TITLE
Recommendation to adopt resolution amending Resolution No. C-27898 imposing a charge on delinquent parking violations sent to ACS State & Local Solutions, Inc., (ACS) for collection services; and authorizing City Manager to execute an agreement with ACS for collection services of delinquent parking violations for a three-year period with the option of renewing for two additional one-year periods. (Citywide)
DISCUSSION
The City of Long Beach issues approximately 450,000 parking citations annually. Penalties assessed for these parking violations range from $37 for illegal parking on private property to $330 for illegally parking in a spot reserved for the disabled. The average penalty for a parking citation in Long Beach is approximately $41.
Over recent years, Long Beach has maintained a collection rate of about 80 percent on parking citations. While this collection rate is laudable when compared to other California cities, 20 percent or about 90,000 annual parking penalties are not being paid each year. Presently, City staff attempts to collect on unpaid parking penalties by sending a notice to the registered owner of the vehicle. If the penalty remains unpaid, a hold is placed on the future registration of the vehicle with the California Department of Motor Vehicles (DMV) until the parking penalty is paid. The DMV charges a non-refundable $3 fee for every vehicle registration the City designates for hold. This process works well, but there are certain classes of vehicles, for which the DMV cannot place a hold on the registration. These include vehicles registered out of state, vehicles sold or their ownership transferred prior to re-registration, or when the citation is issued on a rental car.
It is for these difficult to collect parking violations that City staff recommends entering into an agreement with a firm that specializes in collecting on these specific types of citations. Four firms specializing in parking violations collections responded to a Request for Proposals (RFP) and a committee of City staff selected ACS State & Local Solutions, Inc., 1800 M Street NW, Washington, DC 20036, as best meeting the City's requirements. ACS's fee is based solely on a percentage of the parking violations collected, so no appropriation is necessary to execute the agreement. Historically, ACS has collected 10 to 15 percent of these difficult to collect parking violations, depending on the age and category of the citation.
The proposed agreement contains the following major provisions:
>Lenqth of term: Three years with two additional, one-year renewals with an early
termination of the agreement by either party with 30 days' notice.
>Compensation: 25 percent of all amounts collected.
>Guarantee: ACS will deal with every parking violator in a professional, courteous
manner and will assign a full-time customer service representative to handle the
City's account.
Historical data indicates that the average amount owed, including penalties and late fees, on a citation that will be provided for collection to ACS will be about $85. Therefore, at a compensation rate of 25 percent, the average fee paid to ACS will be about $21.25 for each citation collected. To recapture the entire cost of the unpaid citation from the violator, the 25 percent charge will be added to each delinquent parking violation sent to ACS for collection.
Prior to sending an unpaid parking citation to ACS for collection, City staff will send a final notice to the responsible party advising that if the citation is still unpaid by a certain date, the amount of the penalty will be increased by 25 percent and sent to a collection agency. The responsible party will have had three notices, an opportunity to contest the citation, and a minimum of 12 weeks to have paid the parking citation penalty prior to it being sent to the agency for collection.
This matter was reviewed by Deputy City Attorney Amy Burton on April 14, 2008 and Budget Management Officer Victoria Bell on April 21,2008.
TIMING CONSIDERATIONS
City Council action is requested on May 13, 2008 to ensure the City receives as much parking citation revenue as possible that is budgeted in the current year.
FISCAL IMPACT
It is estimated that approximately $700,000 in net annual revenue will be realized for various funds and departments that have delinquent parking violations. The 25 percent collection fee will be added to the City's parking violation and will be retained by the collection agency. All remaining funds will be remitted to the City and deposited to the appropriate funds.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH IMPOSING A CHARGE OF TWENTY-FIVE PERCENT (25%) ON EACH UNPAID PENALTY FOR A PARKING VIOLATION SENT TO ACS STATE & LOCAL SOLUTIONS, INC. ("ACS") FOR COLLECTION
Respectfully Submitted,
Lori Ann Farrell
Director of Financial Management/CFO
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APPROVED: |
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PATRICK H. WEST |
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CITY MANAGER |