City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01885 12/3/2024 Consent Item 12.
Professional Services Agreement: Collection Agency Services File ID: 2024-01885
Location: Citywide
Recommendation: Pass a Motion authorizing the City Manager or City Manager's designee to execute a Professional Services Agreement with Financial Credit Network, Inc. to provide collection agency services for an initial one-year period, with an option to renew for four additional one-year periods.
Contact: Laterre Walsh, Program Manager, Department of Finance, (916) 808-7800, [email protected], Jackie Rice, Finance Manager, Department of Finance, (916) 808- 5844, [email protected]
Attachments
1-RFP Evaluation and Rating Summary
2-Resolution for Debt Collection Agency Services
3-Contract
Description / Analysis
Issue Detail: The City of Sacramento has utilized Financial Credit Network to provide collection agency services for the recovery of City revenue since 1998. Financial Credit Network has recovered over $13 million on behalf of the City. These are monies that were owed to the City and would not be otherwise recoverable.
The City recently conducted a Request for Proposal (RFP) P25061241001 for debt collection agency services. The City received nine bids from agencies to provide these services. A selection committee was made up of staff from the Department of Utilities and the Department of Finance, Revenue Division. The committee reviewed the proposals and evaluated them based on the agencies’ qualifications and experience, work plan and schedule and cost proposal. Financial Credit Network was selected as the most qualified and experienced agency to perform the requested services. The evaluation and rating summary is attached.
Policy Considerations: The recommendations in this report are consistent with the provisions of City Code Chapter 3.64 regarding contracts for professional services. In accordance with the
File ID: 2024-01885 12/3/2024 Consent Item 12.
Sacramento City Code Section 4.04.020 and Council’s Rules of Procedure (Chapter 7, Section E.2.d) unless waived by a 2/3 vote of the City Council, all labor agreements and all agreements greater than $1,000,000 shall be posted on the City’s website and be made available to the public at least 10 days prior to council action. The collection and recovery of delinquent debt due the City is consistent with the City Council’s policy of collecting funds for General Fund and Enterprise Fund operations to provide essential City services.
Environmental Considerations: None.
Sustainability: None.
Commission/Committee Action: None.
Rationale for Recommendation: In July 2024, the City’s Procurement Services Division, in accordance with City Code chapter 3.64, issued a Request for Proposal (P25061241001) for Debt Collection Agency Services. Based on a panel review of the proposals, staff recommend awarding the contract to Financial Credit Network.
These services will be utilized after multiple unsuccessful internal attempts to collect delinquent debts due to the City. Assignment of delinquent accounts to a third-party collection agency will allow for additional collection actions and options not available to the City (e.g. reporting delinquent debts to credit reporting agencies). This revenue recovery provides funding for the delivery of City services.
Financial Considerations: Debt collection agency services provide the City with additional General Fund revenues that would otherwise not likely be collected. Compensation for the debt collection agency services is on a contingency basis, collected as a percentage of the delinquent revenue recovered for the City, and is added to the amount owed to the City.. There is no net cost to the City for debt collection agency services of delinquent City accounts. Under this agreement, the commissions paid to the collection agency will be borne by the debtor. Costs associated with the collection of an amount owed the City, regardless of whether the City pursues said collection through litigation or by any other means, will be added to the debt due the City. The City estimates that this amount will be $1.25 million over the course of the five-year contract term.
Local Business Enterprise (LBE): None.
Qualifications 30 Points Work Plan 35 Points Cost Proposal 35 Points LBE 5 Points Average Score Evaluator 1 30 27 28
Evaluator 2 28 32 0
Evaluator 3 28 35 30
Evaluator 4 30 35 35
Evaluator 5 30 35 35
Average 29 33 26 N/A 88
Evaluator 1 30 27 35
Evaluator 2 30 27 0
Evaluator 3 30 35 35
Evaluator 4 30 28 35
Evaluator 5 30 35 35
Average 30 30 28 N/A 88
Evaluator 1 30 30 34.5
Evaluator 2 30 24 0
Evaluator 3 22 17 23
Evaluator 4 30 33 35
Evaluator 5 20 35 35
Average 26 28 26 N/A 80
Evaluator 1 30 30 32
Evaluator 2 26 20 0
Evaluator 3 26 33 20
Evaluator 4 30 30 32
Evaluator 5 20 25 35
Average 26 28 24 N/A 78
Evaluator 1 30 30 29
Evaluator 2 22 24 0
Evaluator 3 26 21 25
Evaluator 4 28 34 30
Evaluator 5 23 22 25
Average 26 26 22 N/A 74
Evaluator 1 30 30 20
Evaluator 2 25 27 0
Evaluator 3 28 35 24
Evaluator 4 30 32 20
Evaluator 5 20 15 30
Average 27 28 19 N/A 73
Evaluator 1 30 27 33
Evaluator 2 25 14 0
Evaluator 3 16 22 35
Evaluator 4 25 30 32
Evaluator 5 15 10 20
Average 22 21 24 N/A 67
Evaluator 1 25 25 28
Evaluator 2 30 23 0
Evaluator 3 15 24 6
Evaluator 4 25 32 25
Evaluator 5 16 23 15
Average 22 25 15 N/A 62
Evaluator 1 20 20 30
Evaluator 2 25 14 0
Evaluator 3 15 16 12
Evaluator 4 15 28 33
Evaluator 5 15 10 25
Average 18 18 20 N/A 56
City of Sacramento
RFP - Collection Agency Services
Proposal Evaluation and Rating Summary
FDR Alliance
Financial Credit Network, Inc.
General Revenue Corporation
I.C. System, Inc.
Rash Curtis - KBR Inc.
Ray Klein, Inc dba: Professional Credit Service
RSI Enterprises, Inc.
AllianceOne Receivables Management, Inc.
Evergreen Professional Recoveries
RESOLUTION NO. 2025-
Adopted by the Sacramento City Council
Authorizing Financial Credit Network to collect on fees owed to the city.
BACKGROUND
A. In accordance with chapter 1.28.040, of the Sacramento City Code, the City may pursue any and all legal and equitable remedies for the collection of unpaid city fines, taxes, interest, fees, service charges, civil penalties, administrative penalties, and any other sum required to be paid. Upon giving advance written notice that the debtor will be subject to collection costs if the debtor does not pay the unpaid amount owed to the city, the city shall be entitled to recover reasonable attorneys' fees and cos ts associated with the collection of the amount owed regardless of whether the city pursues said collection through litigation or by any other means. As used herein, "costs" include, but are not limited to, city staff time incurred in the collection of the amount owed, third -party costs incurred in the collection action, and those costs set forth in Code of Civil Procedure Section 1033.5. Pursuit of one remedy does not preclude the pursuit of any other remedies until the total amount owed has been collected. (Ord. 2008 -007 § 2; Ord. 2005- 038 § 1
)
B. The City has entered into an agreem ent for revenue recovery services with Financial Credit Network and wishes to authorize Financial Credit Network to pursue collection through all legal and equitable remedies for collection from the debtor on behalf of the City.
C. All legal prerequisites prior to the adoption of the Resolution have occurred.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. Financial Credit Network is authorized to pursue collection through all legal and equitable remedies for collection from the debtor on behalf of the city.
Section 2. Financial Credit Network is authorized to pursue collection through litigation or by any other means.
Section 3. Pursuant to Sacramento City Code chapter 1.28.040 the debtor will be subject to the costs of pursuing collection through Financial Credit Network, a third-party debt collection agency.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Page 1 of 3 CONTRACT #: PRC003261
CONTRACT NAME:COLLECTION AGENCY SERVICES
CONTRACT PROJECT #: 06001241 – 1 - 433061
DEPARTMENT: FINANCE
DIVISION: REVENUE
CITY O
F SACRAMENTO
PROFE
SSIONAL SERVICES AGREEMENT*
THIS CO
NTRACT (“Contract” or “Agreement”) is made at Sacramento, California, by and between the CITY OF SACRAMENTO, a charter city and municipal corporation (“CITY”), and FINAN
CIAL CREDIT NETWORK, INC
2922 WEST MAIN STREET
VISALIA, CA 93291
800-540-9011/[email protected]
(“CONTRA
CTOR”), as of the Effective Date, as defined below.
The Ci
ty and CONTRACTOR agree as follows:
1. Effec
tive Date. This Contract shall be effective beginning September 1, 2024.
2. Contra
ct Documents. All exhibits and documents attached or referred to in this Contract are incorporated as if set forth herein, Including Exhibit A (titled “ Scope of Services”) and Exhibit B (titled “Payment”).
If there
is a conflict between the terms and conditions of any document prepared or provided by the CONTRACTOR and made a part of this Contract and the other terms or conditions of the Contract, the other terms and conditions of the Contract control.
3. Services
. Subject to the terms and conditions set forth in this Contract, CONTRACTOR shall provide to CITY the services described in Exhibit A (“Services”).
