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HomeMy WebLinkAboutC2011-040 - 2/8/2011 - NAr ' SERVICE AGREEMENT FOR CHECK VERIFICATION AND CHECK COLLECTION SERVICES BETWEEN CHECKRITE AND THE CITY OF CORPUS CHRISTI, TEXAS This service Agreement for Check Verification and Check Collection Services (the "Service Agreement ") is made between Quantum Financial Business Services LLC dba CheckRite ("CheckRite"), a Colorado business authorized to transact business in Texas, and the City of Corpus Christi, Texas (the "City "). The purpose of this agreement is to specify the terms and conditions under which CheckRite will provide check verification services and check collection services for dishonored checks received by City departments. CheckRite and the City agree as follows: 1. CheckRite will provide check verification services to City departments by making available its on -line check verification database services. The database lists names of individuals who or entities which have made checks which have been dishonored. CheckRite shall not be held responsible for any interruption or suspension of this on -line database service. 2. In addition to providing check verification services for City departments, the City authorizes CheckRite to pursue collection of the face amount of all dishonored checks received by the City and referred to CheckRite. CheckRite agrees to attempt to collect payment of the face amount of each dishonored check (the "Dishonored Item ") from the maker of the Dishonored Item, plus a $30.00 Dishonored Item Fee. CheckRite will utilize the following procedures to attempt to collect payment on the dishonored check: 1) Contact bank to verify funds on daily basis (if the bank provides this service); 2) Utilize MoneyGram service to verify open accounts; 3) Re- deposit check if funds available; 4) Re- deposit checks returned to maker; 5) Send at least 3 letters to attempt collection; 6) Make at least 3 phone calls to attempt collection. For redeposited checks, CheckRite will give copy of deposit information to City Treasurer. 3. To facilitate collection efforts, Dishonored Items shall be sent directly from the City's depository bank to CheckRite in accordance with the bank authorization form attached as exhibit 1. The City agrees to sign one or more such bank authorization forms. CheckRite shall provide City Treasurer with copies of the Dishonored Items within five (5) business days of receipt from City's depository bank. 4. The City shall send Dishonored Items to CheckRite for collection in accordance with the terms of this Service Agreement. Nothing in this Service Agreement shall preclude the City from attempting to collect any Dishonored Item before or instead of sending such item to CheckRite for collection. 5. CheckRite shall utilize the following procedures in its attempts to collect payment of all Dishonored Items referred to it by the City: a. CheckRite makes an electronic presentment through the ACH. 2011 -040 02/08/11 Quantum Fin. Bus. Svcs. IND� b. The face amount of the check can be presented week one of the representment process. C. The fee amount can be collected the following week on the successful face amount collections — this prevents CheckRite from inadvertently collecting a fee without first collecting the face amount. d. All funds available for collection are electronically debited from the check writer and credited to CheckRite on the 5 business day. e. Funds that are still NSF can be electronically presented one (1) additional time. This is up to CheckRite and can automatically be initiated through the software. 6. Even if a Dishonored Item is returned to the City for further collection activities, the name of the maker of the item shall be kept on the CheckRite check verification database until the City notifies CheckRite that the Dishonored Item has been paid. The City shall take reasonable steps to ensure that such notification is provided to CheckRite promptly after the date the City receives such payments. 7. In accordance with Section 3.506, Texas Business and Commerce Code, CheckRite acknowledges that it acts under this Service Agreement as a person retained by the holder to seek collection of Dishonored Items. Also in accordance with the terms of Section 3.506, Texas Business and Commerce Code, CheckRite has determined that it will charge makers of Dishonored Items a maximum processing fee of $30.00 as allowed by the State of Texas. 8. Generally, CheckRite shall not accept payments for Dishonored Items that total less than the face amount of the items plus the $30.00 processing fee charged by CheckRite. If the maker of a Dishonored Item attempts to make a partial payment in person, then CheckRite shall not accept such payment. Rather, it shall inform the maker that payment of the face amount of the Dishonored Item plus the $30.00 processing fee is required. If the maker of a Dishonored Item attempts a partial payment to CheckRite by mail, then CheckRite shall return the payment with a letter explaining that partial payments are not accepted and demanding both payment of the face amount of the Dishonored Item and CheckRite's processing $30.00 fee. However, on case by case basis, the City may authorize CheckRite to accept a partial payment, upon execution of promissory note and approval of the City Director of Financial Services. 