HomeMy WebLinkAbout12 - Professional Services Agreement for the Collection of Delinquent AccountsTO:
FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
May 14, 2019
Agenda Item No. 12
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Evelyn Tseng, Revenue Manager, etseng@newportbeachca.gov
PHONE: 949-644-3153
TITLE: Professional Services Agreement for the Collection of Delinquent
Accounts
ABSTRACT:
In order to enhance the City's revenue collections, the City requires professional
collection agency services to pursue unpaid and delinquent account receivables.
Following a Request for Proposals (RFP) selection process, staff recommends that the
City Council execute the Professional Services Agreement with Ray Klein, Inc., dba
Professional Credit Service, a Washington company (Contractor), for professional
services.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Authorize the Mayor to execute the attached Agreement in an amount not to exceed
$500,000 over a five-year term with Ray Klein, Inc., dba Professional Credit Service,
a Washington company, for professional services.
FUNDING REQUIREMENTS:
No budget amendment is required with this agreement. After sending delinquent
accounts to collection, the contractor receives a portion (18%) of the delinquent balances
recovered as an offset to the revenues collected.
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Professional Services Agreement for the Collection of Delinquent Accounts
May 14, 2019
Page 2
DISCUSSION:
The City bills for a wide variety of services, including but not limited to: utility bills, transient
occupancy tax, false alarm fines, miscellaneous permit fees, business license fees,
property damage, property rents, jail booking fees, fees associated with emergency
response, miscellaneous police fees, returned checks, special event fees and emergency
transportation fees. The City generally requires payment on the date due, which is
typically 30 days from the date of notice. Depending on the nature of the billing, there are
various levels of customer outreach before an account is sent to collections. For example,
utility customers are contacted no less than five times before water is shut-off. Further,
utility customers are not sent to collections unless the customer has closed the account
and has not paid the balance due for at least 90 days. Most other types of general billings
receive monthly reminders but are then sent to collections after 90 days.
The Finance Department conducted a Request for Proposal (RFP) for collections
services. The RFP was published using the City's on-line bidding site, Planet Bids. Nine
proposals were received, reviewed and scored by an evaluation panel comprised of staff
from the Finance and Fire Departments. Selection criteria included the firm's
qualifications, experience, fees, references, services and ability to meet the City's needs
with regard to collections and customer service.
Of the nine proposals, the evaluation panel identified and scored five as possessing the
requisite technical expertise, relevant experience and qualifications to be considered for
award. The evaluation panel invited these five proposers to an interview where each
group was given an opportunity to describe their qualifications and experience. Following
this first interview, the panel removed two from further award consideration. The three
remaining finalists were invited to a second panel interview where each proposer was
asked to provide detail about their collections methodology and provide a demonstration
of their collections system and software. Both interviews were scored by the evaluation
panel and the scores were incorporated into the overall evaluation process.
Concurrently, the City's Purchasing staff compared the pricing received from each finalist
and compared the pricing based on the proposed service fee. The proposed service
charge percentage for each finalist, as well as the results of the proposal review and
interviews are shown in the following table:
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Penn Credit
Professional
States
Corp.
Credit
Recovery
Service
Systems
Proposal
76.67
83.11
65.56
Score
First
78.00
82.67
76.33
Interview
Score
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Professional Services Agreement for the Collection of Delinquent Accounts
May 14, 2019
Page 3
Second
66.67
71.33
62.33
Interview
Score
Cost Score
72.00
100.00
90.00
(Proposed
(25%)
(18%)
(20%)
Service
Charge %)
Total Score
293.34
337.11
294.22
Based on a comprehensive review by the evaluation panel, Professional Credit Service
was unanimously recommended for collections services. The selection was based on the
professional quality of the organization, commitment to customer service, willingness to
customize services required by the City and competitive pricing for the collection services.
The contractor also provides collection services for the City of Anaheim and City of
Garden Grove.
