensate Consultant for all services rendered by Consultant according to the terms and conditions set forth in Exhibit A, Paragraph 10, adjacent to the governing compensation relationship indicated by a "checkmazk" next to the appropriate an~angement, subject to the requirements for retention set forth in Paragraph 18 of Exhibit A, and shall compensate Consultant for out of pocket expenses as provided in Exhibit A, Paragraph 11. 2. Supnorting Information. Any billing submitted by Consultant shall contain sufficient information as to the propriety of the billing, including properly executed payrolls, time records, invoices, contracts, or vouchers describing in detail the nature of the charges to the Project in order to permit the City to evaluate that the amount due and payable is proper, and such billing shall specifically contain the City's account number indicated on Exhibit A, Paragraph 17(C) to be charged upon making such payment. 3. Exclusions. In determining the amount of the compensation City will exclude any cost: 1) incurred prior to the effective date of this Agreement; or 2) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of the Consultant, its agents, employees, or subcontractors. a. Errors and Omissions. In the event that the City Administrator determines that the Consultant's negligence, errors, or omissions in the performance of work under this Agreement has resulted in expense to City greater than would have resulted if there were no such negligence, errors, omissions, Consultant shall reimburse City for any additional expenses incurred by the City. Nothing in this Page 7 Two Parry Agreement Befween the Ciry ojChula Vista m¢d Finmv$gLCjr~(i[ Network, Inc. to Provide Collectiott Agency Services C \Users`.dfrattya\Docmnents\finance A&R\Consultan6\Collectlon Agency RFP\FCN AgreemevtlrCN Ageement 2012-09-'.S.doc paragraph is intended to limit City's rights under other provisions of this Agreement. 4. Payment Not Final Ap rp oval. The Consultant understands and agrees that payment to the Consultant for any Project cost does not constitute a City final decision about whether that cost is allowable and eligible for payment under the Project and does not constitute a waiver of any violation of Consultant of the terms of the Agreement. The Consultant acknowledges that City will not make a final determination about the eligibility of any cost until the final payment has been made on the Project or the results of an audit of the Project requested by the City has been completed, whichever occurs latest. If City determines that the Consultant is not entitled to receive any portion of the compensation due or paid, City will notify the Consultant in writing, stating its reasons. The Consultant agrees that Project closeout will not alter the Consultant's responsibility to return any funds due City as a result of later refunds, corrections, or other similar transactions; nor will Project closeout alter the right of City to disallow costs and recover funds provided for the Project on the basis of a later audit or other review. a. Consultant's Obligation to Pay. Upon notification to the Consultant that specific amounts are owed to City, whether for excess payments or disallowed costs, the Consultant agrees to remit to City promptly the amounts owed, including applicable interest. ARTICLE III. ETHICS A. Financial Interests of Consultant 1. Consultant is Designated as an FPPC Filer. If Consultant is designated on Exhibit A, Paragraph 14, as an "FPPC filer," Consultant is deemed to be a "Consultant" for the purposes of the Political Reform Act conflict of interest and disclosure provisions, and shall report economic interests to the City Clerk on the required Statement of Economic Interests in such reporting categories as are specified in Paragraph 14 of Exhibit A, or if none are specified, then as determined by the City Attorney. 2. No Participation in Decision. Regardless of whether Consultant is designated as an FPPC Filer, Consultant shall not make, or participate in making or in any way attempt to use Consultant's position to influence a governmental decision in which Consultant knows or has reason to know Consultant has a financial interest other than the compensation promised by this Agreement. Seazch to Determine Economic Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant warrants and represents that Consultant has diligently conducted a search and inventory of Consultant's economic interests, as the term is used in the regulations promulgated by the Fair Political Practices Commission, and has determined that Consultant does not, to the best of Consultant's knowledge, have an economic interest which would conflict with Consultant's duties under this Agreement. Page 8 Two Party Agreement Between the Ciry ojChula Gisfa and Finan$q[(~~fi1 Ne[wor$ Inc. !o Provide Collection Agency Services C:\Users\hffenya\Documents\Finence R&R\Consulbnts\Collaction Agency RFY\FCN Ag2eem®[\FCN Agaement 2012-04-2Sdoc 4. Promise Not to Acquire Conflictin¢ Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will not acquire, obtain, or assume an economic interest during the term of this Agreement which would constitute a conflict of interest as prohibited by the Fair Political Practices Act. 5. Duty to Advise of Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant fisther warrants and represents that Consultant will immediately advise the City Attorney if Consultant learns of an economic interest of Consultant's that may result in a conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated thereunder. 