9. Once a Dishonored Item has been referred to CheckRite for Collection in accordance with this Service Agreement, the City may at times accept partial or full payment for the Dishonored Item (direct payments). The City shall take the appropriate steps to ensure that such notification is provided to CheckRite after the date that the City receives such payment. The City shall not collect a service fee for CheckRite but rather direct payment to CheckRite offices. 9.1 Credit Card payments. CheckRite shall accept credit card payments up to $1,000.00. Check Rite shall accept credit card payments up to $2,500.00 with proper identification and verification. 10. When any Dishonored Item is collected by CheckRite, it shall promptly pay to the City the face amount of the Dishonored Item. CheckRite shall make these payments to the City via ACH electronic deposit no later than the next business day after the date CheckRite receives payment of the dishonored item. 11. Once the maker of a Dishonored Item has paid CheckRite the face amount of the item and the processing fee, CheckRite shall promptly remove the name of this maker from its check verification database unless CheckRite determines that there are other bases, unrelated to the paid Dishonored Item, which justify the maker's continued inclusion in the CheckRite check verification database. 12. Various City departments currently posses old Dishonored Items. The City desires to utilize CheckRite's services to collect such Dishonored Items. The City may refer any Dishonored Item to CheckRite regardless of the age of the item. It is provided, however, that with regard to items dishonored more than forty -five (45) days before the date the City refers them to CheckRite, CheckRite need not send the notices or letter previously described if the required telephone contact process is unsuccessful. In that event, CheckRite may return these items to the City for further collection activities. With regard to these older items, however, CheckRite expressly agrees to enter information in its check verification database. 13. To allow the City to use the CheckRite check verification database, CheckRite shall provide to the City Central Cashiering Department verification terminals. CheckRite shall provide, at its own expense, training to members of City staff concerning the proper use and maintenance of such terminals. 14. CheckRite shall provide, at its own expense, installation, maintenance, and service for or replacement of all such terminals. CheckRite shall also provide, at its own expense, supplies necessary to operate such verification terminals. It is provided, however, that the City shall provide and pay for the installation of any telephone lines necessary to operate these terminals. CheckRite shall provide updated terminals. CheckRite check verification terminals shall provide automated response to City employee within five (5) seconds of check scan process by City employee. 15. It is agreed that CheckRite shall pay postage expenses incurred in mailing the notices or letters previously described in this Service Agreement. 16. CheckRite shall provide the City with decals and customer notification cards. The City may post these decals and distribute the cards to indicate that checks are verified and collected by CheckRite. Such decals and notification cards shall be provided at CheckRite's expense. 17.1 After CheckRite has attempted collection on the check for ninety (90) days, CheckRite may report the check to credit bureau. There is no fee to the City for this service. 17.2 After CheckRite has attempted collection on the check for ninety (90) days, CheckRite shall refer the checks for collection through the Nueces County Attorney office. CheckRite will notify the City Director of Financial Services of the checks referred to the Nueces County Attorney Office. 17.3 After CheckRite receives checks back from the Nueces County Attorney office, CheckRite shall return the checks to the City and no further collection effort is required by CheckRite. 18. The term of this Service Agreement shall be one (1) year from the date this Service Agreement is signed by the City Manager or his designee. This Service Agreement will be renewed for an additional one year term upon the written request of the City Manager. 19. The City may terminate this Service Agreement immediately and without notice for cause. At any time after (5) months after the date the City Manager signs this Service Agreement, either the City or CheckRite may terminate this Service Agreement without cause upon thirty (30) days prior written notice to the other party. Upon termination of this Service Agreement for any reason, the City shall return check verification terminals, supplies, and unused decals and notification cards to CheckRite. The City shall also remove CheckRite decals from any locations where decals are posted. 20. Similarly, except as hereafter specified, upon 30 days' notice of termination of this Service Agreement for any reason, CheckRite shall discontinue collection efforts concerning Dishonored Items and return any Dishonored Items in its possession to the City. Unless the City directs otherwise in writing, however, if CheckRite received payment of a Dishonored Item after the date of termination of this Service Agreement, CheckRite agrees to complete processing of such items in accordance with the terms of this Service Agreement. 