CONTRA
CTOR will not be compensated for services outside the scope of Exhibit A (“Additional Services”) unless, before providing Additional Services : (a) CONTRACTOR notifies CITY and CITY agrees that the Additional Services are outside the scope of Exhibit A; (b) CONTRACTOR estimates the additional compensation required for these A dditional Services; and (c) CITY, after notice, approves in writing a Supplemental Contract specifying the Additional Services and the amount of additional compensation to be paid CONTRACTOR.
CITY will
have no obligations whatsoever under this Contract or any Supplemental Contract , unless and until this Contract or any Supplemental Contract is approved by the City as required ____________________
_______
* This form is to be used for all professional services, except services performed by architects, landscape - arc
hitects, professional engineers, or professional land surveyors, or services related to a construction project.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Page 2 of 3
by the Sacramento City Code. As used in this Contract, the term “Services” includes both Services and Additional Services as applicable.
4. Payment. CITY shall pay CONTRACTOR at the times and in the manner set forth in Exhibit B.
CONTRACTOR shall submit all invoices to CITY in the manner specified in Exhibit B.
5. Facilities and Equipment. Except as set forth below, CONTRACTOR shall, at its sole cost and expense, furnish all facilities and equipment required for CONTRACTOR to perform this Contract.
CITY shall furnish to CONTRACTOR only the facilities and equipment listed below, if any.
N/A
6. Insurance. CONTRACTOR shall, at its sole cost and expense, maintain the insurance coverage described in the attached Exhibit C.
7. General Conditions. CONTRACTOR shall comply with the terms and conditions set forth in the attached Exhibit D.
8. Additional Requirements for Surveying, Material Testing, and Inspection Services. If this Contract includes any land surveying, material testing, or inspection services provided for a CITY construction project, during the design, pre -construction, construction, or post- construction phases of the project, the CONTRACTOR and any sub contractor or subconsultant performing any such services shall comply with the provisions specified in Exhibit E.
9. Non-Discrimination in Employee Benefits. This Contract may be subject to Sacramento City Code chapter 3.54, Non- Discrimination in Employee Benefits by CITY contractors. A summary of the requirements, entitled "Requirements of the Non-Discrimination in Employee Benefits Code (Equal Benefits Ordinance),” can be viewed at:
https://www.cityofsacramento.org/Finance/Procurement/Contract-Ordinances .
CONTRACTOR acknowledges and represents that CONTRACTOR has read and understands the requirements and shall fully comply with all applicable requirements of Sacramento City Code chapter 3.54. If requested by CITY, CONTRACTOR shall promptly provide any documents and information required by CITY to verify CONTRACTOR's compliance.
CONTRACTOR's violation of Sacramento City Code chapter 3.54 constitutes a material breach of this Contract, for which the CITY may terminate the Contract and pursue all available legal and equitable remedies.
10. Considering Criminal Conviction Information in the Employment Application Process. This Contract may be subject to the requirements of Sacramento City Code chapter 3.62, Procedures for Considering Criminal Conviction Information in the Employment Application Process . A summary of the requirements, entitled “Ban-The-Box Requirements,” can be viewed at:
https://www.cityofsacramento.org/Finance/Procurement/Contract-Ordinances .
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Page 3 of 3 The Ban-The-Box Requirements are applicable to certain contracts with the CITY in an amount of $250,000 or more (either initial value or total value after amendment) or if the total value of all CONTRACTOR's contracts with the City is $250,000 or more over a 12-month period.
CONTRACTOR acknowledges and represents that CONTRACTOR has read and understands these requirements and shall fully comply with all applicable requirements of Sacramento City Code chapter 3.62. If requested by CITY, CONTRACTOR shall promptly provide any documents and information required by CITY to verify CONTRACTOR's compliance. CONTRACTOR shall require applicable subcontractors to fully comply with all applicable requirements of Sacramento City Code chapter 3.62 and include these requirements in all subcontracts covered by Sacramento City Code chapter 3.62.
CONTRACTOR'S violation of Sacramento City Code chapter 3.62 constitutes a material breach of this Contract, for which the CITY may terminate the Contract and pursue all available legal and equitable remedies.
11. Local Business Enterprise Program . The Local Business Enterprise Program Participation Requirements ("LBE Participation Requirements") may be applicable to this Contract. A summary of the requirements, entitled "LBE Participation Requirements," can be viewed at:
https://www.cityofsacramento.org/Finance/Procurement/Contract-Ordinances .
CONTRACTOR acknowledges and represents that CONTRACTOR has read and understands these requirements and shall fully comply with all applicable requirements of Sacramento City Code chapter 3.60. If requested by CITY, CONTRACTOR shall promptly provide any documents and information required by CITY to verify CONTRACTOR's compliance. CONTRACTOR shall require applicable subcontractors to fully comply with all applicable requirements of Sacramento City Code chapter 3.60 and include these requirements in all subcontracts covered by Sacramento City Code chapter 3.60.
CONTRACTOR's violation of Sacramento City Code chapter 3.60 constitutes a material breach of this Contract, for which the CITY may terminate the Contract and pursue all available legal and equitable remedies.
12. Authority. The person signing this Contract for CONTRACTOR represents and warrants that he or she has read, understands, and agrees to all the Contract terms and is fully authorized to sign this Contract on behalf of the CONTRACTOR and to bind the CONTRACTOR to the performance of the Contract’s obligations.
[Signatures Page Following Exhibits]
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit A - Page 1 of 2
EXHIBIT A
SCOPE OF SERVICES
1. Representatives.
The CITY Representative for this Agreement is:
Laterre Walsh, Receivables & Collections Program Manager 915 I Street, Room 1201
Sacramento, CA 95814
916-808-7800/[email protected]
The CONTRACTOR Representative for this Agreement is:
Alicia Sundstrom, President
2922 West Main Street
Visalia, CA 93291
800-541-9011/[email protected]
Unless otherwise provided in this Contract, a ll CONTRACTOR questions and correspondence pertaining to this Contract must be addressed to the CITY Representative. All CITY questions and correspondence must be addressed to the CONTRACTOR Representative.
2. Scope of Services. CONTRACTOR shall provide Services to CITY as set forth in Attachment 1 to this Exhibit A.
3. Time of Performance. The Services described in this Contract shall be provided for one year.
The CITY shall extend this Contract for up to [ four] additional one-year terms, for a maximum five-year term. CONTRACTOR shall provide the Services in accordance with any schedule in Attachment 1 to this Exhibit A.
4. Conflict of Interest Requirements. The individual(s) who will provide Services pursuant to this Contract are “Consultants” within the meaning of the Political Reform Act and the CITY’S Conflict of Interest Code. ____ yes __X__ no [check one]
CONTRACTOR shall cause the following to occur within 30 days after execution of this Contract:
(A) Identify the individuals who will provide Services or perform Work under this Contract as "Consultants"; and
(B) Cause these individuals to file with the City Representative the "assuming office" statements of economic interests required by the CITY’S Conflict of Interest Code.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit A - Page 2 of 2
Thereafter, throughout the term of the Contract, CONTRACTOR shall cause these individuals to file with the CITY Representative annual statements of economic interests and "leaving office" statements of economic interests, as required by the CITY’S Conflict of Interest Code. The CITY may withhold all or a portion of any payment due under this Contract or impose fines on the individuals until all required statements are filed.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit B - Page 1 of 2
EXHIBIT B
PAYMENT
1. CONTRACTOR’s Compensation. The total of all fees paid to the CONTRACTOR for the provision of Services as set forth in Exhibit A, including any authorized reimbursable expenses, shall not exceed the total sum of $1,250,000.00. The payments specified in this Exhibit B shall be the only payments made to CONTRACTOR unless the CITY approves a Supplemental Contract.
2. Billable Rates. CONTRACTOR shall be paid for the performance of Services on an hourly rate, daily rate, flat fee, lump sum, or other basis, as set forth in Exhibit A or Attachment 1 to this Exhibit B and any applicable special provisions included in the request for bids or proposals. If there is a conflict between Exhibit A or Exhibit B and the Special Provisions, Exhibit A or Exhibit B controls.
3. CONTRACTOR’s Reimbursable Expenses. “ Reimbursable Expenses” are limited to actual expenditures of CONTRACTOR for expenses that are necessary for the proper satisfaction of the Contract and are only payable if specifically authorized in advance in writing by the CITY . No charges or markup will be allowed unless specified in the Contract, including charges for travel and transportation.
4. Payments to CONTRACTOR. CONTRACTOR is responsible for supplying all documentation necessary to verify invoices to the CITY’S satisfaction.
A. Payments to CONTRACTOR shall be made within a reasonable time after receipt of CONTRACTOR’s invoice, in proportion to services performed or as otherwise specified in Attachment 1 to Exhibit B. CONTRACTOR may request payment on a monthly basis.
CONTRACTOR shall be responsible for the cost of supplying all documentation necessary to verify the monthly billings to the satisfaction of CITY.