6. Specific Warranties Aeainst Economic Interests. Consultant warrants, represents and agrees that: a. Neither Consultant, nor Consultant's immediate family members, nor Consultant's employees or agents (Consultant Associates) presently have any interest, directly or indirectly, whatsoever in any property which may be the subject matter of the Defined Services, or in any property within 2 radial miles from the exterior boundaries of any property which may be the subject matter of the Defined Services, (Prohibited Interest), other than as listed in Exhibit A, Paragraph 14. b. No promise of future employment, remuneration, consideration, gratuity or other reward or gain has been made to Consultant or Consultant Associates in connection with Consultant's performance of this Agreement. Consultant promises to advise City of any such promise that may be made during the Term of this Agreement, or for twelve months thereafter. c. Consultant Associates shall not acquire any such Prohibited Interest within the Term of this Agreement, or fox twelve months after the expiration of this Agreement, except with the written permission of City. d. Consultant may not conduct or solicit any business for any party to this Agreement, or for any third party that may be in conflict with Consultant's responsibilities under this Agreement, except with the written permission of City. IV. LIQUIDATED DAMAGES A. Application of Section. The provisions of this section apply if a Liquidated Damages Rate is provided in Exhibit A, Paragraph 13. 1. Estimating Damages. It is acknowledged by both parties that time is of the essence in the completion of this Agreement. It is difficult to estimate the amount of damages resulting from delay in performance. The parties have used their judgment to arrive at a reasonable amount to compensate for delay. Page 9 Two Party Agreement Between t&e Ciry ojC&a[a ~sfa and Finan$pL~rg(& Network, lnc. to Provide Co[lec[ion Agency Services C'\Users~tiffenya\Documents\Finanoe R&R\Consultavts\Collecbon Agency RFP\FCN Ageement\FCN Agreement 2912-09-25.doo 2. Amount of Penalty. Failure to complete the Defined Services within the allotted time period specified in this Agreement shall result in the_ following penalty: For each consecutive calendar day in excess of the time specified for the completion of the respective work assigmnent or Deliverable, the Consultant shall pay to the City, or have withheld from monies due, the sum of Liquidated Damages Rate provided in Exhibit A, Paragraph 13 (Liquidated Damages Rate). 3. Request for Extension of Time. If the performance of any act required of Consultant is directly prevented or delayed by reason of strikes, lockouts, labor disputes, unusual governmental delays, acts of God, fire, floods, epidemics, freight embargoes, or other causes beyond the reasonable control of the Consultant, as determined by the City, Consultant shall be excused from performing that act for the period of time equal to the period of time of the prevention or delay. In the event Consultant claims the existence of such a delay, the Consultant shall notify the City's Contract Administrator, or designee, in writing of that fact within ten calendar days after the begimvng of any such claimed delay. Extensions of time will not be granted for delays to minor portions of work unless it can be shown that such delays did or will delay the progress of the work. ARTICLE V. INDEMNIFICATION A. Defense, Indemnity, and Hold Harmless. 1. General Requirement. Except for liability for Design Professional Services covered under Article V., Section A.2., Consultant shall defend, indemnify, protect and hold harmless the City, its elected and appointed officers, agents and employees, from and against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Defined Services or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses (including without limitations, attorneys fees) arising from the sole negligence, active negligence or willful misconduct of the City, its officers, employees. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party. 2. Design Professional Services. If Consultant provides design professional services, as defined by California Civil Code section 2782.5, as may be amended from time to time, Consultant shall defend, indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or relating to the negligence, recklessness, or willful misconduct of Consultant, its officials, officers, employees, agents, consultants, and contractors arising out of or in connection with the Page 10 Two Party Agreement Between flee City ojCkula Prsta and Finan~y(_Ct~it Ne[work, L:e to Provide Collection Agency Services C'\Users\tifranya\Documenfs\Fu~ance R&R\Covsultants\Collection Agency RFP~FCN Agrennent\FCN Agreement 201?-09-25.doc performance of Consultant's services. Consultant's duty to defend, indemnify, and hold harmless shall not include any claims or liabilities arising from the sole negligence, active negligence or willful misconduct of the City, its agents, officers or employees. This section in no way alters, affects or modifies the Consultant's obligations and duties under this Agreement. 