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HomeMy WebLinkAbout09543 ORDINANCE NO. 9543 AN ORDINANCE APPROVING A CONTRACT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND INTEGRAL RECOVERIES, INC., A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF COLORADO RELATING TO COLLECTIONS OF OUTSTANDING FINES AND FEES OWED TO THE MUNICIPAL COURT BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The attached Agreement for Collection Services, between the City of Pueblo, a Colorado municipal corporation and Integral Recoveries, Inc. a private corporation, having been approved as to form by the City Attorney, is hereby approved. The Mayor is authorized to execute and deliver said contract in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 2. The officers and staff of the City are authorized and directed to perform any and all acts consistent with this Ordinance the attached contract which are necessary or desirable to implement the transactions described therein. SECTION 3. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on August 26, 2019 . Final adoption of Ordinance by City Council on September 9, 2019 . President of City Council Action by the Mayor: ☒ Approved on September 13, 2019 . □ Disapproved on based on the following objections: Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST City Clerk City Clerk’s Office Item # R-9 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: August 26, 2019 TO: President Dennis E. Flores and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Brenda Armijo, City Clerk FROM: Carla Sikes, Municipal Court Judge SUBJECT: AN ORDINANCE APPROVING A CONTRACT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND INTEGRAL RECOVERIES, INC., A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF COLORADO RELATING TO COLLECTIONS OF OUTSTANDING FINES AND FEES OWED TO THE MUNICIPAL COURT SUMMARY: Attached is an agreement (“Agreement”) between the City of Pueblo (“City”) and Integral Recoveries, Inc. (“Agency”). This Agreement authorizes Agency to provide collection services to the Municipal Court. PREVIOUS COUNCIL ACTION: In May of 2013 City Council passed an ordinance allowing the Finance Department to send unpaid debts owed to the City to a third-party collections agency, as codified in Section 1-2-10. In September of 2013 the City entered into an agreement with the State of Colorado Central Collection Services (CCCS) wherein, CCCS agreed to provide the City with collection services. BACKGROUND: The Municipal Court currently has $8,720,482.46 in unpaid fines, fees, and costs. Of that amount, $4,603,024.19 has been referred to CCCS. $4,157,292.60 of the amount referred to CCCS remains outstanding. This Agreement would not terminate the City’s relationship with CCCS but it would give municipal court another option for seeking collection of unpaid fines, fees and costs. FINANCIAL IMPLICATIONS: This Agreement will not cost the City any money. The Agency is allowed to recover collection fees on collected funds as payment for their collection services. However, those fees will be collected by Agency directly from the debtor. BOARD/COMMISSION RECOMMENDATION: Not applicable. STAKEHOLDER PROCESS: Not applicable. ALTERNATIVES: If this Ordinance is not approved, Municipal Court will only have one option for collection of outstanding fines, fees, and costs. As is the case now 100% of collection referrals would go to CCCS. RECOMMENDATION: Approve the Ordinance. Attachments: Proposed Ordinance; Proposed Agreement COLLECTION SERVICES AGREEMENT THIS COLLECTION SERVICES AGREEMENT ("Agreement") is entered into this 9 day of Str4c ,Err, 2019 ("Effective Date"), by The City of Pueblo on behalf of the Municipal Court of the City of Pueblo ("Municipal Court"), and Integral Recoveries,Inc., a corporation organized under the laws of the State of Colorado("Agency"). WHEREAS Agency is a Colorado-licensed collection agency in good standing with no administrative actions or complaints of record; WHEREAS Municipal Court is a judicial subdivision of a Colorado home-rule municipality with full legal authority to enter into and make binding this Agreement; and WHEREAS Agency has been vetted and retained by Colorado Judicial Districts under the current Judicial Master Agreement dated August 12, 2015, and is in good standing thereunder, now, therefor The parties agree as follows: 1. Scope of Services Agency will provide Municipal Court with collection services consisting of Agency's normal collection activities, including, without limitation, correspondence and communications between Agency and the debtor, as deemed appropriate by Agency and agreed to by Municipal Court. Agency will provide services as an independent contractor and not as an employee of Municipal Court. Services will commence immediately upon Municipal Court's assignment of a debtor's account ("Account") to Agency. This agreement is non-exclusive and the Municipal Court may use other venders for the same or similar services described herein. 2. Recovery and Agency Fee. The Account will specify the Judgment Amount(the amount due the court for fines, fees, costs, surcharges and restitution plus a 25% collection fee). Agency may seek to recover and may recover from the debtor an amount not greater than one hundred twenty-five percent of the Judgment Amount and retain 20% as its fee on any and all payments. Municipal Court will direct Defendants to pay Agency directly. 