B. Invoices must be submitted to either of the addresses specified below. (1) Email. Submit email invoices and any attachments to:
(2) Postal Mail. If emailing is not an option, mail to:
A/P Processing Center
City of Sacramento
915 I Street, Floor 4
Sacramento, CA 95814-2608
C. All invoices submitted by CONTRACTOR must contain the following information:
(1) Job/Project Name
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit B - Page 2 of 2 (2) CITY’s current Purchase Order Number
(3) CONTRACTOR’s Invoice Number
(4) Date of Invoice Issuance
(5) Work Order Number (if applicable)
(6) CITY representative identified on the Purchase Order (7) CONTRACTOR’s remit address
(8) Description of services billed under Invoice
(9) Amount of Invoice (itemize all authorized Reimbursable Expenses) (10) Total Billed to Date under Contract (if applicable)
D. Items must be separated into Services and Reimbursable Expenses. Invoices that do not conform to the format outlined above will be returned to CONTRACTOR for correction.
CITY is not responsible for delays in payment to CONTRACTOR resulting from CONTRACTOR’s failure to comply with the invoice format described above.
5. Additional Services. Additional Services shall be provided only when a Supplemental Contract authorizing the Additional Services is approved in writing by the CITY in accordance with the CITY’S contract amendment procedures. The CITY reserves the right to perform any Additional Services with its own staff or to retain other CONTRACTORs to perform the Additional Services.
6. Accounting Records of CONTRACTOR. During performance of this Contract and for a period of three years after completion of performance, CONTRACTOR shall maintain all accounting and financial records related to this Contract , in accordance with generally accepted accounting practices, including records of CONTRACTOR’s costs for performance under this Contract and records of CONTRACTOR ’s Reimbursable Expenses. CONTRACTOR shall keep and make records available for inspection and audit by representatives of the CITY upon reasonable written notice.
7. Tax Payments. CONTRACTOR shall pay, when and as due, any and all taxes incurred as a result of CONTRACTOR’s compensation hereunder, including estimated taxes, and shall provide CITY with proof of the payment upon request. CONTRACTOR hereby agrees to indemnify CITY for any claims, losses, costs, fees, liabilities, damages or injuries suffered by CITY arising out of CONTRACTOR’s breach of this section.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit C - Page 1 of 5
EXHIBIT C
INSURANCE
1. Insurance Requirements. During the entire term of this Agreement, CONTRACTOR shall maintain insurance coverage as described in this Exhibit.
Full compensation for all premiums that CONTRACTOR is required to pay for the insurance coverage described herein shall be included in the compensation specified for the Services provided by CONTRACTOR under this Agreement. No additional compensation will be provided for CONTRACTOR’S insurance premiums.
If CONTRACTOR maintains broader coverage and/or higher limits than the minimums shown below, the CITY requires and shall be entitled to the broader coverage and/or the higher limits maintained by CONTRACTOR. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY.
It is understood and agreed by CONTRACTOR that its liability to the CITY shall not in any way be limited to or affected by the amount of insurance coverage required or carried by CONTRACTOR in connection with this Agreement.
2. General Liability Minimum Scope and Limits of Insurance Coverage.
A. Commercial General Liability Insurance providing coverage at least as broad as ISO CGL Form 00 01 on an occurrence basis for bodily injury, including death, of one or more persons, property damage, and personal injury, arising out of activities performed by or on behalf of CONTRACTOR, its sub -consultants, and sub contractors, products and completed operations of CONTRACTOR, its sub -consultants, and sub contractors, and premises owned, leased, or used by CONTRACTOR, its sub -consultants, and subcontractors, with limits of not less than one million dollars ($1,000,000) per occurrence. The policy shall provide contractual liability and products and completed operations coverage for the term of the policy. If a general aggregate limit applies, either the general aggregate limit shall apply separately (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
B. The CITY, its officials, employees, and volunteers shall be covered by policy terms or endorsement as additional insureds as respects general liability arising out of: activities performed by or on behalf of CONTRACTOR, its sub -consultants, and sub contractors; products and completed operations of CONTRACTOR, its sub -consultants, and subcontractors; and premises owned, leased, or used by CONTRACTOR, its sub - consultants, and subcontractors.
3. Automobile Liability Minimum Scope and Limits of Insurance Coverage. (Check the applicable provision.)
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit C - Page 2 of 5 ____ Automobile Liability Insurance is required providing coverage at least as broad as ISO Form CA 00 01 for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than one million dollars ($1,000,000) per occurrence. The policy shall provide coverage for owned, non-owned and/or hired autos as appropriate to the operations of CONTRACTOR.
The CITY, its officials, employees and volunteers shall be covered by policy terms or endorsement as additional insureds as respects auto liability.
_X_ No automobile liability insurance is required, and by signing this Agreement, CONTRACTOR certifies as follows:
“CONTRACTOR certifies that a motor vehicle will not be used in the performance of any work or services under this agreement. If, however, CONTRACTOR does transport items under this Contract, or this Contract is amended to require any employees of CONTRACTOR to use a vehicle to perform services under the Contract, CONTRACTOR understands that it must maintain and provide evidence of Automobile Liability Insurance providing coverage at least as broad as ISO Form CA 00 01 for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than one million dollars ($1,000,000 ) per occurrence. The policy shall provide coverage for owned, non-owned and/or hired autos as appropriate to the operations of the CONTRACTOR.”
4. Umbrella or Excess Policies.
A. CONTRACTOR may use Umbrella or Excess policies to provide the liability limits as required. This form of insurance will be acceptable provided that the Primary and Umbrella or Excess Policies shall provide all of the insurance coverage required, including but not l imited to primary and non -contributory, additional insured, Self -Insured Retentions (SIRs), indemnity, and defense obligations. Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided in the underlying primary policy.
B. Any Umbrella or Excess insurance shall contain, or be endorsed to contain, a provision that it shall apply on a primary basis for the benefit of the CITY, and any insurance or self- insurance maintained by the CITY, its officials, employees, or volunteers shall be in excess of such umbrella or excess coverage and shall not contribute with it. No insurance policies maintained by the CITY, whether Primary or Excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the CONTRACTOR’S Primary and Excess liability policies are exhausted.
5. Workers’ Compensation Minimum Scope and Limits of Insurance Coverage. (Check the applicable provision.)
____ Workers’ Compensation Insurance is required with statutory limits and Employers' Liability Insurance with limits of not less than one million dollars ($1,000,000). The
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit C - Page 3 of 5 Workers' Compensation policy shall include a waiver of subrogation in favor of the CITY.
CONTRACTOR agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the CITY has received a waiver of subrogation endorsement from an insurer.
_X__ No work or services will be performed on or at CITY facilities or CITY Property.
Therefore, a Workers’ Compensation waiver of subrogation in favor of the CITY is not required.
____ No Workers’ Compensation insurance is required, and by signing this Agreement, CONTRACTOR certifies as follows:
“CONTRACTOR certifies that its business has no employees, and that it does not employ anyone, and is therefore exempt from the legal requirements to provide Workers' Compensation insurance. If, however, CONTRACTOR hires any employee during the term of this Agreement, CONTRACT understands that Workers’ Compensation with statutory limits and Employer’s Liability Insurance with a limit of not less than one million dollars ($1,000,000) is required. The Workers’ Compens ation policy will include a waiver of subrogation in favor of the CITY.”
6. Professional Liability Minimum Scope and Limits of Insurance Coverage. Professional Liability Insurance providing coverage on a claims-made basis for errors and omissions, or malpractice with limits of not less than one million dollars ($1,000,000):
__X__ Is ____ Is not [check one] required for this Agreement.
A. If Professional Liability insurance is required:
(1) The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.
(2) Insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of the contract.
(3) If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the CONTRACTOR must purchase “extended reporting” coverage for a minimum of three (3) years after completion of contract work.
7. Other Insurance Provisions. The policies are to contain, or be endorsed to contain, the following provisions:
A. CONTRACTOR’S insurance coverage, including excess insurance, shall be primary and non- contributory insurance as respects the CITY, its officials, employees, and volunteers. Any insurance or self-insurance maintained by the CITY, its officials, employees, or volunteers shall be in excess of CONTRACTOR’S insurance and shall not contribute with it.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit C - Page 4 of 5
B. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the CITY, its officials, employees, or volunteers.
C. Coverage shall state that CONTRACTOR’S insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.
D. The CITY will be provided with thirty (30) days written notice of cancellation or material change in the policy language or terms.
8. Waiver of Subrogation. CONTRACTOR hereby grants to the CITY a waiver of any right to subrogation which any insurer of CONTRACTOR may acquire against the CITY by virtue of the payment of any loss under such insurance. CONTRACTOR agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the CITY has received a waiver of subrogation endorsement from the insurer.
9. Acceptability of Insurance. Insurance shall be placed with insurers with a Bests’ rating of not less than A:VI. Self-insured retentions, policy terms or other variations that do not comply with the requirements of this Section must be declared to and approved by the CITY in writing prior to execution of this Agreement.
10. Verification of Coverage
A. CONTRACTOR shall furnish the CITY with certificates and required endorsements evidencing the insurance required. The certificates and endorsements shall be forwarded to the CITY representative named in Exhibit A. Copies of policies shall be delivered to the CITY on demand.
