HomeMy WebLinkAbout05 ONLINE UTILITY COLLECTION SERVICES~` • Agenda Item 5
AGENDA REPORT Reviewed:
~~'~-~ City Manager
~~"~ Finance Director
MEETING DATE: APRIL 6, 2010
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
SUBJECT: AGREEMENT FOR UTILITY COLLECTION SERVICES
SUMMARY:
With the current economic situation the City is experiencing a greater percentage of
unpaid closed water accounts. Staff proposes contracting with Online Information
Services Inc. (Online) to provide collection services for unpaid water accounts.
RECOMMENDATION:
It is recommended that the City Council approve the Online agreement for Utility
Collection Services.
FISCAL IMPACT:
Online charges a standard 35% processing fee on all accounts collected. The 35%
processing fee is charged to the unpaid water account so there is no cost to the Water
Enterprise Fund.
BACKGROUND:
The City currently utilizes Online's Utility Exchange application screening tools for
compliancy with "Red Flag Rules". A division within Online is Collection Services.
Currently, delinquent closed accounts are increasing and recovery of the bad debt
decreasing. The City does not have the necessary resources to perform collection
services, however, Online is able to leverage the data submitted by utilities across the
nation through the Utility Exchange to recover the debt promptly.
Respectfully submitted,
Pamela Arends-King J Interrante
Finance Director Customer Service Lead
Attachments: Online Information Services Collection Services Agreement.
COLLECTIONS
AGREEMENT FOR UTILITY COLLECTION SERVICES
This Service Agreement ("Agreement") is entered into by ONLINE Information Services, Inc., (hereafter referred to as
"Collector"), a North Carolina corporation, dba/ ONLINE Collections and City of Tustin (hereafter referred to as
"Creditor"), a California municipal corporation, as of this day of February, 2010. Collector and Creditor agree as
follows:
WHEREAS, Creditor agrees to submit to Collector, each month, for collection certain claims, accounts or other
evidences of Indebtedness (hereinafter called "Claims"), and
WHEREAS, Collector desires to provide Creditor with collection services and/or accounts receivable
management services with respect to said Claims.
NOW THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, it is mutually agreed
by and between the parties hereto as follows:
1. All activities of Collector shall be carried out in compliance with all applicable federal, state and local laws.
2. Collector agrees to indemnify and defend the Creditor, its council members, officers, employees, and
agents, against any and all actions, claims, penalties, obligations, or liabilities that may be asserted or
claimed by any person, firm, entity, corporation, political subdivision or other organization arising out of the
intentional or negligent acts, errors, or omissions of Contractor, its agents, employees, or subcontractors.
3. Creditor hereby warrants that all Claims forwarded to Collector will be valid and legally enforceable debts,
and that Creditor will, both before and after forwarding said Claims, comply with all applicable federal, state
and focal laws with respect thereto. Further, Creditor agrees to provide, whenever requested to do so by
Collector: a written verification of a Claim: a copy of the judgment, if any, on which a Claim is based: the
name and address of the person or entity to whom the debt was originally owed, if different from Creditor.
4. If any court of competent jurisdiction shall rule that any provision of the Agreement is invalid or
unenforceable, the remaining provisions shall remain in full force and effect and shall not be affected by
said ruling.
5. This Agreement shall be binding on the heirs, legal representatives, successors and assignees of the
parties hereto.
6. Creditor and Collector agree that all actions taken by Creditor and Collector pursuant to this Agreement
shall be in accordance with the terms and conditions, if any set forth on the attached terms and conditions.
Said terms and conditions are hereby made a part of this Agreement as fully and effectual as if they were
set forth herein. Thus, whenever the term "Agreement" is used herein, it shall be construed to include the
terms and conditions. This Agreement, including the terms and conditions, contains the entire agreement
between the parties hereto but may be amended or modified from time to time by mutual agreement and in
writing signed by both parties.
TERMS AND CONDITIONS
The parties agree as follows:
A. GENERAL. The Creditor may refer any Claims that exceed twenty five dollars ($25.00) to Collector for
collection.
B. RELATIONSHIP OF PARTIES. Collector agrees to employ those means necessary to represent Creditor in
collecting all Claims referred for collection. It is expressly understood that all Claims shall remain the property of
Creditor and that Collector is acting as an agent of Creditor for the recovery of Claims listed for recovery or in
the management of accounts receivable.