3. Term. This Agreement will commence on the Effective Date and will continue under the terms of this Agreement. However, either party may terminate this Agreement by giving thirty days' written notice. Upon expiration of the Term or termination by notice, the parties may agree that Agency may continue collecting on those Accounts previously assigned to Agency under the same terms as set forth in this Agreement until those Accounts are closed or are cancelled. 4. Manner of Assignment. Assignment of an Account will be effective as the date Municipal Court submits the Account to Agency. Within fifteen working days of Agency's receipt of an assignment, Agency must submit a written acknowledgment of assignment to Municipal Court. If Municipal Court does not receive the acknowledgment within that fifteen day period, Municipal Court may withdraw that Account from Agency. After an assignment of an Account to Agency, Municipal Court will refrain from contacting the debtor for collection purposes and will refer all matters concerning collection to Agency for the duration of the period of assignment, unless Municipal Court cancels the Account as provided below. 5. Cancellation of Accounts. Accounts previously assigned to Agency for collection will be cancelled prior to the expiration of the period of collection if: (a) Municipal Court withdraws an Account, by notice to Agency in writing; (b) Agency ceases collection efforts on an Account it considers not collectable; or (c) the debtor files for bankruptcy and Municipal Court directs Agency to take no further action after Agency informs Municipal Court and the Office of the City Attorney, in writing, of the filing for bankruptcy. An account cannot be cancelled if payment is received by Municipal Court unless Agency receives its portion as states in paragraph 2. of this Agreement. 6. Standards of Agency Performance. Agency agrees to maintain the following minimum standards of operation and performance during the term of this Agreement and to provide proof of compliance upon request by Municipal Court: a. Maintain proper licensing and bonding as required by law b. Adhere to the provisions of all applicable laws and regulations, including the Federal Fair Debt Collection Practices Act and the Fair Credit Reporting Act. 7. Audits. Municipal Court has the right to audit the accounts assigned to Agency at any time upon 3 days advance written notice. 8. Litigation. No court action will be instituted for collection of Accounts by Agency without prior written authorization from Municipal Court. Should Agency institute any court action without prior written authorization from the Municipal Court Agency will forfeit Agency's fee on any accounts involved in the said court action. 9. Progress Reports. Agency will provide Municipal Court with written reports relating to collection activities, collection totals, dates of collection, and specific accounts when requested by Municipal Court. 10. Payment Remittance. By the 15th day of each month, Agency will provide Municipal Court with a statement of amounts collected during the previous month along with a check or ACH payment representing the Municipal Courts portion pursuant to paragraph 2. of this Agreement. The statement will identify each account by case number, Defendant name, date of payment, amount of payment, Municipal Courts portion of payment, and Agency's portion of payment. 11. Governing Law: Venue. This Agreement will be construed in accordance with the laws of the State of Colorado, the Pueblo City Charter, City Code, and City Ordinances, Rules, and Regulations. 12. Indemnification. Agency releases the City of Pueblo and will fully protect, defend, indemnify, and hold harmless the City of Pueblo, its officers, City Council, directors, employees, agents and representatives from and against any and all losses, claims of personal injury, death or property damage, causes of action, costs and expenses, including attorney's fees, or liability of any nature arising out of or related to Agency's performance under this agreement 13. No Third Party Beneficiaries. This Agreement is intended to be solely for the benefit of the parties and their respective successors and permitted assigns, and this Agreement will not otherwise be deemed to confer upon or give to any other person or entity any remedy, claim, cause of action or other right. 14. Notices and other Communications. Any notice or other communication given or made under this Agreement must be in writing and sent by courier mail, with return receipt, or a copy may also be sent by facsimile or other electronic means. Any notice or other communication will be addressed as follows and, if so addressed, will be effective upon actual receipt. If to Agency: Integral Recoveries, Inc. Terry Boe -President 750 W. Hampden Avenue, Suite 501 Englewood, CO 80110 If to Municipal Court: Pueblo Municipal Court c/o Court Administrator 200 S. Main Street Pueblo, CO 81003 15. Non-Waiver: The failure of either party to insist, in any one or more instances,upon strict performance of any of the provisions of this Agreement shall not constitute a waiver of any parts, rights, and obligations under this agreement. 16. Severability: if a court of competent jurisdiction finds any provision of the Agreement or any portion of it to be invalid, illegal, or unenforceable, the validity of the remaining portions or provisions will not be affected._ 17. Entire Agreement: This written Agreement constitutes the entire agreement and understanding of the parties and supersedes all prior offers, negotiations, and other agreements of any kind. There are no representations or understandings not set forth in this Agreement. CITY OF PUEBLO, A MUNICIPAL CORPORATION Nicholas A. Gradisar Mayor Date: ?"/-7/9' INTEGRAL, EC RIES, I I BY: 2 Te Boe President Integral Recoveries, Inc. Date /n-3 ' /5 .