B. During the term of this Agreement, CONTRACTOR shall send insurance certificates and endorsements, including policy renewals, directly to:
City of Sacramento
c/o EXIGIS LLC
P.O. Box 947
Murrieta, CA 92564
Insurance certificates also may be e-mailed to:
[email protected]
C. Certificate Holder must be listed as:
City of Sacramento
c/o Exigis LLC
PO Box 947
Murrieta, CA 92564
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit C - Page 5 of 5
D. The CITY may withdraw its offer of contract or cancel this Agreement if the certificates of insurance and endorsements required have not been provided prior to execution of this Agreement. The CITY may withhold payments to CONTRACTOR or cancel this Agreement if the insurance is canceled or CONTRACTOR otherwise ceases to be insured as required herein.
11. Subcontractors. CONTRACTOR shall require and verify that all sub -consultants and subcontractors maintain insurance coverage that meets the minimum scope and limits of insurance coverage specified in this Exhibit.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 1 of 10
EXHIBIT D
GENERAL CONDITIONS
1. Independent CONTRACTOR.
A. It is understood and agreed that CONTRACTOR (including CONTRACTOR’s employees) is an independent CONTRACTOR and that no relationship of employer -employee exists between the parties hereto for any purpose whatsoever. Neither CONTRACTOR nor CONTRACTOR’s assigned personnel wi ll be entitled to any benefits payable to CITY employees. CITY is not required to make any deductions or withholdings from the compensation payable to CONTRACTOR under the provisions of this Contract , and CONTRACTOR will be issued a Form 1099 for its services hereunder. As an independent CONTRACTOR, CONTRACTOR hereby agrees to indemnify and hold CITY harmless from any and all claims that may be made against CITY based upon any contention by any of CONTRACTOR’s employees or by any third party, including any state or federal agency, that an employer -employee relationship or a substitute therefor exists for any purpose whatsoever by reason of this Contract or by reason of the nature and/or performance under this Contract.
B. It is further understood and agreed by the parties that CONTRACTOR, in the performance of its obligations, is subject to the City’s control and direction as to the designation of tasks to be performed and the results to be accomplished under this Contract, but not as to the means, methods, or sequence used by CONTRACTOR for accomplishing the results.
To the extent that CONTRACTOR obtains permission to, and does, use CITY facilities, space, equipment or support services in the performance of this Contract, this use will be at the CONTRACTOR’s sole discretion based on the CONTRACTOR’s determination that the use will promote CONTRACTOR’s efficiency and effectiveness. Except as may be specifically provided elsewhere in this Contract , the CITY does not require that CONTRACTOR use CITY facilities, equipment or support services or work in CITY locations in the performance of this Contrac t. As used in this Contract, "sole discretion" or "sole judgment" means that the party authorized to exercise its discretion or judgment may do so based on an unfettered assessment of its own interests, without considering how its decision affects the other party, and unconstrained by the implied covenant of good faith and fair dealing.
C. If, in the performance of this Contract, any third persons are employed by CONTRACTOR, such persons will be entirely and exclusively under the direction, supervision, and control of CONTRACTOR. Except as otherwise provided in this Contract, all terms of employment, including hours, wages, working conditions, discipline, hiring, and discharging, or any other terms of employment or requirements of law, shall be determined by CONTRACTOR. It is further understood and agreed that CONTRACTOR will issue W-2 or
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 2 of 10 1099 Forms for income and employment tax purposes for all CONTRACTOR’S assigned personnel and subcontractors.
D. CONTRACTOR’S duties and services under this Contract do not include preparing or assisting the CITY with any portion of the CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with the CITY. The CITY at all times retains responsibility for public contracting, including with respect to any subsequent phase of the project contemplated by this Contract. CONTRACTOR’s participation in the planning, discussions, or drawing of project plans or specifications is limited to conceptual, preliminary, or initial plans or specifications. CONTRACTOR shall cooperate with the CITY to ensure that all bidders for a subsequent contract on any subsequent phase of the project contemplated by this Contract have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONTRACTOR pursuant to this Contract.
E. The provisions of this s ection will survive any expiration or termination of this Contract .
Nothing in this Contract creates an exclusive relationship between CITY and CONTRACTOR. CONTRACTOR may represent, perform services for, or be employed by any additional persons or companies s o long as CONTRACTOR does not violate the provisions of Section 5, below.
2. Licenses; Permits, Etc. CONTRACTOR represents and warrants that CONTRACTOR has, and shall maintain at all times during the term of this Contract at its sole cost and expense, all licenses, permits, qualifications, and approvals of any nature that are legally required for CONTRACTOR to practice its profession or fulfill the terms of this Contract , including a City Business Operations Tax Certificate and any required certification issued by the California Secretary of State.
3. Time. Time is off the essence in the performance of this Contract. CONTRACTOR shall devote the necessary time and effort to its performance under this Contract. Neither party will be considered in default of this Contract , to the extent that party’s performance is prevented or delayed by any cause, present or future, that is beyond the reasonable control of that party.
4. CONTRACTOR Not Agent. Except as CITY may specify in writing, CONTRACTOR and CONTRACTOR’S personnel have no authority, express or implied, to act on behalf of CITY in any capacity whatsoever as an agent. CONTRACTOR and CONTRACTOR’S personnel shall have no authority, express or implied, to bind CITY to any obligations whatsoever.
5. Conflicts of Interest. CONTRACTOR covenants that neither it, nor any officer or principal of its firm, has or will acquire any interest, directly or indirectly, that would conflict in any manner with the CITY ’S interests or that would in any way hinder CONTRACTOR’S performance under this Contract. CONTRACTOR further covenants that in the performance of this Contract, no person having any such interest will be employed by it as an officer, employee, agent or sub contractor, without the CITY’S written consent.
CONTRACTOR agrees to avoid conflicts of interest or the appearance of any conflicts of interest with the CITY’S interests during the performance of this Contract. If CONTRACTOR is or employs
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 3 of 10 a former officer or employee of the CITY, CONTRACTOR and any former City officer or employee shall comply with the provisions of Sacramento City Code Section 2.16.090 pertaining to appearances before the City Council or any CITY department, board, commission, or committee.
6. Hazardous Substances. "Hazardous Substances" means any substance, material, waste, or other pollutant or contaminant that is or becomes designated, classified, or regulated as hazardous or toxic under any law, regulation, rule, order, decree, or other governmental requirement now in effect or later enacted. If CONTRACTOR is shipping Hazardous Substances, CONTRACTOR must supply a Safety Data Sheet ("SDS") with the first shipment of Hazardous Substances to each City location receiving the Hazardous Substances. If the content of an SDS is revised, CONTRACTOR must provide a revised SDS to each CITY location receiving Hazardous Substances.
7. Confidentiality of CITY Information. During performance of this Contract , CONTRACTOR may gain access to and use CITY information regarding inventions, machinery, products, prices, apparatus, costs, discounts, future plans, business affairs, governmental affairs, processes, trade secrets, technical matters, systems, facilities, customer lists, product design, copyright, data, and other vital information (hereafter collectively referred to as “City Information”) that are valuable, special and unique assets of the CITY.
CONTRACTOR agrees to protect all City Information and treat it as strictly confidential, and further agrees that CONTRACTOR shall not at any time, either directly or indirectly, divulge, disclose or communicate in any manner any City Information to any third party without the CITY’S prior written consent.
In addition, CONTRACTOR must comply with all CITY policies governing the use of the CITY network and technology systems, as set forth in applicable provisions of the City of Sacramento Administrative Policy Instructions # 30. A violation by CONTRACTOR of this section is a material violation of this Contract and shall justify legal and equitable relief.
8. CONTRACTOR Information.
A. CITY shall have full ownership and control, including ownership of any copyrights, of all information prepared, produced, or provided by CONTRACTOR under this Contract. In this Contract, the term “information” means and includes: any and all work product, submittals, reports, plans, specifications, and other deliverables consisting of documents, writings, handwritings, typewriting, printing, photostatting, photographing, computer models, and any other computerized data and every othe r means of recording any form of information, communications, or representation, including letters, works, pictures, drawings, sounds, or symbols, or any combination thereof. CONTRACTOR shall not be responsible for any unauthorized modification or use of such information for other than its intended purpose by CITY.
B. CONTRACTOR shall fully defend, indemnify and hold harmless CITY, its officers and employees, and each of them, from and against any and all claims, actions, lawsuits or other proceedings alleging that all or any part of the information prepared, produced, or
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 4 of 10 provided by CONTRACTOR under this Contract infringes upon any third party’s trademark, trade name, copyright, patent or other intellectual property rights. CITY shall make reasonable efforts to notify CONTRACTOR not later than ten days after CITY is served with any such claim, action, lawsuit or other proceeding . However, City’s failure to provide notice within the ten- day period does not relieve CONTRACTOR of its obligations hereunder, which survive any termination or expiration of this Contract.
