Exh 8DAGENDA ITEM #8D
APRIL 9, 2001
CITY OF ATLANTIC BEACH
CITY COMMISSIONER MEETING
STAFF REPORT
ITEM: Collection Agency - RFP Recommendatior~
SUBMITTED BY: Jeri Benjamin, Deputy Finance Director
DATE: Apri12, 2001
BACKGROUND: External collection assistance is needed to supplement the City's in-
housecollection efforts. This assistance will: 1) help reduce bad debt
by utilizing collection. tools not readily available to City staff, and 2)
provide additional, dedicated resources to work delinquent accounts
in a timely manner to maximize the amount collected.
An RFP to hire a collection agency or law firm specializing in
collection services to collect delinquent accounts on behalf ofthe City
was mailed to seventeen (17) companies and advertised in the
newspaper. Five (5) proposals were received. The Finance Director,
Deputy Finance Director and Customer Service Supervisor evaluated
and ranked the proposals. Factors used in ranking the proposals in
order of weight were: 1) collecfion methods; 2) experience with local
governments; 3) fees; 4) staff experience and training; and, 5) length
of time in business. Questions were followed up with the proposers
and reference checks on the top agency were conducted by the
Customer Service Supervisor.
The top-ranked firm, MJ Altman Companies, Inc., has a number of
years experience in the industry, extensive experience with
government clients, and a stable fee structure. Other clients our
relative size that aze serviced by MJ Altman Companies include the
City of Neptune Beach, the City of Eustis and the City of Sebring.
They also provide services to the City of Jacksonville Beach.
AGENDA ITEM #8D
APRIL 9, 2001
FUNDING: No budgetary impact. Utility revenues are recorded when services are
billed. Collection fees aze deducted from payments received on
delinquent accounts handled by the collection agency. The net
amount is then forwarded to the City. An allowance for bad debt is
recorded annually for financial statement purposes. Bad debt, anon-
cash, non-budgeted expense, would therefore be reduced by the
amount of net collections received via the collection agency. For
example, a $100 delinquent account would be charged as bad debt at
$100. Successful collection with a 35% collection fee would net the
City $65, reducing bad debt expense. by the $65 collected. Without
external collection efforts, the full $100 would remain as bad debt
expense. -
RECOMMENDATION: Authorize the City Manager to negotiate a contract with the top
ranked agency, MJ Altman Companies, Inc., to provide collection
services to the City of Atlantic Beach.
CITY MANAGER:
AGENDA ITEM #8D
APRIL 9, 2001
Ciry of Atlantic Beach
RFP 0001-0
Collection Agency Services
Evaluation
Weightetl Scores
Proposals Received From:
1) Collection Methotls
2) Experience with Local
Governments
3) Fees
4) Staff Experience/
Qualifwtions!
Training antl
Availability
5) Experience/Length of
Time in Business
Tota
Rankinr
Credit
Collection Diversifetl Accelerated Rapid
Services Consultants, Receivables MJAltman Recovery
Gtoup Florida, Inc. ~ Management, Companies. & Professional
Inc. (Jacksonville Inc. Inc. Billing, Inc.
..nf ~r~be....etl~m ((lcala\ /Ff Mvwrwl
2.80 3.50 1.40 3.65 2.10
0.00 0.00 0.00 3.60 0.90
3.40 3.80 3.00 2.60 2.20
1.ao o.ao o.eo 1.0o a.ao
0.40 0.45 0.30 0.60 0.60
7.60 7.95 5.50 11.65 8.60
3 2 5 1 4
Rating
Weight
0.35
0.30
Comments:
Accounts Worked All >$10.00 All ' >=$25.00 All
Period B4 Listin w/Credit Re ortin Servic 60 Da Varied 90 Da s 45 Da s 60 Da s
Number of Em to ees 14 DK 6 42 15
Number of Collectors 12 DK DK 37 9
Automated Dialer Yes Yes No Yes Yes
Years in Business 5 9 4 73 24
Number of Clients 300+ DK 100+ 1400 DK
Number of Government Clients 0 0 0 5+ 2
Fees 24-33% 25 % Prima 30%NOn-Le a l 35%NOn-Le a l 26%>$700
Placement 30 % Legal 40 % Legal 50% <_ $100
0.20
0.10
0.05
7.00
DK -Don't know
Balances <$50.00 - 1 Letter and 1 Call only, principal is attorney and referrals in states