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Santa Monica to Hire Collections Agency

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Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

By Jorge Casuso

July 8, 2013 – For the first time, Santa Monica could hire a collections agency to make sure fees, taxes, and fines that are not parking citations or library fees are paid.

The City Council will vote on Tuesday whether to authorize a $200,000 contract over two years with NCO Financial Systems, Inc. (NCO), a Pennsylvania-based company, for collections agency services.

“The Finance Department does not currently have the resources to collect on the volume of various types of delinquent debt or the expertise to ensure full compliance with the various Federal and State laws governing collections,” said Salvador M. Valles, the City’s business and revenue operations manager.

“In order to ensure that the City is realizing the full revenue for fees, taxes, and fines that are due but not paid, the Finance Department requires the use of collection agency services to assist with the collection of these delinquent debts,” he said.

The agency would go after delinquent fees for services or facilities, including permits, police services for special events, utilities and fire inspections. It also will go after taxes deposited into the General Fund, such as business license taxes.

When a business or individual does not pay the amount due by the due date, typically 30 days, the account is considered delinquent, City officials said.

Currently one employee in the Finance Department is charged with following up on all delinquent debts owed to the City, Valles said.

These include Business License taxes, past due invoices that are referred by City departments, and checks that are returned un-payable due to insufficient funds, according to finance officials.

“Entering into an agreement with a collection agency would establish a consistent, citywide resource for the collection of delinquent monies due,” Valles said.

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