C. All proprietary and other information received from CONTRACTOR by CITY, whether received in connection with CONTRACTOR’s proposal to CITY or in connection with CONTRACTOR’s performance, will be disclosed upon receipt of a request for disclosure, in accordance with the California Public Records Act; provided, however, that, if any information is set apart and clearly marked “trade secret” when it is provided to CITY, CITY shall give notice to CONTRACTOR of any request for the disclosure of such information. The CONTRACTOR will then have five days from the date it receives notice to petition the court for a protective order to prevent the disclosure of the information.
The CONTRACTOR shall have sole responsibility for defense of the actual “trade secret” designation of such information.
D. The parties understand and agree that any failure by CONTRACTOR to respond to the notice provided by CITY and seek a protective order, in accordance with the provisions of subsection C, above, constitute s a complete waiver by CONTRACTOR of any rights regarding the information designated “trade secret” by CONTRACTOR, and the information will be disclosed by CITY in accordance with the Public Records Act.
9. Notification of Material Changes in Business. CONTRACTOR agrees that if it experiences any material changes in its business, including a reorganization, refinancing, restructuring, leveraged buyout, bankruptcy, name change, or loss of key personnel, it will immediately notify the City of the changes. CONTRACTOR also agrees to immediately notify the City of any condition that may jeopardize the scheduled delivery or fulfillment of CONTRACTOR's obligations to the City under this Contract.
10. Standard of Performance. CONTRACTOR shall perform in the manner and according to the standards currently observed by a competent practitioner of CONTRACTOR’S profession in California and in compliance with all requirements of this Contract . All products that CONTRACTOR delivers to CITY under this Contract must be prepared in a professional manner and conform to the standards of quality normally observed by a person currently practicing in CONTRACTOR’s profession.
CONTRACTOR shall assign only competent personnel to perform on its behalf under this Contract.
CONTRACTOR must notify the CITY in writing of any changes in CONTRACTOR’s staff assigned to perform under this Contract, before any performance by the new staff member . If the CITY, in its sole discretion, determines that any person assigned by the CONTRACTOR to perform under this Contract is not performing in accordance with the standards required herein, CITY shall provide notice to CONTRACTOR. CONTRACTOR shall immediately remove the assigned person upon receipt of the notice.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 5 of 10
11. Performance or Different Terms and Conditions. The CITY’S subsequent performance will not be construed as either acceptance of additional or different terms and conditions or a counteroffer by the CONTRACTOR, nor will the CITY’S subsequent performance be viewed as acceptance of any provision of the Uniform Commercial Code, as adopted by any State, that is contrary to the terms and conditions contained herein. CONTRACTOR's performance shall conform to the applicable requirements of the Sacramento City Charter, Sacramento City Code, and all applicable State and Federal laws, and all the requirements of this Contract. The California Commercial Code will apply except as otherwise provided in the Contract.
12. Emergency/Declared Disaster Requirements. If an emergency is declared by the City Manager, or if any portion of the CITY is declared a disaster area by the county, state or federal government, this Contract may be subjected to increased usage. The CONTRACTOR shall serve the CITY during a declared emergency or disaster, subject to the same terms and conditions that apply during non-emergency / non-disaster conditions. The pricing set forth in this Contract will apply, without mark-up, regardless of the circumstances. If the CONTRACTOR is unable to fulfill the terms of the Contract because of a disruption in its chain of supply or service, then the CONTRACTOR shall provide proof of the disruption. Acceptable forms of proof will include a letter or notice from the CONTRACTOR'S source stating the reason for the disruption.
13. Term; Suspension; Termination.
A. This Contract is effective on the Effective Date and continues in effect until both parties have fully performed their respective obligations under this Contract, unless sooner terminated as provided herein.
B. CITY shall have the right at any time to suspend CONTRACTOR’S performance hereunder, in whole or in part, by giving a written notice of suspension to CONTRACTOR. Upon receipt of such notice , CONTRACTOR shall immediately suspend its activities under this Contract, as specified in the notice.
C. The CITY shall have the right to terminate this Contract at any time by giving a written notice of termination to CONTRACTOR. Upon receipt of such notice , CONTRACTOR shall immediately cease performance under this Contract as specified in the notice. If the CITY terminates this Contract:
(1) CONTRACTOR shall, not later than five days after receipt of the notice, deliver all information prepared under this Contract to the City.
(2) The CITY shall pay CONTRACTOR the reasonable value of Goods or Services provided by CONTRACTOR before termination; provided, however, CITY shall not in any manner be liable for lost profits that might have been made by CONTRACTOR had the Contract not been terminated or had CONTRACTOR completed performance required by this Contract. CONTRACTOR shall furnish to the CITY any financial information requested by the City to determine the reasonable value of the Goods or Services provided by CONTRACTOR. The
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 6 of 10 foregoing is cumulative and does not affect any right or remedy that CITY may have in law or equity.
14. Default by CONTRACTOR. In case of default by the CONTRACTOR, the CITY reserves the right to procure the Goods or Services from other sources and deduct from any monies due, or that may thereafter become due to the CONTRACTOR, the difference between the price named in this Contract and the actual cost to the City to procure from an alternate source. Prices paid by the CITY will be considered the prevailing market price at the time such purchase is made.
15. Indemnity.
A. Indemnity: CONTRACTOR shall defend, hold harmless, and indemnify City, its officers, and employees, and each and every one of them, from and against all actions, damages, costs, liabilities, claims, demands, losses, judgments, penalties, and expenses of every type and description, whether arising on or off the site of the work or services performed under this Contract, including any fees and costs reasonably incurred by City’s staff attorneys or outside attorneys and any fees and expenses incurred in enforcing this provision (hereafter collectively referred to as “Liabilities”), including Liabilities for personal injury or death, damage to personal, real, or intellectual property, damage to the environment, contractual or other economic damages, or regulatory penalties, arising out of or in any way connected with performance of or failure to perform this Contract by CONTRACTOR, any sub contractor (including lower -tier subcontractors) or agent of CONTRACTOR, their respective officers and employees, and anyone else for wh ose acts of omissions any of them may be liable, whether or not the Liabilities (i) are caused in part by a party indemnified hereunder, or (ii) are litigated, settled, or reduced to judgment; provided that the foregoing indemnity does not apply to liabili ty for damages for death or bodily injury to persons, injury to property, or other loss, damage, or expense, to the extent arising from the active negligence or willful misconduct of, or defects in design furnished by, City, its agents, servants, or indepe ndent CONTRACTORs who are directly responsible to City, except when such agents, servants, or independent CONTRACTORs are under the supervision and control of CONTRACTOR or any sub contractor (including lower-tier subcontractors) or agent of CONTRACTOR.
B. Insurance Policies; Intellectual Property Claims : The existence or acceptance by City of any of the insurance policies or coverages described in this Contract will not affect or limit any of City’s rights under this Section, nor will the limits of any insurance limit the liability of CONTRACTOR hereunder. This Section will not apply to any intellectual property claims, actions, lawsuits or other proceedings subject to the provisions of the CONTRACTOR Information Section, above.
C. Survival. The provisions of this section will survive any expiration or termination of this Contract.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 7 of 10
16. Funding Availability.
A. This Contract is subject to the budget and fiscal provisions of the Charter and the Sacramento City Code.
B. The CITY’S payment obligation under this Contract will not exceed the amount of funds appropriated and approved for this Contract by the Sacramento City Council.
C. This Section shall govern over any other contrary provision of the Contract.
17. Equal Employment Opportunity. During the performance of this Contrac t, CONTRACTOR, for itself, its assignees and successors in interest, agrees as follows:
A. Compliance With Regulations: CONTRACTOR shall comply with all state, local, and federal anti-discrimination laws and regulations, including the Executive Order 11246 entitled “Equal Opportunity in Federal Employment”, as amended by Executive Order 11375, 12086, and 13672, and as supplemented in Department of Labor regulations (41 CFR Chapter 60), referred to collectively as the “Regulations.”
B. Nondiscrimination: CONTRACTOR, with regards to the work performed by it after award and before completion of the work under this Contract, shall not discriminate on the ground of race, color, religion, sex, national origin, age, marital status, physical handicap or sexual orientation in selection and retention of subcontractors, including procurement of materials and leases of equipment. CONTRACTOR shall not participate either directly or indirectly in discrimination prohibited by the Regulations.
C. Solicitations for sub contractors, Including Procurement of Materials and Equipment: In all solicitations either by competitive bidding or negotiations made by CONTRACTOR for work to be performed under any subcontract, including all procurement of materials or equipment, each potential subcontractor or supplier shall be notified by CONTRACTOR of CONTRACTOR’S obligation under this Contract and the Regulations relative to nondiscrimination on the ground of race, color, religion, sex, national origin, age, marital status, physical handicap or sexual orientation.