3. Costs of Defense and Award. Included in the obligations in Sections A.1 and A.2, above, is the Consultant's obligation to defend, at Consultant's own cost, expense and risk, any and all suits, actions or other legal proceedings, that may be brought or instituted against the City, its directors, officials, officers, employees, agents and/or volunteers, subject to the limitations in Sections A.1. and A.2. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, agents and/or volunteers, for any and all related legal expenses and costs incurred by each of them, subject to the limitations in Sections A.1. and A.2. 4. Insurance Proceeds. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials, officers, employees, agents, and/or volunteers. 5. Declarations. Consultant's obligations under Article V shall not be limited by any prior or subsequent declaration by the Consultant. 6. Enforcement Costs. Consultant agrees to pay any and all costs City incurs enforcing the indemnity and defense provisions set forth in Article V. 7. Survival. Consultant's obligations under Article V shall survive the termination of this Agreement. ARTICLE VL TERMINATION OF AGREEMENT A. Termination for Cause. If, through any cause, Consultant shall fail to fulfill in a timely and proper manner Consultant's obligations under this Agreement, or if Consultant shall violate any of the covenants, agreements or stipulations of this Agreement, City shall have the right to terminate this Agreement by giving written notice to Consultant of such termination and specifying the effective date thereof at least five (5) days before the effective date of such termination. In that event, all finished or unfmished documents, data, studies, surveys, drawings, maps, reports and other materials prepared by Consultant shall, at the option of the City, become the property of the City, and Consultant shall be entitled to receive just and equitable compensation, in an amount not to exceed that payable under this Agreement and less any damages caused City by Consultant's breach, for any work satisfactorily completed on such documents and other materials up to the effective date of Notice of Termination. B. Termination of Agreement for Convenience of City. City may terminate this Agreement at any time and for any reason, by giving specific written notice to Consultant of such termination and specifying the effective date thereof, at least thirty (30) days before the effective date of such termination. In that event, all finished and unfinished documents and Page 11 Two Party Agreement Between dee Ciry ajChula ~sfa and Finan~CTel'it Network, Inc to Provide Collecfron Agency Services C \Users\tiffavya~Docwnents\Finance R&R\Consultants\Collection Agency RFP\FCN Agreemevt\FCN Agreement 2012-09-25.doc other materials described hereinabove shall, at the option of the City, become City's sole and exclusive property. If the Agreement is terminated by City as provided in this paragraph, Consultant shall be entitled to receive just and equitable compensation, in an amount not to exceed that payable under this Agreement, for any satisfactory work completed on such docmnents and other materials to the effective date of such termination. Consultant hereby expressly waives any and all claims for damages or compensation arising under this Agreement except as set forth in this section. ARTICLE VII. RECORD RETENTION AND ACCESS A. Record Retention. During the course of the Project and for three (3) years following completion, the Consultant agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the Project as City may require. B. Access to Records of Consultant and Subcontractors. The Consultant agrees to permit, and require its subcontractors to permit City or its authorized representatives, upon request, to inspect all Project work, materials, payrolls, and other data, and to audit the books, records, and accounts of the Contractor and its subcontractors pertaining to the Project. C. Project Closeout. The Consultant agrees that Project closeout does not alter the reporting and record retention requirements of this Agreement. ARTICLE VIII. PROJECT COMPLETION, AUDIT, AND CLOSEOUT A. Project Completion. Within ninety (90) calendar days following Project completion or termination by City, Consultant agrees to submit a final certification of Project expenses and audit reports, as applicable. B. Audit of Consultants. Consultant agrees to perform financial and compliance audits the City may require. The Consultant also agrees to obtain any other audits required by City. Consultant agrees that Project closeout will not alter Consultant's audit responsibilities. Audit costs are allowable Project costs. C. Project Closeout. Project closeout occurs when City notifies the Consultant that City has closed the Project, and either forwards the final payment or acknowledges that the Consultant has remitted the proper refund. The Consultant agrees that Project closeout by City does not invalidate any continuing requirements imposed by the Agreement or any unmet requirements set forth in a written notification from City ARTICLE IX. MISCELLANEOUS PROVISIONS A. Assignability. The services of Consultant are personal to the City, and Consultant shall not assign any interest in this Agreement, and shall not transfer any interest in the same (whether by assignment