Staff is requesting a five (5) year agreement, which would terminate the agreement on
May 31, 2024. The City bills for approximately $105 million for various services annually,
and staff estimates that each year, approximately $1,250,000 may become uncollectible
prior to collection agency efforts. Some services (e.g., emergency medical and jail
booking) are harder to collect on than others, such as utility billing. City staff and the
contractor estimate a collection rate on uncollectible balances that range from 10% to
42% depending on the type of incident/service, which could result in annual Contractor
fees of approximately $94,500 ($1,250,000 x 42% optimistic collection rate x 18%
contractor fee) annually on the high end.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Professional Services Agreement
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH RAY KLEIN, INC. DBA PROFESSIONAL CREDIT SERVICE FOR
DELINQUENT ACCOUNT COLLECTIONS SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 14th day of May, 2019 ("Effective Date"), by and between the CITY
OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and
RAY KLEIN, INC., a Washington corporation doing business as ("DBA") Professional
Credit Service ("Consultant"), whose address is 12204 SE Mill Plain Blvd., Suite 101,
Vancouver, Washington 98684, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide delinquent account collections
services ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on May 31, 2024, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work")_ City may elect to delete certain Services within the Scope of Services at its
sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A. In the absence of a specific schedule, the Services shall be performed to
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completion in a diligent and timely manner. The failure by Consultant to strictly adhere to
the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely
manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Schedule of Billing
Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's
compensation for all Work performed in accordance with this Agreement, including all
reimbursable items and subconsultant fees, shall not exceed Five Hundred Thousand
Dollars and 001100 ($500,000.00), without prior written authorization from City. No billing
rate changes shall be made during the term of this Agreement without the prior written
approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the dates of service, a
brief description of the Services performed, and the total amount requested. Consultant
shall also provide detailed reports, in addition to the monthly invoice, such as, a monthly
cash receipt report, or alternate reports as requested by City, showing the amount, date,
and organization paid, by debtor. City shall pay Consultant no later than thirty (30)
calendar days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement or specifically approved in writing in advance by
City.
4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Ray Klein, Inc. DBA Professional Credit Service Page 2
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Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Rob Nestell to be its Project
Manager. Consultant shall not remove or reassign the Project Manager or any personnel
listed in Exhibit A or assign any new or replacement personnel to the Project without the
prior written consent of City. City's approval shall not be unreasonably withheld with
respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Finance Department. City's Revenue
Manager or designee shall be the Project Administrator and shall have the authority to
act for City under this Agreement. The Project Administrator shall represent City in all
matters pertaining to the Services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
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8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate
(directly or indirectly) to any breach of the terms and conditions of this Agreement, any
Work performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City_ Consultant
Ray Klein, Inc. DBA Professional Credit Service Page 4
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shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this Agreement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
Ray Klein, Inc. DBA Professional Credit Service Page 5
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16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise required by law. City is an intended beneficiary of any Work
performed by the subcontractor for purposes of establishing a duty of care between the
subcontractor and City. Except as specifically authorized herein, the Services to be
provided under this Agreement shall not be otherwise assigned, transferred, contracted
or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole right to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
iE-Joil«ZoI:I;1U]=I.111I,1411 VA
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept confidential
unless City expressly authorizes in writing the release of information.
Ray Klein, Inc. DBA Professional Credit Service Page 6
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19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3) years,
or for any longer period required by law, from the date of final payment to Consultant
under this Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make transcripts or
copies of such records and invoices during regular business hours. Consultant shall allow
inspection of all Work, data, Documents, proceedings and activities related to the
Agreement for a period of three (3) years from the date of final payment to Consultant
under this Agreement.
21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction of
the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall not
discontinue Work as a result of such withholding. Consultant shall have an immediate
right to appeal to the City Manager or designee with respect to such disputed sums.
Consultant shall be entitled to receive interest on any withheld sums at the rate of return
that City earned on its investments during the time period, from the date of withholding of
any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by Consultant,
the additional design, construction and/or restoration expense shall be borne by
Consultant. Nothing in this Section is intended to limit City's rights under the law or any
other sections of this Agreement.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
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24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et
seq., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seq., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at-
Attn: Revenue Manager
Finance Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Rob Nestell
Ray Klein, Inc. dba Professional Credit Service
400 International Way, Suite 200
Springfield, OR 97477
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
Ray Klein, Inc. DBA Professional Credit Service Page 8
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identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
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28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: 5. 2 • I °t
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By: ( qr) By:
A ron C. Harp I S,1,• Diane B. Dixon
City Attorney Mayor
ATTEST:
Date:
Leilani I. Brown
City Clerk
CONSULTANT: RAY KLEIN, INC., a
Washington corporation doing business as
("DBA") PROFESSIONAL CREDIT
SERVICE
Date_
By:
G. Scott Purcell
Chief Executive Officer
Date:
Joseph R. Hawes
Chief Financial Officer
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Ray Klein, Inc. DBA Professional Credit Service Page 11
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EXHIBIT A
SCOPE OF SERVICES
City shall designate debts for collection by Consultant in City's sole discretion.