D. Information and Reports: CONTRACTOR shall provide all information and reports required by the Regulations, or by any orders or instructions issued pursuant thereto, and shall permit access to its books, records, accounts, other sources of information and its facilities as may be determined by the CITY to be pertinent to ascertain compliance with the Regulations, orders and instructions. Where any information required of CONTRACTOR is in the exclusive possession of another who fails or refuses to furnish this information, CONTRACTOR shall so certify to the CITY, and shall set forth what efforts it has made to obtain the information.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 8 of 10 E. Sanctions for Noncompliance: In the event of noncompliance by CONTRACTOR with the nondiscrimination provisions of this Contract, the CITY shall impose any sanctions it determines are appropriate including:
(1) Withholding of payments to CONTRACTOR under this Contract until CONTRACTOR complies;
(2) Cancellation, termination, or suspension of this Contract, in whole or in part.
F. Incorporation of Provisions: CONTRACTOR shall include the provisions of subsections A through E, above, in every subcontract, including procurement of materials and leases of equipment, unless exempted by the Regulations, or by any order or instructions issued pursuant thereto. The CITY may direct CONTRACTOR to take specific actions to enforce these provisions, including sanctions for noncompliance; provided, however, that if CONTRACTOR becomes involved in, or is threatened with, litigation with a subcontractor or supplier as a result of such direction, CONTRACTOR may request that the CITY join such litigation to protect the CITY’S interests.
18. Entire Agreement. This Contract, including all Exhibits and documents referenced herein, contains the entire agreement between the parties and supersedes whatever oral or written understanding they may have had before the execution of this Contract . No alteration to the terms of this Contract shall be valid unless approved in writing by CONTRACTOR, and by CITY, in accordance with applicable provisions of the Sacramento City Code.
19. Modification of Contract. The CONTRACTOR shall take no direction from any City employee that changes the executed terms and conditions of the Contract, including Exhibit A , or any change that impacts the cost, price, or schedule, before receiving a written, signed modification to the Contract.
20. Severability. If a court with jurisdiction rules that any portion of this Contract or its application to any person or circumstance is invalid or unenforceable, the remainder of this Contract will not be affected thereby and will remain valid and enforceable as written, to the greatest extent permitted by law.
21. Waiver. Neither the CITY’s acceptance of, or payment for, any Goods or Services, nor any waiver by either party of any default, breach or condition precedent, will be construed as a waiver of any provision of this Contract, nor as a waiver of any other default, breach or condition precedent or any other right hereunder. No waiver will be effective unless it is in writing and signed by the waiving party.
22. Governing Law. This Contract shall be governed, construed and enforced in accordance with the laws of the State of California, except that the rule of interpretation in California Civil Code section 1654 will not apply. Venue of any litigation arising out of this Contract will lie exclusively in the state trial court or Federal District Court located in Sacramento County in the State of California, and the parties consent to jurisdiction over their persons and over the subject matter of any such litigation in such courts, and consent to service of process issued by such courts.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 9 of 10
23. Assignment Prohibited. The expertise and experience of CONTRACTOR are material considerations for this Contract. CITY has a strong interest in the qualifications and capability of the persons and entities that will fulfill the obligations imposed on CONTRACTOR under this Agreement. In recognition of this interest, CONTRACTOR shall not assign any right or obligation pursuant to this Contract without the written consent of the CITY. Any attempted or purported assignment without CITY’s written consent shall be void and of no effect.
24. Binding Effect. This Contract is binding on the heirs, executors, administrators, successors and assigns of the parties, subject to the provisions of Section 23, above.
25. Compliance with Laws. The CONTRACTOR shall be responsible for strict compliance with all applicable laws, regulations, court orders and other legal requirements applicable to the work to be accomplished under the Contract, including the California Occupational Safety and Health Act and all applicable safety orders issued by the Division of Occupational Safety and Health, Department of Industrial Relations, State of California, and all applicable requirements of Underwriters Laboratories and the Federal Communication Commission.
26. Debarment Certification
A. Pursuant to 2 CFR, Part 200, and applicable Executive Orders, the City is restricted in its ability to contract with certain parties that are debarred, suspended, or otherwise excluded or ineligible for participating in Federal assistance programs or activ ities. By signing this Agreement, CONTRACTOR warrants and certifies under penalty of perjury under the laws of the State of California that CONTRACTOR, including any owner, partner, director, officer, or principal of the CONTRACTOR, or any person in a posi tion with management responsibility or responsibility for the administration of federal funds:
(1) Is not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal or state department/agency;
(2) Has not within a three -year period preceding this certification been convicted of or had a civil judgment rendered against it for: commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public transaction or contract (federal, state, or local); violation of federal or state antitrust statutes; or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, or other criminal felony;
(3) Is not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state, or local) with commission of any of the offenses enumerated in paragraph (b) above; or
(4) Has not, within a three -year period preceding this certification, had one or more public contracts (federal, state, or local) or transactions terminated for cause or default.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit D - Page 10 of 10
(5) Has not been notified, within a three-year period preceding this certification, been notified of any delinquent Federal taxes in an amount that exceeds $3,500 for which the liability remains unsatisfied. Federal taxes are considered delinquent if the tax liability has been finally determined and the taxpayer is delinquent in making payment, as defined in Section 52.209 -5 of the Federal Acquisition Regulations.
B. CONTRACTOR further warrants and certifies that it shall not knowingly enter into any transaction with any sub contractor, material supplier, or vendor who is debarred, suspended, declared ineligible, or voluntarily excluded from covered transactions by any federal or state department/agency. Any exceptions to the warranties and certifications in this Section must be disclosed to the CITY.
C. Exceptions will not necessarily result in denial of recommendation for award, but will be considered in determining CONTRACTOR’S responsibility. Disclosures must indicate to whom exceptions apply, the initiating agency, and dates of action.
D. City will review the Federal Government’s System for Award Management Exclusions maintained by the General Services Administration for eligibility, prior to the execution of this Agreement. The CONTRACTOR shall provide immediate written notice to the City if, at any time prior to execution, the CONTRACTOR learns this certification is erroneous or has become erroneous by reason of changed circumstances. If it is later determined that the CONTRACTOR’S warranties and certification in this Section were erroneous, the CITY may terminate this Agreement for default.
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit E - Page 1 of 2
EXHIBIT E
ADDITIONAL REQUIREMENTS FOR SURVEYING, MATERIAL TESTING, AND INSPECTION SERVICES
The Services provided under this Contract include land surveying, material testing, or inspection services provided for a CITY construction project during the design, pre -construction, construction, or post- construction phases of the project. Therefore, the services include “Public Work” under the California Labor Code and is subject to the following requirements:
A. Payment of Prevailing Wages : CONTRACTOR and any sub contractor(s) performing any Public Work shall comply with the provisions of Sacramento City Code S ection 3.60.180 and applicable provisions of the California Labor Code, which require, among other things, that CONTRACTOR and all subcontractors pay not less than the prevailing rate of wages, as determined by the Director of the California Department of Industrial Relations (“DIR”) in accordance with California Labor Code S ection 1773. CONTRACTOR and every subcontractor shall maintain payroll records and submit certified payrolls and other labor compliance documentation electronically when and as required by CITY. In addition, Labor Code Section 1771.4 requires the CONTRACTOR and any subcontractor performing any Public Work to furnish electronic payroll records directly to the Labor Commissioner.
CONTRACTOR shall include these requirements in every subcontract.
This Agreement is subject to compliance monitoring and enforcement by the DIR, as specified in California Labor Code S ection 1771.4. The CONTRACTOR and any subcontractor will be subject to withholding and penalties for violation of prevailing wage requirements in accordance with applicable law, including Labor Code Sections 1726, 1741, 1771.5, and 1775, and City Code Section 3.60.180. Questions regarding the CITY’S Labor Compliance Program should be directed to the City Representative.
B. DIR Registration: California Labor Code Section 1725.5 requires the CONTRACTOR and all subcontractors performing Public Works services to be currently registered with the DIR, as specified in California Labor Code Section 1725.5. California Labor Code Section 1771.1 provides that a CONTRACTOR or subcontractor shall not be qualified to bid on, be listed in a bid proposal (subject to the requirements of Section 4104 of the California Public Contract Code), or engage in the performance of any contract for Public Work, unless currently registered and qualified to perform Public Work in accordance with Californ ia Labor Code Section 1725.5.
Further information can be found on DIR’s website at http://www.dir.ca.gov/Public- Works/contractors.html. The above summary is provided solely for informational purposes and does not in any way affect the CONTRACTOR’s and sub contractors’ obligation to comply in all respects with all other applicable laws and regulations. The CONTRACTOR shall disseminate these provisions to all subcontractors.
Before the performance of work by CONTRACTOR or any subcontractor(s) under this Contract, CONTRACTOR shall furnish CONTRACTOR’S and any subcontractors’ current
PROFESSIONAL SERVICES AGREEMENT
Form Approved by City Attorney 1-30-2024 Exhibit E - Page 2 of 2 DIR registration number(s). The CONTRACTOR’s current DIR registration number and the current DIR registration number of all subcontractors will be listed on the Subcontractors and LBE Participation Verification Form, incorporated herein.