or notation), without prior written consent of City. Page 12 Two Party Agreement Between t:e City ojChula VU'ia and Finanr~xl Grit Newark, Inc to Provide Co[lecaon Ager:cy Services C:\Users\tiffauya\Dociunents\Finance R&R\Consultmts\Collection Agency RFP\rvCV Ageement`,FCN Agreement 2012-09-25.doc 1. Limited Consent. City hereby consents to the assignment of the portions of the Defined Services identified in Exhibit A, Paragraph 16 to the subconsultants identified as "Permitted Subconsultants." B. Ownership, Publication, Reproduction and Use of Material. All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced under this Agreement shall be the sole and exclusive property of City. No such materials or properties produced in whole or in part under this Agreement shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express written consent of City. City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced under this Agreement. C. Independent Contractor. City is interested only in the results obtained and Consultant shall perform as an independent contractor with sole control of the manner and means of performing the services required under this Agreement. City maintains the right only to reject or accept Consultant's work products. Consultant and any of the Consultant's agents, employees or representatives are, for all purposes under this Agreement, independent contractors and shall not be deemed to be employees of City, and none of them shall be entitled to any benefits to which City employees are entitled including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Therefore, City will not withhold state or federal income tax, social security tax or any other payroll tax, and Consultant shall be solely responsible for the payment of same and shall hold the City harmless with regard to them. 1. Actions on Behalf of City. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever, as an agent or otherwise. Consultant shall have no authority, express or implied, to bind City or its members, agents, or employees, to any obligation whatsoever, unless expressly provided in this Agreement. 2. No Obligations to Third Parties. In connection with the Project, Consultant agrees and shall require that its agents, employees, subcontractors agree that City shall not be responsible for any obligations or liabilities to any third party, including its agents, employees, subcontractors, or other person or entity that is not a party to this Agreement. Notwithstanding that City may have concurred in or approved any solicitation, subagreement, or third parry contract at any tier, City shall have no obligation or liability to any person or entity not a party to this Agreement. D. Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement, against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by this reference as if fully set forth Page 13 Two Party Agreement Between 8:e Ciry ojChu[a Vista and Finaa~~g~it Ne[work, Inc to Provide Cal[ecffon Agency Services C:\Users\Rffanya\Docuntenls\Fivance R&R`\Consultavis\Collection Agency RFP\FCN Agreemevt\FCN Ageemev[ 2012-09-25.doc herein, and such policies and procedures used by City in the implementation of same. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. E. Administration of Contract. Each parry designates the individuals (Contract Administrators) indicated on Exhibit A, Paragraph 12, as that party's contract administrator who is authorized by the party to represent it in the routine administration of this Agreement. F. Term. This Agreement shall terminate when the parties have complied with all executory provisions hereof. G. Attorney's Fees. Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys' fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. H. Statement of Costs. In the event that Consultant prepares a report or document, or participates in the preparation of a report or document in performing the Defined Services, Consultant shall include, or cause the inclusion of, in the report or document, a statement of the numbers and cost in dollar amounts of all contracts and subcontracts relating to the preparation of the report or document. I. Consultant is Real Estate Broker and/or Salesman. If the box on Exhibit A, Paragraph 15 is marked, the Consultant and/or its principals is/are licensed with the State of California or some other state as a real estate broker or salesperson. Otherwise, Consultant represents that neither Consultant, nor its principals are licensed real estate brokers or salespersons. J. Notices. All notices, demands or requests provided for or pennitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement as the places of business for each of the designated parties. K. Integration. This Agreement, together with any other written document referred to or contemplated in it, embody the entire Agreement and understanding between the parties relating to the subject matter hereof. Neither this Agreement nor any provision of it may be amended, modified, waived or discharged except by an instrument in writing executed by the party against which enforcement ofsuch amendment, waiver or discharge is sought. L. Capacity of Parties. Each signatory and party to this Agreement warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all necessary resolutions or other actions have been taken so as to enable it to enter into this Agreement. Page 14 Two Party Agreement Be[ween the Ciry ojChula Vista and Finan~n[ Chafit Network, Lee to Provide Collection.9gency Services C:\Users\tiffanya\Docuenents`,Finance R&R\CoasWtants\Collection Agenry RFP\F~CN~ALgrUeeenent\FCN Agreement 2012-09-25 doc M. Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in the federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as close thereto as possible. Venue for this Agreement, and performance under it, shall be the City ofChula Vista. (End of page. Next page is signature page.) Page I S Two Parry Agreemen! Between [he City ojCkufa Vista and Finm[$al G.~udit Nebvork, L:c. [o Provide Collection Agency Services C \Users\tlffanva~Docmnents\Finance R&A\Consuliants\Collecfion Agency RFP\FCN ALgrleement\FCN Agreement 20]2-09-25.doc Signature Page to Agreement between City of Chula Vista and Financial Credit Network, Inc., To Provide Collection Agency Services IN WITNESS WHEREOF, City and Consultant have executed this Agreement, indicating that they have read and understood same, and indicate their full and complete consent to its terms: City of Chula Vista By: Cheryl Cox, Mayor Attest: Dolma Norris, City Clerk Approved as to form: Glen R. Googins, City Attorney Exhibit List to Agreement: Exhibit A Financial~C~r{edit-~NeytwAO~(rk, Inc.,r By: ~"'~' ~v' "''' Kris Davison Vice President Page 16 Two Parry Agreement Between [he City of Chula Vista and Finanaa[ Cnedii Network, Inc. to Provide Collecr?on Aget:cy Services Ct\Users\tiffavya\Docmnents\rinance R&R\Consuttants\Collection Agency AFP\F'CN Agreement\FCN Agreement 2012-09-25.doc Exhibit A to Agreement between City of Chula Vista And Financial Credit Network, Inc. 1. Effective Date: The Agreement shall take effect upon full execution of the Agreement, as of the effective date stated on page 1 of the Agreement. 2. City-Related Entity: (~ City of Chula Vista, a municipal chartered corporation of the State of California OThe Chula Vista Public Financing Authority, a - - OThe Chula Vista Industrial Development Authority, a OOther: , a [insert business form] (City) 3. Place of Business for City: City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 4. Consultant: Financial Credit Network, Inc. 5. Business Form of Consultant: OSole Proprietorship ( )Partnership (X) Corporation 6. Place of Business, Telephone and Fax Number of Consultant: 1300 West Main Street Visalia, CA 93291 Voice Phone: (800) 540-9011 Fax Phone: (888) 326-4329 Page 17 Two Pnrty Agreement Between flee City of Chula Vista and Financgl Ca+9dit Nework, Lec. to Provide Collection Agency Services C.\Users\tiffanya\Docmvevts\rinance R&R\ConsultantslCollecnon Ageucy RFP\FCN Agceement\FCN Agreement 2012-09-25.doo 7. General Duties: Services shall include provision of collection services for delinquent accounts receivables including, but not limited to, the following billing accounts: utilities, false alarm, jail booking, business license, property damage, and miscellaneous accounts. 8. Scope of Work and Schedule: A. Detailed Scope of Work: 1. Collection Action a. Consultant shall make a minimtttn of two (2) written or telephone contacts for each account within sixty (60) days of receipt of account, unless the account cleazs sooner. b. Consultant shall conduct skip tracing on delinquent accounts. c. Consultant shall report all uncollected accounts to the major credit bureaus unless a type is excluded from reporting by the Finance Director/Treasurer. Such reporting must be in accordance with all applicable Federal and California laws. Consultant shall not report accounts to the credit bureaus until the Consultant has worked the account for 60 days. At the request of the Finance Director/Treasurer, the Consultant shall remove an account notification from all affected bureaus and provide a copy of that notification to the Finance Director/Treasurer. In accordance with the Fair Credit Reporting Act, the City requires that accounts be cancelled from each credit bureau upon request of the Finance Director/Treasurer. d. Consultant shall accept automated or manual transfer of account information from the City or other consultant's database. It is expected that the consultant will work (at no additional cost) with the City and its software to ensure accurate and timely transmission of data. e. Consultant shall have authority to assess interest on declining delinquent balances at a rate of 10 percent per annum after assignment from the City to Consultant, as authorized by Section 3289 of the California Civil Code. £ Consultant shall not have full rights to the accounts and shall only be able to pursue collections on behalf of the City. Consultant shall make contact with delinquent accounts under the name of the collection agency. g. Consultant shall not have authority to accept a compromise settlement on any account without written consent of the Finance Director/Treasurer or designee for all accounts. This consent may be accomplished by setting parameters under which the Consultant may accept a settlement without written permission. h. The City reserves the right to withdraw a delinquent account from the Consultant at any time. In such cases, the Consultant shall cease all collection and/or legal activities related to the account. If account is withdrawn prior to collection activity on the part of the Consultant then no fees