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HomeMy WebLinkAboutMerchants Credit Corporation CITY OF WASHINGTON DEBT COLLECTIONS SERVICES AGREEMENT between the City of Auburn and Merchant5Credit Corporation THIS AGREEMENT is made by and between the City of Auburn, a Washington municipal corporation (hereinafter the "City"), and Merchant5redit Corporation organized under the laws of the State of Washington, located and doing business at P.O. Box 7416, Bellevue, WA 98008 (hereinafter the "Contractor"). I. DESCRIPTION OF WORK. Contractor shall provide the following goods and materials and/or perform the following services for the City: Contractor shall provide debt collection services for accounts the City refers to the Contractor. Additional terms on attached Exhibit A. r� Contractor acknowledges and understands that it is not the City's exclusive provider of these goods, materials, or services and that the City maintains its unqualified right to obtain these goods, materials, and services through other sources. Contractor further represents that the services furnished under this Agreement will be performed in accordance with generally accepted professional practices within the Puget Sound region in effect at the time such services are performed. Contractor shall do all work and furnish all equipment, labor, and materials necessary to collect accounts assigned to Contractor by City. II. TIME OF COMPLETION. Upon the effective date of this Agreement, Contractor shall provide all goods, materials, and services until terminated per section V. III. COMPENSATION. The Contractor's primary compensation due under the terms of this Agreement is a 25% collection fee. Contractor will add the 25% collection fee, which will be retained by Contractor as commission. The principal amount assigned, when collected, will be returned in full to the City. Payments will be applied proportionally to principal and collection fee as paid.. DEBT COLLECTION SERVICES AGREEMENT Page 1 of 12 IV. INDEPENDENT CONTRACTOR. The parties intend that an Independent Contractor-Employer Relationship will be created by this Agreement. By their execution of this Agreement, and in accordance with Ch. 51.08 RCW, the parties make the following representations: A. The Contractor has the ability to control and direct the performance and details of its work, the City being interested only in the results obtained under this Agreement. B. The Contractor maintains and pays for its own place of business from which Contractor's services under this Agreement will be performed. C. The Contractor has an established and independent business that is eligible for a business deduction for federal income tax purposes that existed before the City retained Contractor's services, or the Contractor is engaged in an independently established trade, occupation, profession, or business of the same nature as that involved under this Agreement. D. The Contractor is responsible for filing as they become due all necessary tax documents with appropriate federal and state agencies, including the Internal Revenue Service and the state Department of Revenue. E. The Contractor has registered its business and established an account with the state Department of Revenue and other state agencies as may be required by Contractor's business,and has obtained a Unified Business Identifier (UBI) number from the State of Washington. F. The Contractor maintains a set of books dedicated to the expenses and earnings of its business. V. TERMINATION. Either party may terminate this Agreement, with or without cause, upon providing the other party thirty (30) days written notice at its address set forth on the signature block of this Agreement. Any amounts generated from Auburn accounts received after this contract is terminated shall be distributed according to the terms of this Agreement as if the Agreement were still in effect. VI. CHANGES. The City may issue a written amendment for any change in the goods, materials or services to be provided during the performance of this Agreement. If the Contractor determines, for any reason, that an amendment is necessary, Contractor must submit a written amendment request to the person listed in the notice provision section of this Agreement, section XIV(c), within fourteen (14) calendar days of the date Contractor knew or should have known of the facts and events giving rise to the requested change. If the City determines that the change increases or decreases the Contractor's costs or time for performance, the City will make an equitable adjustment. The City will attempt, in good faith, to reach agreement GOODS AND SERVICES AGREEMENT Page 2 of 12 i with the Contractor on all equitable adjustments. However, if the parties are unable to agree, the City will determine the equitable adjustment as it deems appropriate. The Contractor shall proceed with the amended work upon receiving either a written amendment from the City or an oral order from the City before actually receiving the written amendment. If the Contractor fails to require an amendment within the time allowed, the Contractor waives, its right to make any claim or submit subsequent amendment requests for that portion of the contract work. If the Contractor disagrees with the equitable adjustment, the Contractor must complete the amended work; however, the Contractor may elect to protest the adjustment as provided in subsections A through E of Section VII, Claims, below. The Contractor accepts all requirements of an amendment by: (1) endorsing it, (2) writing a separate acceptance, or (3) not protesting in the way this section provides. An amendment that is accepted