To be completed by the City Representative if this Agreement is for the performance of any Public Work:
CONTRACTOR DIR registration #: N/A
C. Workers’ Compensation Certification. In accordance with California Labor Code Section 1861, by signing this Contract, CONTRACTOR acknowledges and represents that CONTRACTOR is aware of the provisions of S ection 3700 of the California Labor Code which requires every employer to be insured against liability for workers' compensation or to undertake self -insurance in accordance with the provisions of that code, and that CONTRACTOR will comply with the provisions of the Labor Code before commencing performance under this Contract.
D. Apprentices. If this Contract is for the performance of any Public Work, and the amount of the Contract is $30,000 or more, the CONTRACTOR and any subcontractors performing any Public Work under this Contract must comply with and be subject to enforcement under, the provisions of Sacramento City Code Section 3.60.190, Section 1777.5 et seq. of the California Labor Code, and implementing regulations set forth in Title 8 of the California Code of Regulations, governing the employment of apprentices. The CONTRACTOR and any subcontractors performing Public Work will be subject to penalties for apprenticeship violations in accordance with Labor Code Section 1777.7.
E. Working Hours. If this Contract is for the performance of any Public Work, CONTRACTOR and any sub contractors performing any Public Work under this Contract must comply with and be subject to enforcement under, the provisions of Sacramento City Code Section 3.60.180 and California Labor Code Section 1810 et seq., governing the working hours of employees performing Public Work.
F. Failure to Comply with Labor Compliance. If all applicable labor compliance requirements are not met, the City will have the right to withhold or reject a payment request and/or invoice, in whole or in part, without in any way relieving CONTRACTOR or its subcontractors of any obligations under this Contract.
G. Subcontractors. The CONTRACTOR shall include these provisions A through F in every subcontract or sub -agreement for any subcontractors performing work under this Contract.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
1 Commencement and Order of Precedence. This exhibit (“Exhibit 1A”) supplements and incorporates by this reference the Professional Services Agreement between the City of Sacramento (“City” or “CITY”) and the Financial Credit Network, Inc. (“CONTRACTOR” or “Agency”) for the Collection Agency Service project, (the “Project”), (the “Agreement”).
This Exhibit 1A is the scope of services for the Agreement. In the event of conflict between the provisions of this Exhibit 1A and the Agreement, the provisions of this Exhibit 1A shall prevail. The meaning or definition given to words or phrases in the Agreement shall apply to similar words or phrases used herein unless defined otherwise in this Exhibit 1A.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
2 Scope of Services. CONTRACTOR shall provide the services described herein.
The flowchart below illustrates standard workflow from initial placement to resolution/closing of account.
Day1-3
Day4
PAID.IN FULL
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
3 Collection Services. The Agency shall attempt collection by correspondence, telephone or other electronic means of all accounts referred to it by the City to persuade consumers to pay for their responsibilities, while maintaining the integrity of the consumer, the Agency and the City. The Agency shall adhere to all applicable federal laws, state laws or City policies or laws pertaining to the collection of delinquent accounts.
Input of Account Services. The City may assign delinquent accounts (“delinquent account” or “account”) to the Agency by electronic mail (“e-mail”) or electronic transfer on the Agency's regular assignment sheets, similar electronic method prepared by the City, or other mediums that are compatible with the Agency's technology as agreed to by the City. For the purpose of this Agreement, “delinquent accounts” or “accounts” shall mean unpaid fines, taxes, interest, fees, service charges, civil penalties, administrative penalties, and any other sum required to be paid to the City under any provision of the Sacramento City Code or any other law. The City shall make available to the Agency information that is necessary to perform an efficient collection service.
Agency’s Receipt of Account Data. Agency shall input all accounts assigned into the Agency's database within three (3) business days from receipt of data. Agency shall send written confirmation to the City of Agency’s receipt of account data and its input of account data into its database within five (5) days of receipt of such data.
Initial Action Following Account Placement. Agency shall make all reasonable efforts to collect the amounts owed under the accounts. The Agency shall pursue collection of all accounts according to the standards issued by the City. The standards issue by the City shall include the “work standards” identified in section 4(e), below. During the first 48-72 hours upon confirmation of receipt of the accounts as provided in section 2(a) above, the Agency shall input accounts into Agency’s collection system, namely, CUBS, and cross- reference the accounts against its database of over 4,000,000 accounts for matching name, social security number, driver’s license number, and account number. The Agency shall first mail the account’s debtor a written notice. The Agency shall mail the notice to the name and address associated with the account as provided by the City. The Agency shall mail the notice within five (5) calendar days of receipt of the account. The Agency shall batch the accounts to multiple account enrichment services such as NCOA Source, CBCInnovis, and other similar services.
Multi-Language Program. The Agency shall split off and assign to Agency’s staff who are bilingual the accounts that qualify for the Agency’s Multi-Language Program. The Multi- Language Program shall be used with accounts for which the Agency has no linguistic expertise.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
4 Hearing Impaired. The Agency shall use relay calls when speaking with those debtors who are either hearing or vision impaired.
Work Standards. Following is a breakdown of the work standards for Agency:
Account Balance Skip Tracing Efforts System Notices
Less than $49.99 CUBS Database, NCOA Up to 2
$50 - $99.99 CUBS Database, NCOA,
Manual Search Up to 2
$100-$499.99 CUBS Database, NCOA, Skip
Trace Waterfall, Manual
Search
Up to 3
$500+ CUBS Database, NCOA,
Skip Trace Waterfall, Clear
Up to 4
Work standards for telephone attempts have been modified to meet the requirements of Regulation F. They also vary according to several different situations. Our dialing is prioritized by new business, today's work, broken plans, and any previous day's work.
Other standards include:
Call Result Action
Busy Account updated for same day call back
No Answer Account updated for call back in three
days
Message on Voicemail Account updated for call back in 14 days.
Message with Live Person Account updated for call back in seven days
Skip Trace. Each account that does not have a valid telephone number is to be skipped upon placement and then at regular intervals going forward.
Subcontractors. The Agency shall seek and obtain prior written consent from City before subcontracting the services.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
5 Compliance. The Agency shall utilize Compliance Team to ensure conformity with all applicable laws, rules and regulations. The Compliance Team is responsible to ensure compliance at all levels on a consistent basis including federal and state collection laws and regulations as well as City specific training, policies, and laws. As laws and regulations change, training programs are to be designed and administered to the entire staff to ensure constant compliance:
Handle all incoming disputes.
Handle all complaints received by mail, phone, portal, Better Business Bureau, Attorney General, Consumer Financial Protection Bureau or any other regulatory agencies.
Handle all consumer lawsuits. Handle HIPAA risk assessments.
Create, maintain FCN policies and procedures and monitor compliance. Provide new hire training and ongoing collector training as needed.
Provide recertification training for all employees annually.
Monitor changes to state and federal laws and inform upper management. Provide training as needed.
Provide client training as needed
Legal Action. If the Agency is unable to collect an account directly, the account may be referred to an attorney of the Agency's choice for legal action. Agency and City shall enter into a written agreement for the assignment of the account prior to the commencement of any legal action. All legal fees shall be paid by the Agency.
Payment Options. At no additional cost to the City, the Agency shall provide debtor with several different options with which to pay their delinquent billing: In Person, By Mail, VISA/MasterCard/Debit Card, ACH (Automated Clearing House) MoneyGram, or FCN Website.
Payment Plans. Any payment plan offered by Agency to debtor to recover the accounts and collection costs shall allow for time-payment agreements. The Agency shall place the following statement on all collection notices notifying debtor that time-payment agreements are available: “Website: Go to fcnetwork.biz to make a payment or set up a payment plan.” When Agency has contacted the debtor, it is the Agency’s staff’s job to determine the debtor’s ability to pay.
If the debtor and the Agency’s staff have mutually agreed upon a payment arrangement, the arrangement is to be tracked for completion of promised payments.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
6 Settlement Offers. The Agency shall not offer settlements on City’s accounts. On the rare occasion where an attorney or estate is involved, the Agency may only accept a compromise or settlement with the City’s written prior consent.
Reconciliation, Remittance and Reports. All notices and correspondence will direct the debtor to remit payment directly to the Agency. Agency shall remit amounts due to City under this Agreement and furnish a monthly report, by account type category, of all remittances of collections made on all collection activities to the City on or before the 15th day of each month for all sums collected during the preceding month. At the City's option, upon thirty (30) calendar days written notice, a different frequency may be established such as on a weekly or bi-weekly basis. The Agency shall furnish a detailed report on the amount collected and the amount charged to the City for all collection services.
Annual Report. The Agency shall submit an annual report (on a fiscal year) through June 30, reflecting the activity for the previous fiscal year. This report shall include data for each account detailing the value of the current debt, money received, charges waived, interest charged, balance due and date of last payment. A financial summary shall also be included showing "period to date" and "year to date" totals for pertinent information, such as, receipts, net accounts receivable, total accounts receivable, and collection percentage. In addition, the Agency shall make an aging report available in summary and in detail.
