Report Prepared by: Michelle Zamudio, Revenue & Customer Service Supervisor, Finance Department
Title
SUBJECT: Approval of a Professional Service Agreement with Financial Credit Network (FCN) for Collections Services for a Term of Five Years with the Option to Extend for up to Two Additional One-Year Terms
REPORT IN BRIEF
Considers approving a Professional Service Agreement with Financial Credit Network for collection services for a term of five years with the option to extend for up to two additional one-year terms.
RECOMMENDATION
City Council - Adopt a motion approving a Professional Service agreement with Financial Credit Network and authorizing the City Manager or the Deputy City Manager to execute all necessary documents.
Body
ALTERNATIVES
1. Approve, as recommended; or
2. Refer matter back to staff for changes; or
3. Deny.
AUTHORITY
Chapter 3.04, Purchasing System, sets forth procedures for contracting for professional services.
CITY COUNCIL PRIORITIES
As provided in the proposed Fiscal Year 2021-2022 budget
DISCUSSION
Since Fiscal Year 2010-11 the City of Merced has contracted for collection services for delinquent account receivables that consist of fees or charges from animal control, airport services, rents, business license, utilities, administrative citations, various permits, checks returned for non-sufficient funds and other miscellaneous receivables.
The current contract is with FCN and expires December 20, 2021.
The Finance Department solicited proposals for collection services. Proposals were received from three vendors. The proposals were analyzed and ranked according to the evaluation criteria for technical qualifications and price. The technical qualifications include quality and completeness of proposal, overall experience and governmental experience.
|
Proposer |
Score |
|
Financial Credit Network |
96 |
|
ICS System |
86 |
|
Professional Credit |
85 |
Based on technical qualifications and price FCN has the highest score.
FCN has offices in Visalia and Grover Beach, California and has been in business for 67 years. They currently have 47 employees including 22 collectors. FCN has more than 600 clients including 71 cities and counties.
FCN uses a financial counseling approach to collections. Their philosophy includes treating the consumer with dignity and working with the consumer to establish a mutually agreeable plan of repayment.
FCN offers a web portal, predictive dialers, skip tracing, credit reporting and legal action. FCN provides services from their office in multiple languages, including Spanish, Hmong, Tagalog, Vietnamese, and Cantonese. In addition, they also have the capability of being linked with Transatlantic Translations Group (TTG) which is a 24/7 language line that assists the collection team with assisting customers in other languages.
FCN’s fees are contingent on revenue collected as follows:
15%-Primary Placement with 30 days
25%-Primary Placement after 30 days
35%-Court Action
The proposal includes a reduction to the fees from the current contract with FCN.
The Finance Department has worked with FCN for 10 years. FCN is always responsive and informative. As new legislation is issued regarding collection practices, FCN communicates any necessary changes in process in a timely manner. We have established a good working relationship and they are a good partner for the City.
IMPACT ON CITY RESOURCES
The Fiscal Year 201-22 Council adopted budget includes $30,000 for collection services. There is sufficient funding available to cover the fees and no additional appropriation is needed in this fiscal year. Collection fees for future fiscal years will be included in the annual budget process.
ATTACHMENTS
1. Professional Services Agreement with FCN