ADMINISTRATIVE REPORT
Date: July 10, 1996
TO: Vancouver City Council
FROM: City Treasurer and Manager of Purchasing Services
SUBJECT: Award of R.F.P. No. 25-96-01: Supply of Pre-Collection
Services
RECOMMENDATION
THAT Council accept the low bid from CBV Collection Services, a
privately owned company, for the supply of Pre-Collection Services
for a 9 month period from October 1st, 1996 at an estimated cost of
$170,000 (based on a 60% completion rate) plus the 7% Goods and
Services Tax (less any municipal rebate received), subject to a
contract satisfactory to the Director of Legal Services.
GENERAL MANAGER'S COMMENTS
The General Manager of Corporate Services RECOMMENDS approval of
the foregoing.
COUNCIL POLICY
On January 16, 1996, City Council approved the recommendation of the
General Manager of Corporate Services that the City proceed to a Request
for Proposal for a telephone follow-up process for outstanding by-law
fines.
The City s By-law Fines Collection Branch currently issues approximately
280,000 Final Notices per year. The City will establish a weekly
assignment with the successful contractor of approximately 5,400 files
containing the Final Notice number, the offense date, the registered
owner of the vehicle, and the address of the registered owner.
DISCUSSION
Requests for Proposals were opened by the City Clerk on May 21, 1996,
and referred to the City Treasurer and the Manager of Purchasing
Services for report.
A copy of the tabulation of bids is on file in the Purchasing office.
The 7% Goods and Services Tax (less any municipal rebate received) is in
addition to all prices shown in this report and in the tabulation. The
Provincial Sales Tax does not apply.
Funds for this project are to be provided from increased fine revenues.
The Request for Proposal called for a Pre-Collection Service consisting
of a personal phone contact to the registered owner of the vehicle to
which a By-Law Violation Notice has been issued.
The purpose of performing this service is to:
- supplement the city s existing collection practises,
- to answer any questions the alleged offender may have concerning
the voluntary payment amount and/or the process for appeal or
dispute,
- to inform the alleged offender about payment options and on
subsequent follow-up procedures which the City will pursue
including issuance of a summons,
- to increase the level of customer service,
- to achieve greater collections on by-law fines.
Thirteen proposals were received from eight firms.
A committee consisting of a Buyer from the Purchasing Services Division,
the Deputy City Treasurer and Collector, the Supervisor of By-Law Fines,
and the Systems Analyst for Revenue Services evaluated the proposals
based on the criteria set out in the original R.F.P. document. CBV
Collection Services, the low bid, met or exceeded all of the criteria.
CBV Collection Services submitted two bids. One bid was for $1.19 per
completed phone call and an additional $.27 per uncompleted phone call.
The alternate bid was for $1.35 per completed phone call and no charge
for uncompleted calls. It was determined that if less than 65% of the
calls are completed, the alternate bid is the most cost effective. As
there will be a certain amount of difficulty in establishing phone
contact, there is an anticipated completion rate at this time of 50% to
60%.
1. Optional In-House Program
When Council approved the issuing of a Request for Proposal, direction
was also given to evaluate the alternative of performing this activity
with City staff. Recognizing that City staff do not have any experience
in this activity, consultation was carried out with those companies,
including B.C. Telephone, who are active in this industry. Staff were
able to make estimates of the up-front capital costs to set up a
City-run operation, including accommodation, computers and software.The
estimated cost is $280,000.
Developing estimates for the number of staff required was more
problematic, but a fairly simplified analysis suggests that it would
require 10 FTE (plus supervision and support) to complete the projected
5400 calls per week. Industry representatives suggest that this staff
would probably be required to work evenings and weekends in order to
successfully complete calls. Further, due to the repetitive nature of
the work, shifts would probably be limited to five hours per day.
Staff have not attempted to factor all these constraints into the
analysis, but ballpark estimates of operating costs, on an annual basis,
would total $460,000 (or $345,000 for a nine month period - to compare
to the period for the tender).
ANALYSIS:
One-time costs:
Facilities: workstation furniture (12 @ $6,000/ea) $ 72,000
Office set-up 60,000
Computer systems hardware & software 150,000
(Includes predictive dialer, Dominion Directory
software)
Estimated Total $282,000
On-going costs:
Staff: l supervisor @ PG22 plus benefits $ 47,000/yr.
1 support @ PG13 plus benefits 33,000/yr.
10 telephone staff @PG15 plus benefits 355,000/yr.
Supplies 2,000/yr.
Office space rental @ $17/sq.ft. X 1422 sq.ft. 25,000/yr.
Estimated Total $462,000/yr.
In comparing the costs for a City-run operation for nine months of
$345,000, plus amortization of capital costs of $40,000, to the bid
price of $170,000, there is no economic basis for operating this program
internally. Further, this program is clearly an experiment, to assess
the effectiveness of establishing personal contact with alleged
offenders.
The program will be evaluated at the end of nine months. Given this
trial nature, it would be unwise to make the up-front investments and
hire staff until there is more assurance of the continuation of the
program.
We are therefore, recommending the acceptance of the alternate bid from
CBV Collection Services.
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