Exh 8DAGENDA ITEM #8D
MAY 29, 2001
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Authorize the City Manager to Sign a Contract with
M.J. Altman Companies, Inc. to Provide Collection
Services for the City
SUBMITTED BY: Jim Hanson, City Manager
DATE: May 21, 2001
BACKGROUND:
The City Commission authorized the City Manager to negotiate a contract with M.J. Altman,
Inc. to provide collection services for the City at the City Commission meeting held Apri19, 2001.
A contract has been negotiated and attached for the City Commission to review. Request is now
being made to authorize the City Manager to sign the contract.
BUDGET:
No budgetary impact. Utilityrevenuesnre 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. $ad 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 chazged 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 Manger to sign the submitted contract with M.J. Altman, Inc. to provide
collection services for the City.
ATTACHMENTS:
Contract with M.J. Altman, Inc.
AGENDA ITEM #8D
MAY 29, 2001
PROPOSAL APPROACH /SERVICES
(RETAIL /COMMERCIAL)
MJ Altman Companies, Inc. is proposing to offer collection services to City of Atlantic Beach
based on the following procedures.
1) Upon placement, MJ Altman will immediately generate a FIRST notice. This notice is
intended to generate payment activity and allow any disputes to be processed prior to collection
activity. If an account is disputed by a consumer, MJ Altman will contact the City to obtain an
Itemized Statement of the account.
2) On the 15~' day after FIRST NOTICE generation, MJ Altman professional collectors will
begin telephone collections. Upon first contact, collectors aze attempting to secure payment or
promise of payment in full for a point in the future. Realizing that all consumers are not able to pay
accounts in full, terms, based on dollaz amount of account and ability of consumer to pay, may be
offered by the collector. Collectors also have ability to accept Mastercard and Visa at no additional
charge to the client. All consumers are instructed to make payments directly to MJ Altman.
3) On accounts where phone contacts aze not possible, the collector has the availability to
send motivating notices to the consumer.
4} Monthly accounting and trust is reconciled by the 20t° of subsequent months. MJ
Altman will produce an Alpha statement reflecting all transactions on client accounts. The statement
will be net remit, with fees due MJ Altman retained and balance sent to client withing ten (10)
business days. Fees due MJ Altman aze requested to be remitted within fifteen (I S) days from date
of statement.
5) Legal Accounts: MJ Altman offers a full service legal department using the recently
passed assignment law. MJ Altman may represent the account in small claims court. Once a
consumer has been determined to have the ability, but not the willingness to pay the account, MJ
Altman will recommend legal action via the assignment law. We have set our guidelines to pursue
only those accounts in excess of $300 and require clients to pay up-front 5% of the balance or $125
(whichever is greater) non-refundable suit plus court costs. If MJ Altman determines that there is
a reasonable opportunity to recover assets, they will advise the client. The City will then make the
decision whether or not to proceed, based on the advanced court and legal costs to be incurred.
6) Skip Tracing: Skip Tracing is used for mail returns, no phones, and non-locates. MJA
has installed a new system called the "Locator". This system is an on-line 386 computer which uses
the newest technology of the CD-ROM, which contains all directory white page listings in the State
of Florida. New CD-ROMs are updated and received by our company every ninety (90) days. The
collector also has the availability to use city directories, cross references, credit bureau reports, state
motor vehicle records, etc., to help locate skip accounts.
AGENDA ITEM #8D
MAY 29, 2001
7) Credit Reporting Agencies: After forty-five (45) days of collection efforts, and while
MJ Altman continues our attempts to collect, we will list all unpaid account information with the
three (3) national credit reporting agencies, including Equifax. If an account is erroneously placed,
MJ Altman will contact the credit agencies immediately to correct the error.
8) Recalled or Canceled Accounts:. The client may recall or cancel accounts at any time
by telephone, fax or mail. These items will appear on the monthly payment statement without a
commission due.
9) MJ Altman will comply with the Fair Debt Collection Practices Act (95-109); account
handling and collection methods will be adhered to; account information will be placed; and, reports
will be received as outlined in the Request for Proposal -Collection of Delinquent Accounts and
submitted by MJ Altman Companies, Inc., dated February 27, 2001.
10) In accordance with the information the City provided, MJ Altman will provide the
above services based on the following fee schedule.
FIRST PLACEMENT ACCOUNTS
RETAIL:
A thirty-five (35) percent contingency fee will prevail on all accounts collected
regardless of age. MJ Altman will work all accounts with balances of $25.00 and
above.
LEGAL PROCESS ACCOUNTS
A forty (40) percent contingency fee will prevail on all accounts. We have set our
guidelines to pursue only those accounts in excess of $300 and require clients to
pay up-front 5% of the balance or $125 (whichever is greater) non-refundable suit
plus courts costs.
11) Assignrnent: This Agreement may not be assigned by either party, except with the
prior written consent of the other party. MJ Altman agrees that it will notify the City of any changes
in ownership of MJ Altman Companies, Inc. within a reasonable time after such change.
12) Termination: The City may terminate this Agreement at any time upon giving MJ
Altman Companies, Inc. written notice of termination at least thirty (30) days prior to the effective
date of such termination. MJ Altman may terminate this Agreement upon giving the City written
notice of termination, at least sixty (60) days prior to the effective date of such termination. In the
event of termination and within a reasonable time after the effective date of such termination, MJ
Altman shall render the city a final accounting of its transactions. The termination of this Agreement
shall not affect or preclude the consummation of any transactions, .which were initiated by MJ
Altman prior to the effective date of such termination.
AGENDA ITEM #8D
MAY 29, 2001
The information and documentation provided in this packet is proprietary and cannot be
reproduced or disseminated without written approval of MJ Altman Companies, Inc.
This proposal is considered a CONTRACT FOR SERVICES when both parties affix their
signatures and date below.
CITY OF ATLANTIC BEACH MJ ATLMAN COMPANIES, INC.
DATE: DATE:
BY:
TITLE:
JC