Memorandum

City of Lawrence

Finance Department

 

TO:

Diane Stoddard, Interim City Manager

FROM:

Mark Hein, Assistant Finance Director

CC:

Bryan Kidney, Finance Director

Date:

January 6, 2016

RE:

Request to Obtain Bids for Professional Services:

Credit Card Processing, Collection Services, Investment Advisor, Financial Advisor

 

Background

In the normal course of business, the City Finance Department contracts for various professional services.  Department staff have been reviewing the status of contracts for professional services.  While conducting the review it was discovered that several services were being performed without a contract &/or that the current contract has ended but the vendor is still being utilized.

 

Professional Contract Descriptions

 

Credit Card Processing

The City currently utilizes Paymentus to process utility billing, fire/medical and sanitation credit card transactions. The agreement with Paymentus consists of a fee of $3.25 for each credit card transaction.  This fee is assessed directly to the customer’s card. Currently there is a limit of $200 per transaction. In 2014, 49,443 transactions were processed totaling $4,974,649.  This amounted to an average of $100.61 per transaction. Consumers paid Paymentus $160,689 in credit card fees in 2014.

 

The City is proposing to move to an absorbed model whereby the transaction processing fee will become the City’s responsibility.  Absorbing the fee will create an incentive for consumers to pay by credit card.  This will allow utility customers an option for a quicker payment method.  Further, it is expected that allowing customers to pay by credit card will help to reduce termination of services beginning in 2016.

 

Recommended calendar:      Distribute RFP – 1/18/16

                                       Deadline for submission – 2/5/16

                                       Projected award date – 2/26/16

 

Recommended selection committee: Planning/Development representative, Public Works representative, Utility Billing representative, Mike Hoffman and Bryan Kidney

 

Collections

The City currently utilizes Windham Professionals to provide collection services for uncollected accounts.  Windham was awarded the contract in the fall of 2012.  Various city departments use this service with Utility Billing being the main customer.  In 2014, Utility Billing turned over 2,702 uncollected accounts to Windham Professionals totaling $470,461.

 

Recommended calendar:      Distribute RFP – 1/18/16

                                       Deadline for submission – 1/29/16

                                      Projected award date – 2/12/16

 

Recommended selection committee: Fire/Medical representative, Utility Billing representative

 

Independent Investment Advisor

The City no longer uses professional advisors to assist with investments. At one point the City was handling direct investments in-house. As interest rates dropped over the last decade the City stopped their active investment program and instead, adopted a passive investment plan.  Over the last several months staff has developed comprehensive cash flows. We are now able to structure investments around cash needs. Staff now wishes to follow best practices and engage an active independent investment advisor. It is estimated that outsourcing independent advisor services will increase interest revenue for the City over what can be accomplished in-house.

 

Recommended calendar:      Distribute RFP – 2/1/16

                                      Deadline for submission – 2/19/16

                                      Projected award date – 3/11/16

 

Recommended selection committee:  Ashley Lonnberg, Brandon McGuire and Bryan Kidney

 

Financial Advisors

The City has had a professional advisory relationship with Springsted Incorporated since the late 1980’s. Springsted Incorporated has performed numerous financial services for the City. The City engages Springsted for individual projects including economic development analysis, post-debt issue compliance and debt modeling. However, the City has not had a contract with Springsted Incorporated for financial advisory services for debt financings.

 

Recommended calendar:      Distribute RFP – 3/14/16

                                      Deadline for submission – 3/31/16

                                      Projected award date – 4/15/16

 

Recommended selection committee:  Legal representative, Chuck Soules, Mike Lawless and Casey Toomay

 

Action Requested:

Proceed in initiating RFPs per the recommended distribution dates.