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R-2013-013-2013-01-28RESOLUTION NO. R2013-13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AWARDING A BID FOR DELINQUENT REVENUE COLLECTION SERVICES. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That the City received proposals for delinquent revenue collection services, and such proposals have been reviewed and tabulated. Section 2. That the City Council hereby awards the bid to NRA Group LLC, dba National Recovery Agency, in the rate amount reflected in Exhibit "A", attached hereto in. Section 3. The City Manager or his designee is hereby authorized to execute a contract for delinquent revenue collection services. PASSED, APPROVED and ADOPTED this the 28th day of January, A.D., 2013. ATTEST: �'1 / ! , Y• NG •RFIN ,/RM YS' - ETAR APPROVED AS TO FORM: (&- DARRIN M. COKER CITY ATTORNEY TOM REID MAYOR Resolution No. R2013-13 Exhibit "A" ATTACHMENT A COMPENSATION FOR COLLECTION SERVICES As . stated under Tab 1, Compensation should be based on hxed percentage of collections, not a fixed fee per item. Fee should be all inclusive of costs. Contractor shall indicate in detail in the space provided on this form their compensation for the various types of accounts: Type Of Account Active Garbage/Sewer Accounts \ Terminated Utility Billing Accounts EMS/Ambulance Billing Alarm Fees HighWeeds/Grass Accounts City Property Damage Parks & Recreation % Fee 18% 18% 18% 18% 18% 18% 18% Additional Fees for Services Described Under Tab F: (please identify below any additional compensation requirements, if required). None If the City should retain the right to recall any accounts assigned to the Contractor without penalty or charge, what would the fees be for each account type. Type Of Account Active Garbage/Sewer Accounts Terminated Utility Billing Accounts EMS/Ambulance Billing Alarm Fees HighWeeds/Grass Accounts City Property Damage • Parks & Recreation % Fee \ 18% 18% 18% 18% 1 O 18% 18% The City shall have the right lo recall end account at any lima for whatever reason — at no charge. Fees proposed are el Inclusive of Ni. services In which NRA Group provides. 22 I I 1 1 List any other type of fees, if applicable. If not listed and included as part of the Contractor proposal, fee would not apply to Contract. NRA Group proposes a 33% fee for litigation. Fees should include any distinction regarding those accounts hat may lend Itself to legal action, versus those not requiring legal action. Signature President/CEO Name and Title NRA Group, LLC Company 11120/2012 Date 23 `\ Resolution No. R2013-13 Exhibit "B" Exhibit "A" APPENDIX TYPES OF CITY BILLINGS FOR COLLECTIONS Active Garbage and Sewer Only Accounts The City bills approximately 30,000 accounts monthly for water, sewer and garbage services. Most accounts receive water from the City and upon delinquency the City does cut-off water for non-payment, then being able to collect delinquent amounts for not only water, but for sewer and garbage as well. However, there are a few accounts where water service is not provided by the City and the collection of garbage and/or sewer service is more difficult. Garbage Only Accounts At this time there are 252 active or current accounts owing $32,562.29. Sewer Only Accounts At this time there are 30active or current accounts owing $14,119.89. The City would like to submit accounts for collection after 120 days past due. There may be several accounts with balances that have accumulated over many years since the City cannot perform cut-off procedures. Contractor and City would mutually decide on a minimum balance owed that would be forwarded for collections. Collection account information would be sent monthly to Contractor by City. Terminated Utility Accounts The City bills for water, sewer and garbage services for approximately 30,000 accounts monthly. In addition to penalty and interest, the City's collection efforts include payment plans, notice of and service shut-off, recording liens on non -homesteaded property and notice to credit bureau on those accounts approved annually by City Council. For residential rental property, the property owner is held liable for any unpaid bills. The City also collects a security deposit upon opening of a new account. When an account terminates service, the security deposit is used against any balance owed and any additional amounts due are billed to the account. The City does use its own collection efforts to collect these amounts however there are accounts each year that are left owing monies. Below is a summary of terminated accounts: Year Number of Accounts Total Amount Owed 2000 — 2006 2,368 $554,845.27 2007 334 $ 47,185.17 2008 276 $ 38,702.00 2009 288 $ 37,658.93 2010 154 $ 16,802.05 2011 39 $ 8,144.68 2012 75 $ 7,797.80 Resolution No. R2013-13 Exhibit "B" The City would like to submit terminated accounts to the Contractor that are 120 past due. Contractor and City would mutually decide on a minimum balance owed that would be forwarded for collections as well as ages of accounts that would be sent for collections. Collection account information would be sent to the Contractor monthly by the City. EMS/Ambulance Billing The City currently contracts the billing and collection of EMS/Ambulance billings to a third party, Digitech. Digitech will write-off claims and submit to collections, if applicable, based on the earliest of Digtech's determination that the amount is uncollectible or 120 days from first invoice, if the billing company is not able to collect from submission to insurance companies, federal programs, or patients. Non-resident billings are forwarded for collection. The City does not pursue or make additional collection efforts for resident amounts owed and these amounts are written -off. This contract contemplates that the successful Contractor would receive non-resident accounts for amounts owed after 120 days. Collection account information would be sent to the Contractor via the City's EMS billing firm. The current EMS sub -contracted delinquent collection company will have until April 24, 2013 to pursue collections on billings prior to December 16, 2012. At that point in time, all open accounts will be returned to City and subject to new Contract collections. Below is a summary of accounts that were sent to collections for EMS/Ambulance Billing in the past: Year of Service Number of Accounts Amount Sent to Collections 2006 96 $138,836.16 2007 447 $800,358.35 2008 325 $526,241.70 2009 188 $265,013.69 2010 125 $212,059.47 2011 25 $ 42,625.33 ALL LAWS REGARDING HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPPAA) MUST BE FOLLOWED REGARDING AMBULANCE BILL COLLECTIONS Alarm Permits and False Alarm Fines The City requires that every monitored alarm system (residential or commercial) be permitted. Residential permit fee is $15.00 and commercial permit fees are typically $30.00 and the amount of permit fee is based on type of system, ie: burglary, hold-up/panic, etc. Per City Ordinance, the City grants 3 false alarms per year, then charges for each false alarm thereafter as follows: Residential Burglar Commercial Burglar 1 — 3 Free Free 4th -5th $50.00 each $50.00 each 6th & 7th $75.00 each $75.00 each 8th or more $100.00 each 1-2 3rd 4th 5th or more Residential Hold -Up Free $50.00 each $75.00 each $100.00 each There are also fees for fire false alarms. Resolution No. R2013-13 Exhibit "B" $100.00 each Commercial HoId-Up Free $100.00 each $200.00 each $300.00 each The anniversary date of the alarm permit resets the annual billing for the false alarm fines. This Ordinance was adopted with an effective date of May 2009. The City can and will follow through on collections via municipal court, however for accounts who are no longer in business, no longer reside at that address or who no longer have an active alarm system, other collection means are necessary. These types of accounts would be sent to the Contractor to collect. At this time, number of accounts and dollar magnitude of what is owed is not available. High Weeds/Grass and Demolition Billing City Ordinances requires the City to abate nuisances, such as high weeds/grass, junk vehicles and buildings. Property owners are notified and if the owner does not abate the nuisance, the City does. These types of costs to the City can be filed as a lien against the property and the City has done that in the past. When the property is sold, the debt may be collected at the time of sale. The City will begin billing directly to the property owner these costs and would like to submit to the Contractor invoices that are over 90 days past due. For the City's fiscal year 2012, the City abated thirteen (13) properties totaling $4,075.00 in costs. City Property Damage Billings City Property can be damaged by others through a variety of ways, but mainly due to accidents. The City does bill and recoup costs through insurance carriers, however there are instances where there is no insurance information provided or the insurance does not provide coverage. In those instances, the City bills directly to recoup costs. The City would like to submit those billings that are 120 days past due for collections. These types of billings will be few and are summarized over the last three years. Year 2010 2011 2012 Number of Accounts 2 1 5 Amount $2,074.00 $ 800.00 $3,373.04 Park Billings The City Park's Departments bills for memberships to the programs/classes. From 2000 — June 2012, there are longer active accounts owing a balance of $32,033. City would submit these accounts for collection, with determined between City and Contractor. Resolution