21. The City authorizes CheckRite to include checking account information obtained from Dishonored Items referred to CheckRite for collection as part of the CheckRite check verification database. The City understands and agrees that all CheckRite information is confidential and is to be used for check verification purposes only. 22. All CheckRite materials and information is confidential, for the exclusive use of the City for the City's legitimate business needs, and will not be made available to third parties except as required by the Texas Open Records Act, the Freedom of Information Act, or other applicable laws, rules or regulations. Duplicating or copying, in any manner or form, CheckRite data, signs, decals, forms or any other items furnished by CheckRite shall be prohibited. 23. CheckRite represents to the City that it will comply with all applicable federal, state, and local laws, rules and regulations in the performance of this Service Agreement. This shall be particularly true with regards to laws, rules, and regulations relating to fair debt collection practices. 24. CheckRite acknowledges that it acts under this Service Agreement as an independent contractor. 25. CheckRite shall provide to any City department requesting such information, free of charge, and at the time intervals requested, reports in form requested by the City Director of Financial Services or her designee which identify those individuals or entities which have submitted Dishonored Items to the City and which correlate ACH deposit amounts received from CheckRite with the Dishonored Items being paid. Such reports shall be altered to reflect data that applies to the department requesting the report. Additionally, to the extent CheckRite has the computer capabilities from time to time, it agrees to provide other reports to the City departments if the preparation of such reports as feasible without additional expense to CheckRite. 26. From time to time, the City may require a copy of the front and back of a Dishonored Item. CheckRite agrees to provide such copies upon request at CheckRite's expense. 27. CheckRite shall provide to the City Treasurerr copies of all notices or any letter issued in accordance with the terms of this Service Agreement. Such copies shall be provided at CheckRite's expense. 28. As soon as possible after the date this Service Agreement is signed by the City Manager, the City shall provide to CheckRite an executed state sales and use tax exemption certificate. 29. Other than the return of Dishonored Items to the City, notices or correspondence concerning this Service Agreement shall be directed to the city and CheckRite as follows: a) To the City: City Treasurer City of Corpus Christi P.O. Box 9277 Corpus Christi, Texas 78469 -9277 b) To CheckRite: Operations Manager CheckRite 6000 South Padre Island Drive, Suite 210 Corpus Christi, Texas 78412 30. Neither the City nor CheckRite shall assign its interest under this Service Agreement without the prior written consent of the other. Failure to do so shall make the assignment void for all purposes. Such failure shall also form a basis for termination of this Service Agreement. 31. This Service Agreement shall replace and supersede any written or oral agreements between the City (including any City department) and CheckRite. This Service Agreement shall constitute the entire agreement between the City and CheckRite concerning the services to be provided. 32. CheckRite must comply with all applicable Federal, State, and City laws and regulations in performing this Contract, including the Fair Debt Collections Act. 33. CheckRite covenants to maintain insurance coverages as required in Exhibit B. Before activities can begin under this Contract, CheckRite's insurance company(ies) must deliver a Certificate of Insurance, as proof of the required insurance coverages to the Contract Administrator. Additionally, the Certificate must state that the Contract Administrator will be given at least 30 days written notice of cancellation, material change in the coverages, or intent not to renew any of the policies by certified mail. The City must be named as an Additional Insured on the Professional Liability policy. The City Attorney must be given copies of all insurance policies within 15 days of the City Manager's written request. Insurance requirements are attached and incorporated as Exhibit B, and may be revised annually by the City Manager upon 30 days written notice to CHECKRITE. 34. The Contract Administrator designated by the City is responsible for approval of all phases of performance and operations under this Contract including authorizations for payment. All of CHECKRITE notices or communications regarding this Contract must be directed to the Contract Administrator, who is the Director of Financial Services, or designee. 