shall be due. Page 18 Two Parry Agreement Befween the City of Cleu[a 1/ufa arsd Pinan~~Chedif Network, Inc. to Provide Collection Agency Services Ci\Users\tiffanya\Documents\Finance R&R\Consultants\Collection Agenty RFP\FCN ALLgre44emen[\FCN Agreement 2012-09-25.doc i. The City is customer oriented and firmly believes in a positive approach in dealing with debtors. The Consultant shall not use tactics that may be interpreted as harassment or as demeaning or that may reflect poorly on the City's efforts. The City prohibits any collection enforcement procedures not consistent with the City's requirements. The City requires the Consultant to exercise high ethical standards in their collection philosophy and techniques. The Consultant shall conduct its business in a professional manner, which will preserve the dignity of the City and its relationship with its citizens. j. Consultant shall perform all work in accordance with all applicable State and Federal laws, including, but not limited to, the provisions of the Federal Fair Debt Collection Practices Act. 2. Reporting and Documentation a. Contractor shall submit monthly status reports on all accounts detailing its collection activities for the previous month.- The monthly status report shall reference the City's fund and revenue account number, as well as type of receivable. The monthly report shall include data for each account, detailing information such as: original placed value of debt, the value of the current debt, money received, charges waived, interest charged, balance due, and date of last payment. A financial summary will also be required showing period to date and fiscal year to date totals for pertinent information such as: receipts, net accounts receivable, total accounts receivable, and collection percentage. b. Detailed and summary aging reports shall be provided upon City request. c. A fiscal year-end report, as of June 30, shall be provided annually, to include: a detailed listing of all accounts by type; a detailed listing of all accounts closed in past year by type; a detailed listing of all activity by account in past year by type; a summazy of all the preceding reports. d. Consultant team shall meet at least twice annually with the Finance Director/Treasurer and other City staff to discuss all services and collection results. Consultant shall provide recommendations on how the City can reduce further bad debt: Consultant shall provide updates to the City on changes in state and federal laws related to credit and collections. e. Consultant shall maintain records supporting each assigned account. All such records (correspondence, documents, accounting records, banking records and other relative evidence) shall be made available to the City for review upon request. These records shall be maintained for a period of seven (7) years after termination of the collection action on each account. The City reserves the right to perform period audits to ensure that all amounts collected are accurately reported and remitted. f. The Finance Director/Treasurer, or designee, shall be allowed access to debtor accounting information through an online terminal or the internet, providing the ability to generate recovery analysis reports or view debtor files at any time. Page 19 Two Party Agreen:etu Between tke City ojCl:u[a Vista and Finan~Ci~~it Nebvork, Inc to Provide Collection Agency Services C:\Users\flffanya\Documems\Finance R&R\Covsulrants\Collecfiov Agenoy RFP\FCN Ageement\FCN A~eement 2012-09-25.doc B. Date for Commencement of Consultant Services: (X) Same as Effective Date of Agreement OOther: C. Dates or Time Limits for Delivery of Deliverables: Deliverable No. 1: Monthly status report on all accounts detailing collection activities for the previous month, as discussed in 8.A.2.a above. Deliverable No. 2: Detailed and summazized aging report to be provided upon request, as discussed in 8.A.2:b above. Deliverable No. 3: Fiscal year-end report on all accounts detailing collection activities for the prior fiscal year, as discussed in 8.A.2.c above. Deliverable No. 4: Two (2) annual meetings with the Finance Director/Treasurer and other City staff to discuss all services and collection results as discussed in 8.A.2.d above. Deliverable No. 5: Access to debtor accounting information through an online terminal or the Internet as discussed in 8.A.2.f above. D. Date for completion of all Consultant services: This agreement shall be effective upon execution for a period of three years with two one-year options. The City may exercise each one-year option at its sole discretion, upon written notification by the City Manager, or designee, to Consultant. 9. Materials Required to be Supplied by City to Consultant: City will be responsible for identifying collection accounts, assigning them to Consultant via mutually agreed upon method and communicating subsequent changes to those accounts such as direct payments or adjustments, cancellations, bankruptcy or updated demographic information. City will also be responsible for responding to requests for itemization of charges and assisting with resolution of disputes in a timely manner. 