Agenda Report
Fullerton City Council
MEETING DATE: JUNE 18, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: Ellis chang, director of administrative services PREPARED BY: TONETTE SMART, DEPUTY director of administrative services
JOSE GONZALEZ, PURCHASING SUPERVISOR
SUBJECT: PROFESSIONAL SERVICES AGREEMENTS WITH ONLINE INFORMATION SERVICES, INC. AND RSI ENTERPRISES, INC. FOR ON-CALL DEBT COLLECTION SERVICES
SUMMARY
Staff solicited a Request for Qualifications (RFQ) for professional On-Call Debt Collection Services to collect outstanding debts for the City. Staff requests approval to award professional services agreements to Online Information Services Inc. and RSI Enterprises Inc.
PROPOSED MOTION
Approve and authorize City Manager, or designee, to execute and administer Professional Services Agreements with the following firms to perform On-Call Debt Collection Services, in a form approved by the City Attorney:
Online Information Services, Inc.
RSI Enterprises, Inc.
Authorize City Manager, or designee, to execute and administer related documents and change orders, including renewal term options, in a form approved by the City Attorney.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
The City Manager recommends approval.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organization Stability.
FISCAL IMPACT
The City pays debt collection fees as a percentage ranging from 16% to 30% of the amount collected by the debt collection agency that the City would otherwise write off. Fiscal impact would vary depending on the amount collected. The City wrote-off $217,871 in outstanding non-utility receivables from 2017 through 2020 in March 2023. Utility write-offs over the previous three years averaged $87,000. The City would engage third-party debt collection services to support City collection efforts. Engaging professional debt collection services provides City departments an additional tool for collection efforts.
BACKGROUND AND DISCUSSION
City has had limited collection efforts since 2020 due to COVID pandemic restraints and staff turnover. The Administrative Services Department prepared an administrative policy for delinquent non-utility accounts in 2023 providing direction for City department collection efforts. Collection activities include sending delinquent customers a first past due account notice and a final notice for amounts that remain unpaid to inform the customer that the City may refer the account to a collection agency.
Utility Billing customers have 25 days to pay their final bills. The City writes off unpaid final bills two years after account closure. Utility billing staff attempt to find customers by searching the utility billing system and collecting payment prior to write off.
Utilizing professional on-call debt collection services provides regular telephone contact, skip tracing, mailed notices to debtors, negotiated payment arrangements, payment reminders and follow-up. The City would receive real-time and ad-hoc reports on account status and individual account progress. Collection services may include reporting to the three national credit bureaus Trans Union, Equifax and Experian at City discretion. The collection services would return unpaid accounts to the City at an agreed upon age.
Staff issued a Request for Qualifications, RFQ #2324-04, on November 30, 2023, soliciting qualified firms for professional On-Call Debt Collection Services to collect all outstanding debts for the City. An Administrative Services Department internal rating team evaluated proposals and scored using the following categories: RFP completeness, experience, service plan, work performance and reference check.
Staff received and evaluated five proposals for debt collection services and selected the following firms to provide On-Call Debt Collection Services:
Online Information Services, Inc.
RSI Enterprises, Inc.
Both Online Information Services and RSI Enterprises have strong reputations and proven success records in debt collection services nationwide, providing services for California and local municipal and utility agencies. Staff requests City Council award three-year agreements, with two optional renewal terms with the selected firms. The City would utilize firms on an “as-needed” basis depending on the type of debt collections sought and availability of each firm. Staff may initiate debt collection efforts with any of the firms once the City has awarded agreements.
Attachments:
Attachment 1 – Professional Services Agreement with Online Information Services Attachment 2 – Professional Services Agreement with RSI Enterprise cc: City Manager Eric J. Levitt
On-Call Professional Services Agreements for Debt Collection Services June 18, 2024