C. PROCEDURE.
1. Collector prefers to receive all Claims placed for collection by submission of a file to Collectors secure
website or secure ftp. If agreed by both parties, Collector will accept placements by computer print out, CD
or DVD transfer. Each placement shall contain the name of guarantor, service address, dates of service,
last known address, date of last payment, amount owed, social security number and phone number, and
any information that may help locate the debtor such as employer, names and addresses of relatives or
friends.
] ONLINE Utility Exchange Collections rev February 24, 2010
668134.1
2. Creditor agrees to place Claims with collector every month if possible.
3. Creditor agrees that once Claims are placed with Collector, Collector is entitled to commissions as detailed
in this agreement regardless of whether payment is made to Collector's office or directly to Creditor.
4. Creditor agrees to report all payments made to Creditor's office within 72 hours and Collector agrees to
identify the payment as part of Debtors file within 24 hours of notification of reported payments.
5. Creditor agrees and acknowledges that Collector will, from time to time, accept Checks and Credit cards as
a method of collection of debts owed Creditor. Furthermore, both parties agree and acknowledge that
these instruments serve as provisional settlements, and are subject to revocation, charge-back, dispute,
refund or dishonor by the issuing financial institution. In the event that these disputed or dishonored funds
have been remitted to the Creditor, both parties agree that this debt shall revert to an "Unpaid" status and
Creditor shall repay or refund the disputed or dishonored amount to Collector. Collector will add a debt
owed, by Debtor, directly to Collector for any NSF fees or charge-back fees incurred by Collector. At which
time, Collector will make its best effort to pursue the dishonored payment to recover the unpaid balance
owed Creditor.
D. DURATION OF REFERRAL
1. Creditor agrees that all Claims referred to Collector will be referred for a period of 12 months from the date
of referral and that this referral will automatically renew itself on each anniversary for a period not to exceed
six years and eleven months, unless Creditor notifies Collector in writing to cancel the claim. Creditor
agrees that any claim referred to Collector will not be referred to any other Collector.
2. Collector agrees to cease any communication with debtors if Creditor notifies Collector of a dispute.
3. Collector agrees to return to Creditor any Claims based on questionable circumstances.
E. SETTLEMENT OF CLAIMS. Creditor XX Agrees / Does Not Agree to grant Collector authority to
settle claims on Creditors behalf at 90~ % of the total amount of the claim. If Creditor does not
grant Collector general settlement authority Collector can only settle claims for less than the amount owed with
special, Gaim by claim, approval of Creditor. Said Approval may be given by telephone from Creditors office.
F. COLLECTION FEES.
1. In the event Creditor will be adding part, or all, of the Collector's fee for collections to the amount referred,
the percent of the collection fee that Creditor will be adding to the principal balance of the Claim is %.
2. Creditor warrants that any and all fees added to the principal amount of the Claim are allowed by their local
and/or state laws.
3. Creditor warrants that any and all fees added to the principal balance are outlined in their original
contracUagreement, with the Debtor, which created the Claim.
4. Creditor agrees that any such fee will be included in the amount of the Claim at the time the Claim is
originally referred to Collector for collections and reflected in the current outstanding balance in Creditor's
account receivable system.
G. CLAIM INTEREST ACCRUAL.
1. Where allowed by law, Creditor grants authority to Collector to continue the accrual of lawful interest
charges due on Creditor's Claims at -0- % of the principal balance.
2. Creditor confirms that the interest listed above is outlined in the original contract with the responsible party
for the Claim and that the continued accrual of interest, post delinquency, on the Claim is lawful in the
pertinent state of jurisdiction.
H. METHODS OF COLLECTION. Collector agrees to use effective and legal methods of collection. Efforts will be
continuous for a period of six years and eleven months from date of service unless prohibited by law. Collector
is a reporting agency and all Claims not collected in full or secured with a verified payment plan (e.g. credit
card, Electronic check, ACH draft or other commercially available methods) within 30 days of referral will be
placed on the individual's credit and/or consumer file.
I. LITIGATION.
1. Where allowed by law, Creditor grants authority to Collector to pursue litigation on its behalf to recover
monies owed Creditor. Creditor shall grant an authorized representative of Collector authority to file Claims
on Creditor's behalf and to represent Creditor in any court proceedings. It is understood that Collector shall
represent Creditor with Collector employees in small Claims proceedings, but will utilize a licensed attorney
where required by law.