No. R2013-13 Exhibit "B" Recreation Center/Natatorium and for approximately 438 delinquent or no - age and dollar amount due to be Exhibit "B" SECTION III - SCOPE OF WORK Resolution No. R2013-13 Exhibit "C" The scope of Work is to be used as a general guideline and is not intended to be a complete list of all work necessary to complete the project. The City reserves the right to make changes to the scope of services as referenced herein. No assignment, alteration, change or modification of the terms of the contract shall be valid unless made in writing and agreed to by both parties. The Contractor shall commence no additional work or change the scope of the services unless authorized in writing by the City. The Contractor shall make no claim for additional compensation in the absence of an amendment of the contract executed by both parties. Collection Specifications 1. The City will place accounts for collections. The description of these billings and outstanding amounts is outlined in the Appendix. 2. The Contractor shall accept accounts placed by the City under terms of this agreement and will use its best efforts to collect said accounts utilizing means that are legal, ethical, necessary, and proper with the highest level of customer service. 3. The City shall review and have final editorial approval of all printed formats of collection notices and telephone scripts used by the Contractor for collection of past due accounts. 4. The City plans to place delinquent accounts immediately. Other accounts may be placed through -out the calendar year as they become delinquent. The number and type of accounts referred to Contractor shall be solely within the discretion of the City. Further, the City shall make its own effort at collection and written demands prior to turnover. 5. Accounts will be assigned by means of electronic transmission, electronic file, hard copy or in writing. The assignment will include the following information, if available: a. Name (s) b. Last known address c. Last know phone number d. Type of Account e. Unpaid balance outstanding f. Social Security number, if available, only on Utility Accounts g. Driver's License number, if available, only on Utility Account h. Customer Account Identifiers — City account identifiers 6. The Contractor shall service accounts in languages other than English. 7. The Contractor shall attempt, through collection procedures, to achieve the highest rate of recovery possible. Contact attempts shall include mailings, utilizing skip tracing, and/or other responsible and legal steps to contact the debtor. Methods used shall be noted by the contractor. 8. The Contractor agrees to return to the City, at no charge, accounts referred by mistake. The City will not knowingly refer any accounts where the account is under bankruptcy. Contractor should have the capabilities to research for bankruptcies. 9. The City shall pay no fee to the Contractor when the balance due has been reduced resulting from City action, such as application of a refund, security deposit, or account adjustment. Also, no fee will be paid based upon a collection resulting from the City receiving payment due to a customer refinancing or selling their home when a lien of any amount was in place. Resolution No. R2013-13 Exhibit "C" 10. The Contractor shall provide routine, detailed account information to the City each month and shall provide summary information to the City as required in a format mutually agreed upon. 11. The City shall provide the contractor with information on payments made directly to the City on accounts assigned to the contractor and will pay the collection fee on these amounts. 12. Accounts may not be compromised by the Contractor; reductions must be pursuant to written approval from the City on a case by case basis. 13. Contractor shall submit any disputed amounts with information or notes made during collections to the City for further review and research before continuing with the collection process. 14. All data made available to the Contractor by the City are and remain the property of the City and must be treated as confidential information. Health Insurance Protection and Accountability Act laws (HIPAA) apply to EMS accounts. All listings, which may reveal names or identification number of individuals, if not returned to the City, must be properly destroyed so as to keep such information confidential. 15. The Contractor shall ensure that no employee of the Contractor shall represent themselves as an employee of the City, representative of the Court, or any law enforcement agency. All representation shall be as an employee of the Contractor. 