by Contractor as provided in this section shall constitute full payment and final settlement of all claims for contract time and for direct, indirect and consequential costs, including costs of delays related to any work, either covered or affected by the change. VII. CLAIMS. If the Contractor disagrees with anything required by an amendment, another written order, or an oral order from the City, including any direction, instruction, interpretation, or determination by the City, the Contractor may file a claim as provided in this section. The Contractor shall give written notice to the City of all claims within fourteen (14) calendar days of the occurrence of the events giving rise to the claims, or within fourteen (14) calendar days of the date the Contractor knew or should have known of the facts or events giving rise to the claim, whichever occurs first. Any claim for damages, additional payment for any reason, or extension of time, whether under this Agreement or otherwise, shall be conclusively deemed to have been waived by the Contractor unless a timely written claim is made in strict accordance with the applicable provisions of this Agreement. At a minimum, a Contractor's written claim shall include the information set forth in subsections A, items 1 through 5 below. FAILURE TO PROVIDE A COMPLETE, WRITTEN NOTIFICATION OF CLAIM WITHIN THE TIME ALLOWED SHALL BE AN ABSOLUTE WAIVER OF ANY CLAIMS ARISING IN ANY WAY FROM THE FACTS OR EVENTS SURROUNDING THAT CLAIM OR CAUSED BY THAT DELAY. A. Notice of Claim. Provide a signed written notice of claim that provides the following information: 1. The date of the Contractor's claim; 2. The nature and circumstances that caused the claim; 3. The provisions in this Agreement that support the claim; 4. The estimated dollar cost, if any, of the claimed work and how that estimate was determined; and GOODS AND SERVICES AGREEMENT Page 3 of 12 5. An analysis of the progress schedule showing the schedule change or disruption if the Contractor is asserting a schedule change or disruption. B. Records. The Contractor shall keep complete records of extra costs and time incurred as a result of the asserted events giving rise to the claim. The City shall have access to any of the Contractor's records needed for evaluating the protest. The City will evaluate all claims, provided the procedures in this section are followed. If the City determines that a claim is valid, the City will adjust payment for work or time by an equitable adjustment. No adjustment will be made for an invalid protest. C. Contractor's Duty to Complete Protested Work. In spite of any claim, the Contractor shall proceed promptly to provide the goods, materials and services required by the City under this Agreement. D. Failure to Protest Constitutes Waiver. By not protesting as this section provides, the Contractor also waives any additional entitlement and accepts from the City any written or oral order (including directions, instructions, interpretations, and determination). E. Failure to Follow Procedures Constitutes Waiver. By failing to follow the procedures of this section, the Contractor completely waives any claims for protested work and accepts from the City any written or oral order (including directions, instructions, interpretations, and determination). VIII. LIMITATION OF ACTIONS. CONTRACTOR MUST, IN ANY EVENT, FILE ANY LAWSUIT ARISING FROM OR CONNECTED WITH THIS AGREEMENT WITHIN 120 CALENDAR DAYS FROM THE DATE THE CONTRACT WORK IS COMPLETE OR CONTRACTOR'S ABILITY TO FILE THAT SUIT SHALL BE FOREVER BARRED. THIS SECTION FURTHER LIMITS ANY APPLICABLE STATUTORY LIMITATIONS PERIOD. IX. WARRANTY. Contractor warrants that it will use commercially reasonable efforts to collect said accounts, will exercise due diligence, and will confine its efforts to the highest standard of ethical practice. Contractor further warrants that its collection activities will comply with federal, state, and local laws, including the Fair Debt Collection Practices Act, where applicable. X. DISCRIMINATION. In the hiring of employees for the performance of work under this Agreement or any sub-contract, the Contractor, its sub-contractors, or any person acting on behalf of the Contractor or sub-contractor shall not, by reason of race, religion, color, sex, age, sexual orientation, national origin, or the presence of any GOODS AND SERVICES AGREEMENT Page 4 of 12 sensory, mental, or physical disability, discriminate against any person who is qualified and available to perform the work to which the employment relates. XI. INDEMNIFICATION. Contractor shall defend, indemnify and hold the City, its officers, officials, employees, agents and volunteers harmless from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, arising out of or in connection with the Contractor's performance of this Agreement, except for that portion of the injuries and damages caused by the City's negligence. City shall defend, indemnify and hold the Contractor, its officers, officials, employees, and agents harmless from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, arising out of or in connection with the City's negligent performance of this Agreement, except for that portion of the injuries and damages caused by the Contractor's negligence. The City's inspection or acceptance of any of Contractor's work when completed shall not be grounds to avoid any of these covenants of indemnification. IT IS FURTHER SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THE INDEMNIFICATION PROVIDED HEREIN CONSTITUTES THE CONTRACTOR'S WAIVER OF IMMUNITY UNDER INDUSTRIAL INSURANCE, TITLE 51 RCW, SOLELY FOR THE PURPOSES OF THIS