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HomeMy WebLinkAboutMINUTES - 06181985 - 1.55 Iro: BOARD OF SUPERVISORS ra FROM: Phil Batchelor, County Administrator By: Vosh Murakawa, Office of Revenue Collection Costa DATE: June 6, 1985 40 coq "7 SUBJECT: Contracts with Commercial Collection Agencies to Service Selected County Accounts SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION I . RECOMMENDED ACTION (A) Approve, authorize the Chair .of the Board to execute on behalf of the County, a contingency contract withcFer West Collection Services, Inc. , Walnut Creek in the amount of 40% of gross collections as defined in Service Plan and Special Conditions for the period of July 1 , 1985--June 30, 1987 for the provision of providing selected collection services to the County. (B) Approve, authorize the Chair of the Board to execute on behalf of the County, a c©n i-nge gFycontract with Pay oc GeneraEXm—!�rican Credits (.Me'r=chant-s-_Cuilection Akssociatio Oakland in the amount—of 37%of gross collections as defined—in the c::Se-Fv-i-c Flan and Special Conditions for the period of July 1 , 1985--June 30, 1987 for the provision of providing selected collection services to the County. II . F I NANC I AL 'I MPACT These contracts for collection services are requested to service delinquent accounts in all County departments. At the present time, it is estimated that 98% of the designated accounts receivables placed with the commercial collection agencies will originate from the Health Services Department. Use of these agencies will generate needed revenues. The contracts requested are contingency contracts and no direct County funds will be expended unless the agencies successfully collect on the accounts assigned. III . REASONS FOR RECOMMENDATION„ Approval of these contracts will allow the County to assign delinquent bills with the two recommended collection agencies, selected because of their performance records. The Health Services Department currently has approximately $5,000,000 in delinquent hospital bills that are ready for assignment to one or both of these agencies. Other departments are also in need of commercial collections services. Two agencies are being recommended for contract to provide greater flexibility and a basis for comparative analysis of performance. It is anticipated the competition should increase collections. IV. BACKGROUND On March 1 , 1985, bids for providing collection services to the County were solicited from seventeen collection agencies. On March 26, 1985, the Board of Supervisors publicly opened bids from six agencies, and on the recommendation of this Office, the Board referred the proposals to the Office of Revenue Collection for analysis and recommendation on which agency, or agencies, should be selected. ' CONTINUED ON ATTACHMENT: x Y[S SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECO14MEIKATION Or BOARD COMMITT[[ APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON une APPROVED AS RECOMMENDED X _ OTHER VOTE OF SUPERVISORS X UNANIMOUS (ABSENT --- ) i HEREBY CERTIFY THAT THIS IS A TRUE AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. CCI County Administratot ATTESTED Tirnp 1 R , L�5 Auditor-Controller J.R. OLSSON. COUNTY CLERK Office of Revenue Collections AND EX OFFICIO CLERK OF THE BOARD Contractor via Revenue Collections MS62/7.42 BY DEPUTY TO: BOARD OF SUPERVISORS Contra FROM: Costa DATE: County SUBJECT: SPECIFIC REQUEST(i) OR RECOMMENDATIONS) Ik BACKGROUND AND JUSTIFICATION Subsequently, several meeting's on this subject were held with representatives from the Health Services Department, the Auditor-Controller, and the Office of Revenue Collections in attendance to review the proposals and discuss the selection process. In addition, pertinent discussion on the role of the Office of Revenue Collection in relation to all County collection matters transpired, with agreement that the Office of Revenue Collection would become directly involved in County collection efforts, prior to outside assignment, when the new county collections unit was operationally able to do so. Additional time was required to carry out an acceptable analysis of the bidding agencies by the Office of Revenue Collection, and the existing contract with Far West Collection Services, Inc. , was extended to June 30, 1985. The six proposals were analyzed against one another using comparable statistical and other data. As the first discriminator, all firms were examined for compati- bility between the type of collection work they currently performed and the type of collections work required by the County. Two firms were eliminated by the first screening due to incompatibility (one firm was primarily involved with collection of large accounts for commercial bank card and credit institutions, and the second in collecting against trucking and industrial firms). A third agency was eliminated - as it was adjudged to be too small for the projected amount and type of work. The remaining three firms were deemed suitable for contracts; however, it was jointly decided that the County should contract with the two top candidates, not eliminating the possibility of contracting with more should the need arise, as there is additional staff assignment and start-up time required with each new additional agency. The recommended firms were selected after analysis and contact with references, and are listed in order of priority: (1) Far West Collection Services' , Inc.--this agency is currently on contract with Contra Costa County. It is familiar with our clientele, our methods and procedures. We have been satisfied with their service, and there was agreement amongst repre- sentatives that continued contract with this agency would ensure continued service without interruption in collections and the necessity of a new "start-up" time factor. The analysis conducted by the Office of Revenue Collection showed that Far West rated high on the "Net Return to County" scale. (2) Payco-General American Credits--this is the largest collection agency in the country and operates on a nationwide scale with 1900 employees. Our analysis showed that this agency produces a good percentage rate of return on dollars assigned. References verified our analysis and also reported that this is an agency with which it is easy to work. Payco rated high on our "Net Return to County'" scale. TO: BOARD OF SUPERVISORS Contra FKOM: Costa DATE: Courly SUBJECT: SPECIFIC REQUEST(SR OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION This is a joint recommendation made by the Office of the County Administrator, the Auditor-Controller, and the Health Services Department. The contracts have been reviewed by County Counsel 's Office. V. CONSEQUENCES OF NEGATIVE ACTION: Failure to approve the recommended action would result in the County not having a collection agency to which delinquent bills could be assigned effective June 30, 1985. A delay in assigning current delinquent accounts reduces the probability of successful contact and collections, causing a loss of net County revenues.