2. Creditor understands that it will be required to sign an authorization/release, on a Claim by Claim basis,
giving Collector the authority to act as their agent to pursue legal action on their behalf on said Claim.
3. Creditor understands that Collector will advance monies necessary to initiate legal proceedings, but that
those monies shall be the first monies paid back from all payments made by the debtor, regardless of
whether those monies are paid to Collector or directly to Creditor.
4. Creditor understands that if for any reason this agreement is terminated all monies advanced in the pursuit
of legal proceedings on Claims that remain outstanding shall become due to Collector and will be invoiced
to Creditor by Collector.
5. Collector shall have authority to decide which debts to pursue through litigation on behalf of Creditor.
2 ONLINE Utility Exchange Collections rev February 24, 2010
668134.1
6. Collector will notify Creditor of all debts in which legal action has been initiated. Creditor agrees not to
communicate with debtor or to make any arrangements for partial payment, once legal action has been
initiated and to advise debtors to communicate directly with Collector to resolve those Claims.
J. ACCOUNTING
1. Collector shall have authority to receive payments from debtors in cash, check, money order, credit card,
Electronic check, ACH draft or other acceptable payment forms and will have the authority to endorse
checks, drafts, money orders or other negotiable instruments which are received from debtors.
2. Collector agrees to furnish a monthly statement to Creditor each month detailing each payment received at
Collector's office as well as all direct payments made to Creditor's office.
3. If desired by Creditor, Collector agrees to acknowledge the receipt of Claims placed for recovery with
Collector via an emailed report. It is understood and agreed that Creditor will correct any inaccuracies on
these Claims within 7 days of the sent date of these acknowledgements. In the event that no updates are
received by Collector, it is agreed that these Claims are correct and that any payments received by either
party on these Claims shall be a commissionable event.
K. RECONNECTION OF SERVICE
1. Definition. A "RECONNECT" is defined as a Claim where the consumer has terminated service voluntarily
or where services have been terminated by the utility/gas provider with the express intent, of the consumer,
of reinstating service within 5 months from the date of disconnect. In order to qualify as a "RECONNECT",
service must be reestablished at the exact same service address where utilities/gas were initially
disconnected within 5 months from the date of disconnect. Any variation on this definition shall not qualify
as a "RECONNECT".
2. Commissionable Actions.
a. Any bad debUcollection Claim turned over to Collector that results in payment directly to Collector or
any of its representatives as a result of any effort made by Collector shall be defined as a
commissionable Claim and not a "RECONNECT". These efforts are defined as, but not limited to:
letters, phone calls, voice messages, emails, scheduled payment plans or any combination of the
above listed actions.
b. Any bad debt/collection Claim turned over to Collector that results in payment directly to the utility/gas
provider and which strictly conforms to the definition listed above shall be considered as a
"RECONNECT'. As such, the utility/gas provider may reserve the right to recall the Claim from
Collector.
c. No "Second Placement" Claims will be eligible for "RECONNECT" status.
L. COMPENSATION AND PAYMENT TERMS
1. Creditor agrees to pay the rate of 35% for all Claims collected whose Date of Service and Date of Referral
to Collector are under a year.
2. Creditor agrees to pay the following rate of 35% for all Claims collected whose Date of Service and Date of
Referral to Collector are over a year.
3. All billing is processed monthly and is payable within 30 days following the invoice date.
Services will be immediately converted to a net basis when Creditor's Claim reaches 60 days
past due. Services will not be reinstated until the full outstanding balance is paid in full. If
account goes unpaid for 90 days the account will be referred to collections and/or legal
proceedings initiated. Creditor agrees to pay ONLINE's cost of collection, including reasonable
attorney fees if Collector must resort to collection to recover any unpaid balance owed by
Creditor. Invoices will be electronically mailed to the Accounts Payable Contact specified on the
attached Web User Set-Up Form.