INDEMNIFICATION. THE PARTIES FURTHER ACKNOWLEDGE THAT THEY HAVE MUTUALLY NEGOTIATED THIS WAIVER. In the event Contractor refuses tender of defense in any suit or any claim, if that tender was made pursuant to this indemnification clause, and if that refusal is subsequently determined by a court having jurisdiction (or other agreed tribunal) to have been a wrongful refusal on the Contractor's part, then Contractor shall pay all the City's costs for defense, including all reasonable expert witness fees and reasonable attorneys' fees, plus the City's legal costs and fees incurred because there was a wrongful refusal on the Contractor's part. The provisions of this section shall survive the expiration or termination of this Agreement. XII. INSURANCE. Contractor shall obtain and keep in force continually during the term of this contract Commercial General Liability insurance coverage in the amount of at least One Million Dollars ($1,000,000.00). Per this agreement, the city shall be included as an Additional Insured under Contractor's policy, with respect to the work performed for the city. The Contractor's insurance coverage shall be primary insurance in respect to the city. Any insurance, self-insurance, or insurance pool coverage maintained by the city shall be in excess of the Contractor's insurance and shall not contribute to it. Contractor will supply the city a copy of its collection agency license within 30 days of the execution of this agreement. GOODS AND SERVICES AGREEMENT Page 5 of 12 XIII. WORK PERFORMED AT CONTRACTOR'S RISK. Contractor shall take all necessary precautions and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of the contract work and shall utilize all protection necessary for that purpose. All work shall be done at Contractor's own risk, and Contractor shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. XIV. MISCELLANEOUS PROVISIONS. A. Non-Waiver of Breach. The failure of the City to insist upon strict performance of any of the covenants and agreements contained in this Agreement, or to exercise any option conferred by this Agreement in one or more instances shall not be construed to be a waiver or relinquishment of those covenants, agreements or options, and the same shall be and remain in full force and effect. B. Resolution of Disputes and Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. If the parties are unable to settle any dispute, difference or claim arising from the parties' performance of this Agreement, the exclusive means of resolving that dispute, difference or claim, shall only be by filing suit exclusively under the venue, rules and jurisdiction of the King County Superior Court, King County, Washington, unless the parties agree in writing to an alternative dispute resolution process. In any claim or lawsuit for damages arising from the parties' performance of this Agreement, each party shall pay all its legal costs and attorney's fees incurred in defending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; provided, however, nothing in this paragraph shall be construed to limit the City's right to indemnification under Section Xlof this Agreement. C. Written Notice. All communications regarding this Agreement shall be sent to the parties at the addresses listed on the signature page of the Agreement, unless notified to the contrary. Any written notice hereunder shall become effective three (3) business days after the date of mailing by registered or certified mail, return receipt requested,and shall be deemed sufficiently given if sent to the addressee at the address stated in this Agreement or such other address as may be hereafter specified in writing. D. Assignment. Any assignment of this Agreement by either party without the written consent of the non-assigning party shall be void. If the non-assigning party gives its consent to any assignment, the terms of this Agreement shall continue in full force and effect and no further assignment shall be made without additional written consent.. E. Modification. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of the City and Contractor. GOODS AND SERVICES AGREEMENT Page 6 of 12 F. Entire Agreement. The written provisions and terms of this Agreement, together with any Exhibits attached hereto, shall supersede all prior verbal statements of any officer or other representative of the City, and such statements shall not be effective or be construed as entering into or forming a part of or altering in any manner this Agreement. All of the above documents are hereby made a part of this Agreement. However, should any language in any of the Exhibits to this Agreement conflict with any language contained in this Agreement, the terms of this Agreement shall prevail. G. Compliance with Laws. The Contractor agrees to comply with all federal, state, and municipal laws, rules,-and regulations that are now effective or in the future become applicable to Contractor's business, equipment, and personnel engaged in operations covered by this Agreement or accruing out of the performance of those operations. H. Confidentiality. Contractor agrees that all files and information given access or exposed to while performing work under this Agreement shall be kept strictly confidential and Contractor shall take reasonable step to limit the disclosure of such information only to those who have authority to receive the information. Contractor agrees not to sell or share any consumer information obtained from the City with third parties, other than credit reporting agencies in accordance with this contract. Contractor further agrees that any consumer information provided by the City or acquired by