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November 18, 2025
ITEM TITLE
Professional Services Agreement: Approve an Agreement with Cedars Business Services, LLC to provide Professional Debt Collection Services.
Report Number: 25-0222
Location: No specific geographic location
Department: Finance
G.C. § 84308 Regulations Apply: No
Environmental Notice: This activity is not a “ Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines . Therefore, pursuant to State Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Action
Adopt a resolution approving an agreement with Cedars Business Services, LLC to provide professional debt collection services.
SUMMARY
The Finance Department seeks City Council approval for an agreement with a consultant to perform professional debt collection services to assist in the recovery of delinquent account s receivables. This collaboration is expected to improve collection efficiency, reduce delinquent account balances, and increase revenue recovery at no upfront cost to the City.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a project as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a government fiscal/ administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(C)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
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BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The City manages a range of accounts receivable across various departments, including those related to civil penalties, permits, utility fees, municipal code violations, and damages to City property. To enhance the recovery of delinquent accounts, the City requires the services of a qualified professional debt collection firm.
The City’s current professional debt collection services firm, Financial Credit Network, Inc., has provided these services to the City since March of 2020 . The agreement for these services ended on June 30, 2025, requiring the release of a competitive solicitation in accordance with Chula Vista Municipal Code Section
2.56.110.
In July 2025, the City released a competitive solicitation through the Request for Proposals (RFP) process to provide debt collection services to the City. As result of the solicitation, t he City received six (6) proposals, which were evaluated and scored by a panel based on experience, personnel, qualifications, fee proposal, interview, and adherence of firm’s proposal to RFP guidelines. Following a comprehensive assessment, staff recommends approving an agreement with Cedars Business Services, LLC for these services.
The agreement establishes key terms for professional debt collection services. The initial term is three years and eight months, with the option for two additional one -year extensions. Compensation to the consultant will be based on a percentage of funds successfully recovered, ranging from 11 percent to 33 percent depending on the age of t he debt. No fees will be paid for accounts that remain uncollected. The total compensation for services provided through June 30, 2031, shall not exceed $1,000,000. Under the agreement, the consultant will provide comprehensive delinquent debt collection s ervices on behalf of the City.
Staff recommends that City Council approve the agreement with Cedars Business Services, LLC to perform debt collection services on behalf of the City. Working with an independent firm provides the following key benefits:
Access to professionals trained in debt recovery best practices Improve recovery rates for delinquent debt
Ensure compliance with all applicable debt collection regulations Cost effectiveness with a fixed rate ensuring payment only for successful collections Cedars Business Services, LLC , established in 1997, brings over 34 years of specialized experience in debt recovery for public entities. The firm serves 63 government clients nationwide, including several municipalities in California such as the City of Riverside, Contra Costa County, and San Benito County. The firm’s success in government collections stems from its data-driven strategies, advanced technology, strict adherence to compliance regulations, and a dedicated team with government collections expertise.
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DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Approval of this resolution supports the collection of delinquent debt through the services of a collection vendor, compensated on a contingency fee basis of a percentage of successful debt collected. There is no net fiscal impact as a result of this resolution, all costs associated with this contract will be paid from the recovered revenues.
ONGOING FISCAL IMPACT
All ongoing costs for these services will be incorporated as part of the annual budget development process in future years based on trends from recovered funds.
ATTACHMENTS
1. Cedars Business Services, LLC Consultant Services Agreement Staff Contact: Jimmy Vasquez, Revenue Manager
Sarah Schoen, Director of Finance/ Treasurer