Assigned Account Debtors Payments to City. City shall notify the Agency, on accounts assigned to the Agency, of any such payments received by the City within five (5) business days from the date of receipt of such payment or upon discovery of such payment.
City Separate Account. Agency to maintain a client trust account where City’s funds are kept separate from the Agency’s operating account.
Account Recovery Documents. Agency’s clerical and accounting departments are to handle all the paperwork associated with collecting delinquent accounts. Annually, the Agency’s accounting department procedures are to be analyzed by CPA firm, Noell, Agnew, and Morse to ensure proper handling of all accounting transactions.
City Audit Access to Information. Ensure all records pertaining to any current or past accounts assigned are available for audit by City or its authorized representative at any time.
Agency’s access. The City shall provide the Agency with electronic media access to the unpaid accounts.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
7 Same Day Posting. The Agency shall post all monies received to the individual accounts on the same day the payment is received. If a debtor has more than one account in system, the payment is to be posted to the oldest account in the group of accounts. The Agency’s computer system is to create an audit trail for every transaction on each account, which is to remain with the account indefinitely. Deposits are to be taken to the bank via armored transport daily.
Once a Month Remittance. The Agency shall remit collected funds to the City once per month via ACH and email the statements.
Credit Reporting. The Agency shall report all eligible accounts assigned to the Agency that are over $50.00 to all three credit reporting agencies, Experian, Trans Union and Equifax.
The Agency shall update accounts that qualify for reporting (per the National Consumer Assistance Plan) monthly via FTP electronic file. For accounts that qualify, the Agency shall update the credit report with the City’s accounts at 35 calendar days from date of assignment. For the City’s ambulance accounts, the required wait is until day 180.
Debtor Status Report. Agency shall furnish the City with debtor status reports and statistical reports monthly and/or automatically at determined intervals. The Agency may provide the City with access to debtor status reports on a secured web site or other electronic methods as approved by the City Information Technology Department.
ALS Billings. If during collection of any ALS billing, the Agency discovers that the debtor has medical care coverage through Medicare, MediCal or other public assistance or indigent care programs, the account will be cancelled and referred for billing to the City, or the City's designated ALS billing vendor. If the City can collect on such accounts, the Agency will be entitled to payment for such accounts at the rate set forth in Attachment 1 to Exhibit B of this Agreement. For those accounts which the City is not able to collect from Medicare, MediCal or other public assistance program, such accounts will be returned to the Agency to resume collection actions, and the Agency will be entitled to payment at the rate set forth in Attachment 1 to Exhibit B of this Agreement upon successful collection of the debt.
Interest on Accounts. The Agency shall not assess interest on accounts assigned by the City. However, if legal action is taken on an account and judgment is awarded in favor of the Agency, interest may accrue at the statutory rate on the judgment from the date of entry of the judgment.
Withdrawal and Cancellation of Accounts. The City shall have the right to withdraw or cancel accounts forwarded to the Agency at any time. The Agency's fees will be due on any payment received on accounts(s) cancelled by the City. Agency will not reactivate accounts previously returned to the City, without express written permission by the City.
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
8 Transition of Accounts at Contract Expiration and Non-R enewal. In the event this Agreement expires and is not renewed or is terminated or suspended at any time during the time of performance, all active and open accounts that have been assigned to the Agency shall be returned to the City within six (6) months. The Agency may continue follow-up collection activity during the six-month period. Alternatively, at the City's discretion, all accounts shall be returned to the City within fifteen (15) days of written notice to the Agency, and all collection activities of the Agency shall cease.
A
dditional Services. The City shall make no payment for extra, further or additional services or expenses unless such services or expenses and the price are agreed to in advance and such Agreement is in writing and executed by the Agency and the City.
Billing Invoice. Send request for payment of fees due the Agency to [email protected]
.
No net cost to City. Commissions earned by CONTRACTOR will be borne by the debtor. Costs associated with the collection of an amount owed the City, regardless of whether the City pursues said collection through litigation or by any other means, will be added to the debt due the City.
File Retention. Setup of all programs, data files and data retention are to be done at no additional charge to the City. Data files to be maintained by vendor for five (5) years.
Invoice and accounting records will be maintained by vendor for one (1) year.
Client Accounts. The Agency shall maintain separate accounts for the City for the purposes of remittance processing and statistical reporting for each of the following account type categories:
4 th R Program
Advanced Life Support Ambulance (ALS) Services
Animal Control
Code Compliance Administrative Penalties
Cannabis
Community Development
Emergency Response (DUI) Recovery
Fire Services
Judgements
Marina
Miscellaneous Accounts Receivables
Parking Fees
Police False Alarms and Alarm Permits
Real Property Transfer Tax
EXHIBIT 1A
SCOPE OF SERVICES
Exhibit 1A
Collection Agency Services 2024
9 Rental Housing Inspection
RISK Damage Claims
Sidewalk Repair
Tenant Protection Program
Urban Forestry Tree Cutting Permits
Utilities Billing
Weed Abatement
and any additional categories as required by the City
EXHIBIT 1B
FEE SCHEDULE
Exhibit 1B
Collection Agency Services 2024
1 Commencement and Order of Precedence. This attachment (“Exhibit B”) supplements and incorporates by this reference the Professional Services Agreement between the City of Sacramento (“City” or “CITY”) and the Financial Credit Network, Inc. (“CONTRACTOR” or “Agency”) for the Collection Agency Service project, (the “Project”), (the “Agreement”). This Exhibit B is the fee schedule for the Agreement. In the event of conflict between the provisions of this Exhibit B and the Agreement, the provisions of this Exhibit B shall prevail. The meaning or definition given to words or phrases in the Agreement shall apply to similar words or phrases used herein unless defined otherwise in this Exhibit B.
Rates. Agency shall be entitled to a commission at the rates set forth below in the Commission Rate Tables on all delinquent accounts, as defined by Exhibit A, collected from whatever source on the delinquent accounts assigned by the City. The rate for any category of such accounts not contained in the rate schedules below shall be mutually agreed upon by the City and Agency.
Account Type Collection
Accounts
Contingency
Fee:
Litigation
Fee:
Cannabis $.01 -
$10,000
12% 17%
Cannabis $10,001-
$50,000
10% 15%
Cannabis $50,001-
$100,000
8% 13%
Cannabis $100,001+ 5% 10%
Ambulance All 24% 28%
Utility (SACUTL) All 18% 28%
SACDOT; SACMAR; SACTTC; SACF4R All 18% 25%
SACFIR; SACRSK; SACMSC; SACDPW; SACDUI; SACCDD All 20% 28% SACFWA, SACADM, SACANM, SACPOL, SACTPP, SACRHI, SACPRK All 22% 28%
No net cost to City. Commissions earned by CONTRACTOR will be borne by the debtor. Costs associated with the collection of an amount owed the City, regardless of whether the City pursues said collection through litigation or by any other means, will be added to the debt due the City.
Collection of Attorney’s Fees. In accordance with section III, above, the Agency shall recover from the debtor of each delinquent account all reasonable attorney's fees and other related legal costs incurred to collect the delinquent accounts owed to City. Agency will retain 100% of any attorney’s fees and legal costs recovered from the debtor to offset out of pocket costs.
Cost of Collection. In accordance with section III above, the Agency shall recover from the debtor its reasonable costs associated with the collection of the amount owed to the City, regardless of whether such collection is pursued through litigation or other means. The gross amount to be collected includes the principal amount owed to the City plus the commission earned by the Agency.
Funds owed from the Delinquent Account Paid to the City. Pursuant to section III, for each delinquent
EXHIBIT 1B
FEE SCHEDULE
Exhibit 1B
Collection Agency Services 2024
2 account that the Agency collects payment, the Agency shall pay to the City the principal amount owed by the debtor to the City. This amount does not include the costs identified in sections IV and V, above.
By way of example, this cost of collection will apply as follows:
Collection Accounts. If the amount owed for a delinquent account is $100, which shall be referred to in the Agreement as the “principal amount,” and the commission rate is 23 percent of the principal amount of the debt, then the full collection amount is $123, and the Agency's commission of $23 is 18.7 percent of the gross amount ($123) collected. The Agency is entitled to the $23 and the Agency shall pay to the City the principal amount of $100.
In no case shall Agency's commission charged to debtors for such accounts exceed the commission rate established for the account categories set forth above in the Commission Rate Table for Collection Accounts.
Litigated Accounts. Because litigating a case requires Agency to incur additional front-end costs, Agency is authorized to charge debtor a larger commission to be able to recoup those additional costs. For example, if the debt for a litigated account is $100 and the commission rate is 30.5 percent of the principal amount of the debt, then the full collection amount is $130.50, and the Agency's commission of $30.50 is 23.4 percent of the gross amount ($130.50) collected. In no case shall Agency's commission charged to debtors for such accounts exceed the commission rate established for the account categories set forth above in the Commission Rate Table for Litigated Accounts.
Partial Payment Collections. The commission rates set forth above apply to any partial payment collections where the City agrees to accept less than the principal amount due.