Memorandum
City of
Legal Services Department
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TO: |
David L. Corliss,
City Manager |
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FROM: |
Vicki Stanwix,
Municipal Court Manager Toni Ramirez
Wheeler, Director of Legal Services |
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CC: |
Cynthia Boecker,
Diane Stoddard and Jonathan Douglas |
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Date: |
June 19, 2008 |
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RE: |
Revised Contract
with Municipal Services Bureau for Collection Services |
Please include the following item on the City Commission agenda for consideration:
Project/Item Description. Contract revision with Municipal Services Bureau for past-due fine and fee collection for the Lawrence Municipal Court as a result of changes in state law.
Project Description/History. The Lawrence Municipal Court has contracted with Municipal Services Bureau (MSB) for fine and fee collection services since 2003. The company specializes in court fine collection and has demonstrated solid performance in collecting court fines and fees for the City. MSB’s ability to locate defendants by cross-referencing with other courts, in addition to traditional collection methods, has resulted in a 35% collection rate on accounts submitted and nearly $300,000 in revenue to the City.
K.S.A. 12-4119 allows municipal courts to collect additional fees on cases submitted to a collection agency to offset the cost of collection charged by the contracted agency. The statute authorizes administrative fees of up to 33% to be added to cases referred for collection. K.S.A. 12-4119 further provides that the cost of collection shall be paid by the defendant as an additional court cost in all cases where the defendant fails to pay any amount ordered by the court, and the court utilizes the services of a collection agency.
The commission rate currently paid to Municipal Services Bureau is 22.5% for traffic and criminal fines and 35% for parking fines. This amount is taken out of fines collected from the defendant. Municipal Services Bureau has agreed to revise our current contract by reducing the commission rate to 20% on all cases submitted. In accordance with the new law, the Lawrence Municipal Court will assess a 25% collection fee on all cases submitted to Municipal Services Bureau for collection.
For example: A defendant is assessed a $100 fine for a violation of the law. Municipal Court attempts to collect the $100 through normal in-house collection methods. If the defendant fails to timely pay the assessed fine, the court may forward the account to the collection agency. The City will assess a 25% administrative fee on the case as authorized by K.S.A. 12-4119. If the agency successfully collects on the account, the commission rate of 20% will be paid to the agency by the City, and the City will retain 100% of the original fine.
$100 original fine + 25% ($25)
administrative fee = $125 due to City
$125 collected by agency - 20% ($25)
commission paid = $100 retained by the City
Due to the long standing nature of our relationship with Municipal Services Bureau and the standard of service they provide staff recommends the contract be renewed for one year, with the option to extend the contract for two additional years if performance remains satisfactory. Initiating a revised contract will allow us to continue a relationship that has been successful for us.
Action Request. Authorize the City Manager to execute a revised contract with Municipal Services Bureau substantially similar to the attached.