Consultant's services shall include:
1. Reviewing, enforcing and complying with the applicable provisions of the City's
municipal code and ordinances;
2. Providing acknowledgement to City of accounts placed with Consultant within ten
(10) business days of placement;
3. Making contacts with debtors under the Consultant's name;
4. Mailing collection letters as approved by the City;
5. Employing skip -tracing and other standard techniques to locate debtors, and
providing corrected addresses and other account information to the City;
6. Combining assigned accounts to common debtors for consolidated collection
purposes;
7. Providing a Customer Service Call Center with a toll free number to assist debtors
in resolving their accounts, with Consultant's employees interacting with debtors
in a professional and respectful manner during all deliberations and dealings;
8. Forwarding valid disputes to the City for review and possible dismissal as
necessary;
9. Establishing payment plans as necessary, in accordance with parameters set by
the City for Consultant to accept payment plans;
10. Transferring funds electronically and be able to receive accounts on a daily basis,
Monday through Friday;
11. Providing a remittance processing center to receive debtor payments and deposit
into City account;
12. Depositing all collected funds within forty-eight (48) hours of receipt to City
designated bank account;
13. Providing Social Security numbers on accounts obtained by Consultant, as
necessary, where authorized by applicable law;
14. Adjusting the receivable record within forty-eight (48) hours of any information
transferred by City;
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15. Reporting outstanding receivables, where authorized by law, to a nationally
available credit history reporting database (credit bureau) at no additional fee to
City;
16. Reporting delinquent accounts to the three major credit bureaus, when permitted
by law and in accordance with criteria that may be set by the City, at no additional
cost to the City, including updates of previously reported information and
corrections to reported information;
17. Providing management reports in electronic and hardcopy format (pdf and
excel/csv), on a daily, weekly, or monthly basis, as directed by the City, including
but not necessarily limited to:
17.1. Monthly cash receipt file and report — a listing of all payments by debtor
name (last name first), designated City account reference number, amount
owed, date paid, payment amount, and such other information as City may
request;
17.2. Monthly new accounts acknowledgement report — listing of debtors, with
City's account reference number, amount and total number and dollar value
of accounts referred,
17.3. Monthly spreadsheet detailing the current status of each account, including
a brief recap of Consultant's efforts to collect the funds;
17.4. Monthly performance analysis report — the liquidation rate of all accounts,
including monthly collection total, collections to date, account referral to
date, fees earned by Consultant and gross funds returned to the City,
including but not limited to, monthly recovery rate per referral and
accumulative totals of recovery on a monthly and ongoing basis, and track
revenue received by referred month as well as by month paid;
18. Working with City to implement collection programs for other types of debt, as
needed;
19. Providing a website portal for City staff to review the status and history of accounts
in collections in real time, including but not limited to, bifurcating HIPAA protected
accounts as directed by City;
20. Providing a dedicated staff liaison to the City who will be the City's primary contact
with the Consultant;
21. Acknowledgement that Consultant shall not have full rights to the accounts and
shall only be able to pursue collections on the City's behalf;
22. Acknowledgement that Consultant shall not have authority to accept a compromise
settlement on any account without the written consent of the City;
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23. Acknowledgement that Consultant shall maintain accurate records of all
transactions, and that the City shall perform periodic audits to ensure that all
amounts collected are accurately reported and remitted;
24. Acknowledgement that, where authorized by law, City shall add Consultant's fee
to the unpaid debt prior to forwarding to Consultant;
25. Cease work on, and return all documentation pertaining to, any account previously
assigned by the City when requested by the City;
26. Using due diligence and employing such lawful means, methods, and procedures
as Consultant, in its judgment, discretion, and experience, believe will best effect
the collection of accounts, including but not limited to, collection letters, telephone
calls, adequate periodic follow up attempts and skip tracing;
27. Providing debtors with reasonable options to make payments, including for
example, checking accounts, credit cards, debit cards, secured payment websites,
pay by telephone, and a lockbox or other physical location to accept mailed
payments;
28. Participating in the State of California's Interagency Intercept Collection Program
on the City's behalf when requested by City, to assign, follow up, update, or remove