35. CHECKRITE will perform the services hereunder as an independent contractor and will furnish such services in its own manner and method, and under no circumstances or conditions may any agent, servant, or employee of CHECKRITE be considered as an employee of the City. 36. CHECKRITE shall release, defend, indemnify and hold harmless the City, its officers, agents and employees from and against any and all claims, losses, damages, causes of action, suits and liability of every kind, including all expenses of litigation, court costs and attorney's fees, including without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of CHECKRITE, its officers, agents, or employees under this Contract. CHECKRITE is expressly required to defend City against all such claims, 36.1 CHECKRITE will be given prompt written notification of any claims, loss, damage, suit or liability of any kind and shall have the right to defend such action through use of its own counsel. In its sole discretion, City shall have the right to select or to approve defense counsel to be retained by CHECKRITE in fulfilling its obligation hereunder to defend and indemnify City, unless such right is expressly waived by City Manager in writing. City reserves the right to provide a portion or all of its own defense, however, City is under no obligation to do so. Any such action by City is not to be construed as a waiver of CHECKRITE's obligation to defend City or as a waiver of CHECKRITE's obligation to indemnify City pursuant to this Contract. CHECKRITE shall retain City approved defense counsel within seven (7) business days of City's written notice that City is invoking its right to indemnification under this Contract. If CHECKRITE fails to retain Counsel within such time period, City shall have the right to retain defense counsel on its own behalf, and CHECKRITE shall be liable for all costs incurred by City. 37. All parties recognize that the continuation of any contract after the close of any fiscal year of the City, which fiscal year ends on July 31 annually, is subject to appropriations and budget approval providing for such contract item as an expenditure in that budget. The City does not represent that this Contract will actually be adopted as a budget item, that determination is within the sole discretion of the City Council at the time each budget is adopted. 38. CheckRite covenants to pay payroll taxes, property taxes, occupation taxes, Medicare taxes, FICA taxes, unemployment taxes, and all taxes assessed to the City or CheckRite for any activity under this Contract. CheckRite must provide proof of payment of these taxes within 30 days after City Manager's written request. Failure to pay or provide proof of payment is grounds for the City Manager to immediately terminate this Contract. 39. The laws of the State of Texas shall govern the interpretation, validity, performance and enforcement of this Contract. The parties agree that this Contract is performable in Nueces County, Texas and that exclusive venue for any dispute under this Contract lies in Nueces County, Texas. 40. Except as specifically provided otherwise in this agreement any alterations, additions, or deletions to the terms of this agreement shall be by amendment hereto in writing and executed by both parties to this agreement. Modifications which do not change the essential scope and purpose of this Agreement may be approved on behalf of the City by the City Manager or designee. AGREED TO BY: Quantum Financial Business Services Dba CHECKRITE Y Name: Title: President Date: CITY OF CORPUS CHRISTI By: 'Angely Lesoobar City Manager Date: Approved as to form this day of P� , .244-A- 0�aj i Lisa Aguilar Assistant City Attorney For City Attorney EXHIBIT B INSURANCE REQUIREMENTS I. CHECKRITE'S LIABILITY INSURANCE A. CHECKRITE must not commence work under this agreement until all insurance required herein has been obtained and such insurance has been approved by the City. CHECKRITE must not allow any subcontractor to commence work until all similar insurance required of the subcontractor has been obtained. B. CHECKRITE must furnish to the City's Risk Manager two (2) copies of Certificates of Insurance, showing the following minimum coverage by insurance company(s) acceptable to the City's Risk Manager. The City must be named as an additional insured for the Professional liability policy. TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE 30 -Day Notice of Cancellation, material change, non- Bodily Injury and Property Damage renewal or termination is required on all certificates COMMERCIAL GENERAL LIABILITY including: $2,000,000 COMBINED SINGLE LIMIT 1. Commercial Form 2. Premises - Operations 3. Products/ Completed Operations Hazard 4. Contractual Liability 5. Independent Contractors 6. Personal Injury PROFESSIONAL LIABILITY to include: $2,000,000 COMBINED SINGLE LIMIT 1. ERRORS AND OMMISIONS EMPLOYEE DISHONESTY / FIDELITY -CRIME $50,000 POLICY C. In the event of accidents of any kind, CHECKRITE must furnish the Risk Manager with copies of all reports of such accidents within ten (10) days of any accidents. 11. ADDITIONAL REQUIREMENTS A. Certificate of Insurance: The City of Corpus Christi must be named as an additional insured on the Professional liability coverage. If your insurance company uses the standard ACORD form, the cancellation clause (bottom right) must be amended by adding the wording "changed or" between "be" and "canceled ", and deleting the words, "endeavor to ", and deleting the wording after "left ". In lieu of modification of the ACORD form, separate endorsements addressing the same substantive requirements are mandatory. The name of the project must be listed under "Description of Operations" At a minimum, a 30 -day written notice of material change, non - renewal, termination or cancellation to the Risk Manager is required.