From
Amy Sprinkles
Title
Ratification of a multi-year contract (one year with five one-year extensions) with UMS for library debt collection and authorize the City Manager to execute the renewal options with aggregate price fluctuations of the lesser of up to $50,000 or 25% of the original maximum price so long as sufficient funding is appropriate by the City Council to satisfy the city's obligation during the renewal terms
Presenter
Amy Sprinkles, Marketing/Library Director
Recommended Action
Approve
Analysis
In 2014, with approval from the City Council’s Finance Committee, the library system began using a collection agency to collect debts and recover unreturned books owed to the library. At that time, 1,300 borrowers in the system with fines of more than $25 owed the library $104,092. The number of items in the system with a “lost” status was 18,880, with a value of $279,437.
Since May 2014, we’ve spent $10,077.50 with UMS to recover $4,529.94 in fines and $15,587.93 in material.
UMS uses a “soft” collect approach. Letters are sent first. After 35 days if the patron still has an outstanding balance, phone calls from a live representative are made. UMS has found this approach elicits a response from 50%-70% of the patrons contacted. A response is either a payment to lower their balance or returning of all outstanding materials. For every $1.00 spent by the library, UMS returns about $4.00 worth of materials and fees coming back to the library.
If no activity occurs, the patron is moved into secondary placement, which includes skip tracing. UMS waits until at least 120 days from the first referral by the library to report a patron to the major credit reporting agencies. The debt will show as an open unpaid account and will affect the patron’s ability to be approved for a loan. Once the account is resolved, the debt shows as paid and after 3 months all record of the activity is removed from the patron’s credit record.
After a successful FREE 90-day trial, the library executed a one-year contract not to exceed $9,000 (we pay $8.95 per account we send for collection) in July 2014 with five one-year renewals. The second one-year extension was executed in September 2015 for $6,000. Because all six years of the contract may exceed $50,000, we are asking the contract be ratified so that we can proceed with using UMS to recover fines and books owed the library in 2015-2016 and beyond.
Financial Consideration
Funding with UMS for library debt collection is available in the FY 2015/2016 Library Capital Projects Fund (402590), WO #01609903 (FY Library).