accounts for payment in accordance with the Interagency Intercept Collection
Program;
29. Communicating with City personnel as needed to (i) request supporting
documentation to assist in carrying out the services to be provided under the
Agreement, (ii) report any issues or other information that the City should be made
aware of, and (iii) discuss any topic Consultant believes is prudent;
30. Ensuring funds collected on the City's behalf are placed in a secure account and
deposited in a timely manner;
31. Providing City with a periodic list of recommended accounts for forwarding to
attorneys for legal collections, including when Consultant determines that a debtor
has adequate assets, employment, and/or other resources by which to pay a debt
but has not satisfactorily cooperated to make payment or abide by a mutual
payment agreement;
32. Providing legal collection services, upon the prior express written consent of the
City, and at no additional cost to the City, such as filing civil lawsuits, recording
civil judgments or other records, debtor examinations, enforcement of civil
judgments, including but not limited to, service of process, legal fees, and any other
costs;
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33. Acknowledgement that the City reserves the right to select, at no cost to
Consultant, City legal counsel to provide legal collection services, such as filing
civil lawsuits, recording of civil judgments, and enforcement of civil judgments, at
the sole discretion of the City;
34. Requesting written approval from the City prior to filing any legal action in the
rendition of the services under this Agreement;
35. Complying with the California Rosenthal Fair Debt Collection Practices Act, Cal.
Civ. Code §§ 1788 et seq.;
36. Complying with the Fair Credit Reporting Act, 15 USC §§ 1681 et seq.;
37. Complying with the California Consumer Credit Reporting Agencies Act, Civ. Code
§§ 1785.1 et seq.;
38. Complying with the Service members Civil Relief Act, 50 USC §§ 3901 et seq.;
39. Complying with the Telephone Consumer Protection Act, 47 USC §227 et seq.;
40. Complying with the Health Insurance Portability and Accountability Act (HIPAA),
45 C.F.R. § 164.512 et seq., and the Confidentiality of Medical Information Act,
Cal. Civ. Code §§ 56 et seq., and all other laws, rules, and regulations applicable
to the confidentiality of patient medical information, including where necessary,
entering into a Business Associate Agreement with the City for protection of
confidential patient medical information;
41. Complying with the City's Municipal Code, and all other laws, rules, or regulations
applicable to the Services to be performed pursuant to this Agreement; and
42. Ensuring legal compliance in the collection of the City's debt, including but not
limited to, advising the City on recommended policies, programs and procedures.
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EXHIBIT B
SCHEDULE OF BILLING RATES
All amounts to be collected by Consultant on behalf of the City pursuant to this
Agreement shall be determined by the City in its sole and absolute discretion. Consultant
shall not increase any amount to be collected without prior written approval of the City.
Consultant shall charge the City a flat fee of eighteen percent (18%) of either.. the
amount successfully collected by Consultant OR the amount of the original debt,
whichever is lesser. This shall be the only compensation to Consultant for all Work
performed in accordance with this Agreement, including all reimbursable items and any
other costs and fees whatsoever.
In the event that the City requests Consultant cease to collect a debt under legal
action, Consultant may charge the City the costs Consultant has incurred up to but not to
exceed 25% of the original debt. The City may request Consultant cease to collect a debt
not under legal action at any time, at no cost to the City.
Costs of collection shall only be added to any debt in the City's sole and absolute
discretion, where authorized by law, in an amount approved by the City, and upon the
prior written approval of the City. Consultant's fee shall be based on the amount of the
debt before costs of collection are added.
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EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
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D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and two million dollars
($2,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement and
Consultant agrees to maintain continuous coverage through a period no
less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers
and employees or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements to waive their
right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, and shall require similar written express waivers from
each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers
and employees shall be included as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
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B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
E. Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
G. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
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