10. Compensation: A. (X) Single Fixed Fee Arrangement. For performance of all of the Defined Services by Consultant as herein required, City shall pay a single fixed fee in the amounts and at the times or milestones or for the Deliverables set forth below: Single Fixed Fee Amount: Page 20 Two Parry Agreement Betweeia the Ciry of Clnul¢ (<sta and Financ~LL~t Network, Inc to Provide Collection Agency Services C:\Uses\fiKanya\Documevfs\Fu~annce R&R\Consultav[s\Callecbov Agancy RFP\FCN Ageemev[\FCN Ageement 2012-09 25.doc a. Primary Placement, Excluding Legal Action: 20% of funds collected and remitted to Ci ,payable monthly; b. Legal Action or Forwarding on Primazy Placements: 30% of funds collected and remitted to City, payable monthly. Milestone or Event or Deliverable Amount or Percent of Fixed Fee O 1. Interim Monthly Advances. The City shall make interim monthly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest free loans that must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 19 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Consultant shall have represented in writing that said percentage of completion of the phase has been performed by the Consultant. The practice of making interim monthly advances shall not convert this agreement to a time and materials basis of payment. 1. Compensation Adjustment by Mutual Agreement After the first year of the contract, each subsequent year of the contract may be subject to a compensation adjustment determined by mutual agreement. B. OPhased Fixed Fee Arrangement. For the performance of each phase or portion of the Defined Services by Consultant as are separately identified below, City shall pay the fixed fee associated with each phase of Services, in the amounts and at the times or milestones or Deliverables set forth. Consultant shall not commence Services under any Phase, and shall not be entitled to the compensation for a Phase, unless City shall have issued a notice to proceed to Consultant as to said Phase. Phase 1. Fee for Said Phase 2. 3. Page 21 Tivo Party Agreement Between tke City ojCkula Vista arsd Finan~7j f~e~k Network, Inc. to Provide Collection Agency Services C:\Users\tiffanya\Docmnents\Finavice R&R\ConsWtmts\Colleceon Agency RFP\r'CN A6Teement\rCN Agreement?01?-09-25.doc O 1. Interim Monthly Advances. The City shall make interim monthly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest free loans that must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 18 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Consultant shall have represented in writing that said percentage of completion of the phase has been performed by the Consultant. The practice of making interim monthly advances shall not convert this agreement to a time and materials basis of payment. C. OHourly Rate Arrangement For performance of the Defined Services by Consultant as herein required, City shall pay Consultant for the productive hours of time spent by Consultant in the performance of said Services, at the rates or amounts set forth in the Rate Schedule herein below according to the following terms and conditions: (1) ONot-to-Exceed Limitation on Time and Materials Arrangement Notwithstanding the expenditure by Consultant of time and materials in excess of said Maximum Compensation amount, Consultant agrees that Consultant will perform all of the Defined Services herein required of Consultant for $ including all Materials, and other "reimbursables" (Maximum Compensation). (2) OLimitation without Further Authorization on Time and Materials Arrangement At such time as Consultant shall have incurred time and materials equal to $ (Authorization Limit), Consultant shall not be entitled to any additional compensation without further authorization issued in writing and approved by the City. Nothing herein shall preclude Consultant from providing additional Services at Consultant's own cost and expense. See Exhibit B for wage rates. OHourly rates may increase by 6% for services rendered after [month], 20_, if delay in providing services is caused by City. 1 L Materials Reimbursement Arrangement Page 22 Twa Party Agreement Between flee Ciry ajChula Vista and Finan~C~~'it Network, Eac. to Provide Cullecrion Agenc~~ Services C:\Users4iffavya\Docwnevts\Fu~avice R&A\Covsultmtts\Co]lection Agevcy RFP¢CN Ag<eement\FCN Ageement 2012-09-25.doo For the cost of out of pocket expenses incurred by Consultant in the performance of services herein required, City shall pay Consultant at the rates or amounts set forth below: ()None, the compensation includes all costs. O Reports, not to exceed $ () Copies, not to exceed $ O Travel, not to exceed $ O Printing, not to exceed $ O Postage, not to exceed $ O Delivery, not to exceed $ O Outside Services: O Other Actual Identifiable Direct Costs: not to exceed $ not to exceed $ 12. Contract Administrators: City: Tiffany Allen Treasury Manager City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910-2631 (619) 691-5250 ext. 3116 Consultant: Kris Davison Vice President Financial Credit Network, Inc. 1300 West Main Street Visalia, CA 93291 (800)540-9011 13. Liquidated Damages Rate: O $ per day. OOther: Cost or Rate $ 14. Statement of Econo[nic Interests, Consultant Reporting Categories, per Conflict of Interest Code (Chula Vista Municipal Code chapter 2.02): (X)Not Applicable. Not an FPPC Filer. O FPPC Filer Page 23 Two Party Agreement Be6veen tke City ojC/eula Ircrta attd Finanpyal Gretlif Network, Inc to Provide Ca[[ectian Agency Services C:\Oses\tiffanya\Docwvevts\Futance R&R1Covaulfarrts~Colleclion