Contractor in the course of performing work shall be used only to carry out the intended purposes for which the information was originally provided or acquired. I. Retention of Records. To the extent that the Contractor desires or requires the return or destruction of account records, the City may retain a copy of such records as reasonable necessary to comply with applicable laws, including reporting or auditing requirements, and to respond to or defend against inquiries, claims or demands of account debtors or others. J. Access to Records. To the extent records of the City's activities are maintained in the Contractor's records or under the Contractor's control, the Contractor will provide copies of such records to the City as reasonable necessary to investigate or respond to complaints, audits, inquiries, legal actions and/or administrative actions involving the City, whether during or within 2 years from the end of the term of this Agreement, as may be extended by mutual agreement of the parties. The city may audit Contractor's records pertaining to accounts assigned for collection after providing reasonable notice, which shall include not less than five days written notice. K. Mutual Representation. The parties represent and warrant as follows: 1. Each party is duly organized and in good standing in its state of formation; - 2. Each party has the power and authority to execute and perform the obligations described in this Agreement; GOODS AND SERVICES AGREEMENT Page 7 of 12 3. Each party has obtained all requisite authorizations, approvals, consents or permits required to perform its obligations, particularly, Contractor has obtained all licenses and permits required by law of collection agencies and has posted all bonds and complied with all regulations required of collection agencies; 4. Each party is in material compliance with all applicable laws; and 5. Entering into this Agreement will not cause either party to be in material breach of any other of its contracts or obligations. L. Credit Reporting. Collection account placements will be made with national credit- reporting bureaus under Contractor's contract, M. Debts Just and Owing. The Contractor represents that to the best of its knowledge, every account referred will be a just debt due and owing, and will not be subject to any valid defense, set-off or counterclaim, including that such account or the obligor of such account will not be subject to any bankruptcy proceeding, stay or discharge as of the time of referral. The Contractor further represents that to the best of its knowledge, every account referred will contain accurate information, including information regarding the identity of the debtor and the balance of the account. N. . Payment Reversals. The Contractor acknowledges that, from time to time, the City may remit funds to the Contractor that may be reversed, because of such things as non- sufficient fund check or credit card payment reversals. The Contractor will, upon notice from the City, reimburse the City for all funds remitted to the Contractor that are subsequently reversed. The City will deduct such reversals from subsequent remittances to the Contractor. O. Beneficiaries to Contract. This Agreement is entered into for the benefit of the Contractor and the City, and no other parties are entitled to enforce its terms. No third-party beneficiaries are intended to be created or are created hereunder, and no other party can derive any benefit or right. P. Taxes. The Contractor agrees to pay all sales, use, value-added or similar taxes as may be applicable to the services rendered by the Collection City. Q. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all of which will together constitute this one Agreement. R. Reports. Contractor shall list City accounts, upon request, via printout or electronic media. Contractor shall further provide upon request the following reports as requested: GOODS AND SERVICES AGREEMENT Page 8 of 12 1. Alphabetical Acknowlegment of the receipt of accounts by Contractor for collection, as assigned by City; 2. Debtor Status Report indicating individual account information, including attorney fees and costs for all legal actions, and details of collection effort; 3. Aged Statistical Analysis of overall collection effort; and 4. Remittance Report detailing payments made on accounts referred to Contractor by City. S. Effective Date of Assignment. Referral of an account by the City to Contractor shall become effective as na assignment upon mailing of acknowledgement of referral by Contractor. IN WITNESS, the parties below execute this Agreement, which shall become effective on the last date entered below. CONTRACTOR: C170 F AUGUR By: By Print Name: n Print Name: a— �U �- W is cJ a Its: ere, ��C,a�' Its: AY � Date: 1--'C)-43 �a©13 Date: Z l 5- 13 NOTICES TO BE SENT TO: NOTICES TO BE SENT TO: CONTRACTOR: CITY OF AUBURN: Merchants Credit Corporation Director of Finance D.W. Quigley City of Auburn P.O. Box 74116 25 West Main Street Bellevue, WA 98008 Auburn, WA 98001 1-800-755-1107 (telephone) 360-738-4817 in Bellingham (253) 931-3000 GOODS AND SERVICES AGREEMENT Page 9 of 12 EXHIBIT A AGREEMENT FOR COLLECTION SERVICES CITY OF AUBURN, hereinafter referred to as "Client", agrees to utilize such services in accordance with the following terms and conditions: 1. Client will refer for collection services only accounts certified to be just and owing and will supply Merchants Credit Association, hereinafter referred to as "MCA", upon request, with documentation supporting each debt assigned. 2. MCA collection activities shall be in compliance with federal, state, and local laws with adherence to the Fair Debt Collection Practices Act (FDCPA). 