M. INSURANCE. Collector shall not commence work under this Agreement until all certificates and endorsements
have been received and approved by the Creditor. All insurance required by the Agreement shall contain a
Statement of Obligation on the part of the carrier to notify the Creditor of any material change, cancellation or
termination at least thirty (30) days in advance. During the duration of this Agreement, Collector agrees to
maintain workers compensation insurance in the amount and type required by law, if applicable. Collector shall
also maintain commercial general liability insurance in an amount of $1,000,000.00 per occurrence. Claims
made and modified occurrence policies are not acceptable. Collector shall also maintain professional liability
insurance in an amount of $1,000,000.00. Insurance companies must be acceptable to Creditor and have a
Best's Guide Rating of A- Class VII or better, as approved by Creditor. Creditor, its officers, officials,
employees, agents and volunteers shall be named as an additional insureds on all insurance.
N. TERMINATION OF AGREEMENT. This contract is for a period of one year, and will automatically renew itself
each year thereafter unless either party notifies the other in writing at least sixty (60) days prior to the expiration
of said agreement. This agreement may be terminated by either party with asixty-day written notice.
3 ONLINE Utility Exchange Collections rev February 24, 2010
668134.1
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written.
Subscriber: City of Tustin
Signature:
ONLINE Information Services, Inc.
dba/ ONLINE Collections
By:
Print Name: Pamela Arends-King
' Cathy Keeler
Title: Director of Finance Account Executive
Email: PArends-Kind@tustinca.org
Date:
Date:
Fed. Tax ID Number: 95-6000804
Address:
Address of Principal Business Office:
300 Centennial Way
Tustin, CA 92780
Billing Address:
300 Centennial Way
Tustin, CA 92780
Telephone:
Fax:
PO Box 1489
Winterville, NC 28590
www.ONLI NECollections.com
(866) 630-6400
(800) 838-9830
ctr ONLINE Utility Exchange Collections rev February 24, 2010
668134.1
New Collections Customer Setup
Customer: Citv of Tustin
Mailing Address: 300 Centennial Way
Tustin, CA 92780
Physical Address: 300 Centennial Wav
Tustin CA 92780
County of Physical Address: Orange
ONLINE Rep: Cathy Keeler
Client Type: Utility
Software Vendor: Springbrook Software
Commission Rate: 35% < 1 year
35% > 1 year
Settlement Authorization: Y/N
Version: ~ • 05
90 %
Interest Accrual on Claims: Y/N oo
Placement Type (Please circle): Primary Secondary Tertiary
Invoice Type (Please circle): Net Gross
~~
Data Contributo : Ye / No
Adding Fees Yes No Dakcs Percentage:
Type(s) of Claims to be Referred: (Please circle all that apply)
Electric
Gas
Cable
Residential Telephone
Wireless Telephone
Commercial Telephone
In t
Water
Other:
Web Collection ~ Yes No Collections File Uploa :Yes / No
Acknowledge New usines Ye / No
Acknowledgement Contact Email: JInterrante@tustinca.org
ONLINE Utility Exchange Collections rev. Aug 11, 2008
WEBSITE USER SETUP
If you will be uploading collections file via the website please list users who will be uploading the
files. Password is required to be 8 digits both alpha and numeric and is case sensitive.
Password Expiration: 15t log in Never
User Full Name User Email Address User Name
Marie Parrett MParrett@tustinca.or MParrett
Da ar La cik DLa cik@tustinca. or DLa cik
Customer Contacts:
Administrative Contact:
(Contact for High Level Issues)
^ Receive Billing
^ Receive Acknowledgement
^ Receive Monthly Production Report
Name: Julie Interrante
Title: Customer Service Lead
PH: 714-573-3077
FX: 714-832-0825
Email: JInterrante@tustinca. ore
Secondary Administrative Contact:
(Contact for daily issues)
^ Receive Billing
^ Receive Acknowledgement
^ Receive Monthly Production Report
Accounts Payable Contact:
(Responsible for Accounts Payable)
^ Receive Billing
^ Receive Acknowledgement
^ Receive Monthly Production Report
Technical Contact:
(Responsible for Sending Accounts)
^ Receive Billing
^~Receive Acknowledgement
^ Receive Monthly Production Report
Name: Marie Parrett
Title: Accounting Specialist
PH: 714-573-3075
FX: 714-832-0825
Email: MParrett@tustinca.orQ
Name: Tami Berardi
Title: Accounting Specialist
PH: 714-573-3065
FX: 714-832-0825
Email: TBerardi@tustinca. orf;
Name: JL1 i a Interrante
Title: same as above
PH:
FX:
Email:
ONLINE Utility Exchange Collections rev. Aug 11, 2008