Title
Consider a memorandum/resolution awarding request for proposals #25-04, Delinquent Account Receivables Collection Services to McCreary, Veselka, Bragg & Allen, PC.
Body
DATE: February 18, 2025
TO: Kent Cagle, City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Request for Proposals - Delinquent Account Collection Services
BACKGROUND AND FINDINGS:
The City bills customers for money owed. If a bill is unpaid after the due date, additional payment due notices are sent. When a bill goes unpaid for a period greater than 90 days (120 days for emergency medical services) it is submitted to an outside collection agency. The agency continues collection efforts and charges the City a fee equal to a percentage of the amount collected on behalf of the City. The only exception is Municipal Court citations.
The current delinquent account collection services agreement has ended therefore the City issued a request for proposal (RFP 25-04) for delinquent account collection services on November 3, 2024.
On November 26, 2024, proposals were received from six (6) vendors. Staff evaluated the proposals using the following criteria:
1. Relevant experience and success in collecting accounts receivables for similar entities;
2. The experience, resources, and qualifications of the company or firm and individual assigned to this account;
3. Delinquent collection philosophy and strategy, to include fee assessment, and demonstrated performance including complaints filed by debtors pursuant to federal collection law;
4. Oral presentation on collection methodology and process
5. Ability to provide the necessary reporting on the progress of collection for all fines; and
6. Amount of assistance required from City staff.
After careful review of all the proposals, to include an interview with the top three evaluated firms, it was determined that McCreary, Veselka, Bragg & Allen, PC. would provide the best value to the City. The agreement is for five years, with the option to renew two additional one-year terms.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
Yes, this item conforms to City Policy.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
Collection services are expected to increase revenues through enhanced collection efforts for delinquent account receivables. McCreary, Veselka, Bragg & Allen, PC. will collect on accounts referred by the City. Amounts collected will be paid to the City, and the City will reimburse 25.0% of the amount collected to McCreary, Veselka, Bragg & Allen, PC for all delinquent accounts receivable. The estimated annual expense for delinquent account collection services is between $60,000 and $65,000.
For those Fines and Fees imposed against Adjudicated Offenses regardless of the date of the offense and against Unadjudicated Offenses that occurred on or after June 18, 2003, a fee of thirty percent (30%) of the amount of the Fines and Fees collected by the Court as provided by Article 103.0031 of the Code of Criminal Procedure.
Is this a one-time or recurring revenue/expenditure?
Payments to McCreary, Veselka, Bragg & Allen, PC. will be recurring.
Is this revenue/expenditure budgeted?
Yes, funds are budgeted for delinquent account collection services.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Yes, revenues will post to the associated budgeted revenue account based on the collected fee. Expenses are budgeted in the Collection Expense accounts as follows: General Fund (Accounting: 100-55850-160-162-000000 and Fire: 100-55850-250-252-000000) and Water and Sewer Fund (Utility Collections: 550-55850-160-166-000000).
RECOMMENDATION:
Staff recommends that the City Council award request for proposals # 25-04, Delinquent Account Receivables Collection Services to McCreary, Veselka, Bragg & Allen, PC and authorize the City Manager, or designee, to execute the agreement and any change orders or supplemental agreements within the amounts set by state and local law.
DEPARTMENTAL CLEARANCES:
Purchasing
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Evaluation Summary
Contract - Accounts Receivable
Contract - Municipal Court
Certificate of Interested Parties
Presentation