3. Client authorizes MCA to endorse checks payable to Client for the purpose of deposit into a separate trust account maintained by MCA for its clients. 4. MCA will prepare a remittance monthly displaying all payments received for the previous month containing account names, numbers, and dates payments were received. Any settlement must be approved by the Client prior to the actual settlement with the debtor. 5. Unless otherwise agreed in writing or stated herein, all accounts are assigned on a contingency basis; compensation will be paid to MCA only from amounts collected. MCA's commission rate is 25% of the principal assigned as allowed pursuant to RCW 19.16.500. MCA will notify consumer by letter of its intention to refer account to a collection agency as per RCW 19.16.500.2 at no additional cost to Client. MCA will add the 25% collection fee which will be retained by the agency as our commission. Payments will be applied proportionally to principal and collection fee as paid. The proportion shall be 80% principal; 20% collection fee and the Client's amount shall be remitted to Client as it is collected so that Client and MCA are compensated concurrently. When a consumer pays the client direct, MCA will assess the debtor a collection fee of 25% of the amount paid. MCA will charge the client 25% of the principal dollars collected on cases where MCA has filed suit on behalf of the Client, if the court disallows the collection fee. MCA advances all courts costs and attorney fees. MCA will retain all costs and attorney fees collected, without limitation, and these shall not apply to the contingency. GOODS AND SERVICES AGREEMENT Page 10 of 12 6. Client agrees to notify MCA immediately of payments received by them on accounts placed for collection. Client may choose to assign payment received from debtor to current account, which may not have been referred to MCA for collection. 7. Statements will be sent to Client monthly displaying all payments received for the previous month, corresponding account names, numbers, and dates payments were received. Collection contingency fees due MCA on any statement to Client are due and payable within 30 days of receipt of statement by Client. MCA has the right to offset any such fees unpaid after 60 days against collections made on Client's accounts. 8. MCA will add interest to accounts placed for collection at the rate allowable by law. Interest will be shared at a 50/50 split. 10. MCA will not institute legal actions on debts without first receiving Client's written authorization to do so. Costs and attorney's fees incurred by MCA in litigation will be recovered from first monies collected. All attorney fees and court costs are the responsibility of MCA. Client shall have no responsibility for uncollected costs advanced by MCA. 11. Credit reporting. Collection account placements are made with the national credit- reporting bureaus under MCA's contract. 12. MCA shall retain the right to commissions from debtor on all accounts recalled after the date of acknowledgement. In the event suit has been filed and Client cancels or revokes the assignment of any claim, Client agrees to pay MCA the agreed commission together with any court costs and attorney fees. Client agrees to hold MCA harmless in the case of a Counter claim that makes allegations against the client. Client is not responsible for court costs and attorney fees if account is recalled after fees are collected, in the event an account is fully paid through escrow of a real estate sale, or if after six months of the date of entry of the judgment MCA has not collected any amounts by enforcing the judgment. Client shall inform MCA of a escrow payment as soon as Client is informed of the payment, 13. All accounts placed with MCA are covered by our state-licensing bond and ACA International professional liability insurance. Each Party is solely responsible for the employment, acts, omissions, control and direction of its employees. Additionally, each party will be responsible for claims by a third party against the other based on actions of its employees including the responsibility to hold the other harmless against any resulting judgments. 14. MCA agrees that all files and Client information we may be given access or exposed to while performing work under this contract shall be kept strictly confidential. MCA agrees not to sell or share any consumer information obtained from Client with third parties, other than credit reporting agencies in accordance with this contract. MCA GOODS AND SERVICES AGREEMENT Page 11 of 12 further agrees that any consumer information provided by Client or acquired by MCA in the course of performing our work shall be used only to carry out the intended purposes for which the information was originally provided or acquired. 15. TERMINATION: This agreement may be terminated by either party by 90 day written notice or otherwise as they may mutually agree. MCA reserves the rights to retain accounts where lawsuits have been filed, unless MCA has already collected all its attorney fees and court costs, payment arrangements have been made and accounts on hold for third party payment. If MCA has collected all its attorney fees and court costs in a lawsuit, it shall transfer the judgment to client once termination is effective. This agreement constitutes the entire understanding between MCA and the undersigned Client. Terms and conditions as they pertain to all collection services provided may not be changed or modified except by written agreement signed by both parties. GOODS AND SERVICES AGREEMENT Page 12 of 12