16. The Contractor shall not initiate legal proceedings on any account without prior written authorization by the City. 17. The Contractor shall not engage the services of any person employed by the City without written consent of the City. 18. The contractor shall be responsible for obtaining all required permits, licenses, and bonding to comply with pertinent regulations, municipal, county, state, and federal laws. 19. Records developed as part of this agreement are City records and subject to access, scheduling and disposition approved by the City. 20. The Contractor shall not, under any circumstances, use any threats, intimidation, or harassment of the debtor in the collection of said accounts; nor shall the Contractor violate any guidelines as may be established by Federal and State law. 21. Any billing or follow-up interventions performed by the City on behalf of the Contractor will result in a reduced commission fee. Accounting, Remittances and Payments 22. The Contractor shall maintain complete and accurate records of collection service transactions in accordance with accepted industry accounting practices, and shall keep in a safe place all financial records and statements pertaining to the collection agency service operations for the City for a period of five (5) years from the close of each year's operations. 23. Contractor is to maintain separate files for each account for inspection purposes. All records pertaining to the operation of this collection service shall, upon reasonable notice, be open for inspection and/or audit by the City at any or all reasonable times. 24. All payments shall be made directly to the Contractor. The Contractor shall be responsible for any insufficient fund checks accepted by the Contractor. 25. Accepting and processing credit card payments via telephone for Visa and Mastercard is a minimum requirement. The contractor is responsible for all costs associated with credit card payments, including but not limited to the merchants discount fees. 26. Contractor must be able to accept electronic payments from debtors. The cost for this service is the responsibility of the contractor. Resolution No. R2013-13 Exhibit "C" 27. The selected Contractor must provide proof of PCI (Payment Card Industry) compliance and maintain compliance through term of contract. 28. Contractor shall pay for all costs involved in the collection of the assigned accounts. 29. The Contractor's accounting control and records of reported collections shall be used as the basis to verify charges payable to the contractor. 30. The Contractor shall properly process all payments before the end of the same business day. 31. The Contractor shall put in place safeguards to ensure against employee embezzlement/fraud and regularly monitor employees to avoid the potential problem of an account owner's credit card or identity being stolen or misused. 32. The Contractor shall remit to the City all gross collections based on a monthly reporting period beginning on the 1st day of the month and ending on the last day of each month. The Contractor shall remit gross collections to the City no later than the 7th day of each month for the previous month collections. 33. Contractor shall submit invoice on a monthly basis along with a monthly statement listing the account numbers, names, dollar amount collected and collection fee of all payments received by the City. Invoice should be sectioned according to account type with sub- totals and total dollar amounts. The dollar amount collected should tie to collections received by the City. City shall have 30 days to remit payment. 34. The City may withhold payment for reasons including but not limited to: disputed work, third party claims filed or evidence that a claim will be filed; job performance; defective work or other reasonable cause. 35. Contractor shall maintain a disaster recovery plan to protect the City receivables and confidentiality of the information contained therein. 36. On request of the City, the Contractor shall meet with the City to review each invoice, explain charges, discuss problems and mutually agree on course of action which may be required to provide improved control and/or service. Reporting 37. Contractor shall provide monthly reports, or provide the City the ability to download, detailing the status of each account, including the customer name and number, the beginning balance, collections received during the month, beginning balance, collections received during the month, current balance, and collection status by the 10th of each month. 38. The Contractor shall provide monthly reports call center activity, including number of complaints, summary of the dispute/complaint and outcome 39. See Number 11 and 34 above. 40. Contractor shall provide the City with the ability to upload accounts electronically, if City can extract data accordingly. 41. Other reports that may be available can be reviewed and agreed upon.