Improve Collections Rate For Payment Of Fees Owed For City Services

Motion - City departments are responsible for collecting a variety of fees for services rendered to maintain and improve the lives of our citizens. However, in some cases, the recipient of City services do not always pay for such fees by passing bad checks or do not pay in a timely manner. In such cases, department personnel must initiate overdue notices, whether to the service recipient or insurance companies, if the charges are covered. Overdue accounts receivable are a major drain to the productive use of scarce City resources. Not only does the City spend large amounts of personnel resources to attempt to make collections, but even with such efforts, full collection of all outstanding amounts are never possible. There are a number of identified factors contributing to the City's inability to achieve full cost recovery including, but not limited to: Unable to locate debtor; unable to receive payment from debtor; Medi-Cal or other entities' reimbursement rates do not cover actual costs. The City has contracted with firms to collect bad debts after departments have unsuccessfully tried to collect outstanding receivables, but the City never receives the entire amount outstanding, and must share the collections with the contractors for their efforts. The City must explore financial management tools to minimize the amount of bad debt collected initially, such as commercial check verification services and move to allow the public to pay for services with credit cards, the validity of which can be verified at the point of sale. Check verification and credit card payment is available in some departments, but we must expeditiously explore the cost and benefit of expanding such services to all departments which accept payment from the public for City services. We must further explore the value of submitting uncollected accounts earlier to the contracted firms to potentially increase the receipts submitted to the City. THEREFORE MOVE that the Council instruct the City Administrative Officer, Chief Legislative Analyst and the Office of Finance to report to the Council within 30 days with an analysis of citywide initiatives that the City could implement expeditiously to improve the collections rate for the payment of fees or other amounts owed for City services from individuals, as well as insurance companies and Medi-Cal. Such initiatives may include, but not be limited to, wider use of check and credit card verification services, legislation to increase governmental program and health insurance reimbursement rates for paramedic rescue services to cover actual service costs.