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TO: Mayor Thomas J. Weisner
FROM: Brian W. Caputo, City Financial Officer/City Treasurer
DATE: February 5, 2014
SUBJECT:
A Resolution Authorizing the Execution of a Collection Services Agreement with Municipal Collections of America, Inc.
PURPOSE:
To obtain the City Council's approval of the attached resolution that would authorize the execution of a collection services agreement with Municipal Collections of America, Inc., for the provision of debt collection services.
BACKGROUND:
The City of Aurora has a systemic procedure for collecting amounts due on its accounts receivable. Generally, the procedure calls for a first invoice that is due within 30 days. If the first invoice is not paid within 45 days of its issuance, the city issues a second invoice reflecting a due date 30 days later (75 days after the issuance of the first invoice). If the second invoice is not paid within 45 days of its issuance (90 days after the issuance of the first invoice), the city refers the debt to a collection agency.
With the exception of a period of approximately 12 months, the city has engaged Receivables Management, Inc. (RMI) as its collection agency since 1998. We have been very satisfied with the performance of RMI. RMI's recovery rates have been excellent and their fees are competitive. The company is appropriately assertive when attempting to collect our debts without being offensive. We have had very few complaints about RMI's collection practices. Moreover, RMI's administrative process is completely automated. This reduces the time that our staff must spend preparing debts for collection referral.
In recently comparing the collection results received by comparable municipalities, we found that RMI was among the best performing collection agencies.
DISCUSSION:
Recently, RMI reorganized its corporate structure. RMI's local government debt collections are now being handled by a newly formed company, Municipal Collections of Amer...
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