A6ency RFP\SCN AL~r`Jeement~F(-N Ageemev[2072-09-25.doc OCategory No. 1. Investments, sources of income and business interests. OCategory No. 2. Interests in real property. OCategory No. 3. Investments, business positions, interests in real property, and sources of income subject to the regulatory, permit or licensing authority of the department administering this Agreement. OCategory No. 4. Investments and business positions in business entities and sources of income that engage in land development, construction or the acquisition or sale of real property. OCategory No. 5. Investments and business positions in business entities and sources of income that, within the past two years, have contracted- with the City of Chula Vista or the City's Redevelopment Agency to provide services, supplies, materials, machinery or equipment. O Category No. 6. Investments and business positions in business entities and sources of income that, within the past two years, have contracted with the department administering this Agreement to provide services, supplies, materials, machinery or equipment. OList Consultant Associates interests in real property within 2 radial miles of Project Property, if any: 15. O Consultant is Real Estate Broker and/or Salesman 16. Permitted Subconsultants: None currently anticipated. Subconsultants maybe authorized upon written City approval. 17. Bill Processing: A. Consultant's Billing to be submitted for the following period of time: (X) Monthly Page 24 Two Party Agreement Between the City oJChula Vista and Finanaea/ lelredit NeOVOrk, Inc to Provide Colfecfioa Agency Services C \Users\tiffznya~Documents\Finance R&R\Consultavts\Collectian Agency RFP\fCN A~eement\FCN Ageement 2012-09-25.doc Quarterly Other: B. Day of the Period for submission of Consultant's Billing: O First of the Month O 15th Day of each Month (X) End of the Month OOther: C. City's Account Number: multiple, varies by delinquent account type 18. Security for Performance OPerformance Bond, $ _ OLetter of Credit, $ OOther Security: Type: Amount: $ ORetention. If this space is checked, then notwithstanding other provisions to the contrary requiring the payment of compensation to the Consultant sooner, the City shall be entitled to retain, at their option, either the following "Retention Percentage" or "Retention Amount" until the City determines that the Retention Release Event, listed below, has occurred: Retention Percentage: Retention Amount: $_ Retention Release Event: Completion of All Consultant Services Other: Other: The Retention Amount may be released on a monthly basis provided that Consultant has performed said montlily services to the sole satisfaction of the Assistant City Manager/Director of Development Services or his designee. Page 25 Twa Parry Agreement Between tlee City of Chula I~[sta and Financ$L,C~git Network, Inc. to Provide Caf[ecHon Agency Services C:\Use~s\tiffanya\Docwneva\Finavoe R&R\Consulfeots\Collectiov Agency RFP\FCN Agreemevt\FCN Agreemev[ 2012-09-2Adoc COUNCIL RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND APPROVING AN AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND FINANCIAL CREDIT NETWORK, INC., TO PROVIDE COLLECTION AGENCY SERVICES WHEREAS, on June 8, 2012, the City of Chula Vista issued a Request for Proposal (RFP) for a full service collection agency to provide collection services for delinquent accounts receivable; and WHEREAS, delinquent accounts to be pursued by the collection agency include, but are not limited to, the following billing accounts: utilities, false alarm. fees, jail booking fees, business licenses, property damage, and miscellaneous accounts; and WHEREAS, the RFP was advertised in the Star News, posted on the City's Planet Bids website and distributed directly to five firms previously identified as potential bidders for collection agency services; and WHEREAS, the City received five responsive bids; and WHEREAS, City staff conducted a comprehensive review to determine the best qualified firm to provide collection agency services; and WHEREAS, Financial Credit Network (FCN) has demonstrated the ability and the expertise to provide collection agency services in accordance with the scope of work requirements of the RFP; and WHEREAS, FCN has submitted a proposal to provide collection agency services in exchange for a base fee oftwenty-percent of the delinquent funds collected, increasing to a fee of thirty-percent if legal services are required; and WHEREAS, in consideration of their extensive knowledge and experience in municipal collections in the state of California, their high collection success rate, and the provision of services not offered by other bidders, contract award to FCN is recommended. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it hereby accepts bids and approves the agreement between the City of Chula Vista and Financial Credit Network Inc., to provide collection agency services, and with such minor modifications as may be required or approved by the City Attorney, in the form presented to the City Council, as may have been modified by the Council prior to its approval, a copy of which is on file in the Office of the City Clerk. 8-32 Resolution No. Page 2 Presented by Maria Kachadoorian Finance Director/ Treasurer Approved as to form by ' ~~~ ~/Q Glen R. Googins :U-t ~ ~'lV,~-ti.V-ltit~~ City Attorney v 8-33