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HomeMy WebLinkAboutPR 15216: OFFERMAN & KING (COLLECTION FIRM)interoffice MEMORANDUM To: Mayor, City Council, and City Manager From: Mark T. Sokolow, City Attorney ~~ Date: April 16, 2009 Subject: P. R. No. 15216; Council Meeting April 21, 2009 Attached is P. R. 15216 as it pertains to retaining a collection firm, Offerman & King, L.L.P. MTS:gt Attachment cc: OFFERMAN & KING, L.L.P. z.pr15216 memo P. R. No. 15216 04/16/09 gt RESOLIITION NO. A RESOLIITION AS ZT PERTAINS TO RETAINING A COLLECTION FIRM WHEREAS, Offerman & King, L.L.P. specializes in serving the needs of creditors throughout the State of Texas, and is willing to assist the City in streamlining its internal process and in improving collection rates; and WHEREAS, the firm of Offerman & King, L.L.P. is willing to serve as court-appointed receiver in cases as needed. NOW THEREFORE, BB IT RESOLVED BY THE CITY COIINCIL OF THE CITY OF PORT ARTHIIR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Council approves the usage of Offerman & King, L.L.P. as a collection attorney and as a court- appointed receiver as delineated in Exhibit "A" Section 3. That this authorization is for one year and Offerman & King, L.L.P. shall coordinate its activities with the City Attorney, with a minimum of two hours per week at $175 per hour unless the amount of hours is requested to be changed by the City Attorney and by the City Manager. Section 4. That the cost to the City shall not exceed $25,000 without additional approval of the City Council. z.pr15216 Section 5. That an authorized representative of Offerman & King, L.L.P. will sign the Resolution agreeing to the terms thereof. Section 6. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2009, at a Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Mayor Councilmembers _~ NOES: MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM: ~.,,~ ~4' ~ ~ -.- TY ATTORNEY z.pr15216 APPROVED FOR ADMINISTRATION: CITY MANAGER APPROVED AS TO THE AVAILASILTY OF FIINDS: ASSISTANT CITY MANAGER/FINANCE DIRECTOR AGREED TO: OFFBRMAN ~ RING, L.L.P. BY: DATE: z.pr15216 EXHIBIT ~~A" Garry A. OffemranOV"-zonal Lames N. King Iohmty Taylor Board Certified - Tcxas Board of Leval Specialization: t Consumer Bankruptcy Law OFFERMAN & KING, L.L.P. Anomeys at Law 6420 Wellington Place Beaumont, Texas 77706 April 6, 2008 VIA EMAIL• MAItKCa~PORT ARTIIUR:NET City of Port Arthur c!o Mark Sokolow Re: Proposal for the City of Port Arthur to employ Offerman & King, L.L.P: to assist in the collection of unpaid assessments Ladies & Gentlemen: Of Counsel: Richard Battaglia Telephone: (409) 860-9000 Fax: (409) 860-9799 It is our understanding that the City of Port Arthur (the "City") is facing the situation faced by so many creditors -the non-payment of outstanding balances. Based on our conversation with the City Attorney, it is our understanding that one of the City's primary areas of concern is the non-payment of assessments made by the Ciry against property owners for the maintenance of property, including but not limited to the mowing of weeds and the demolition of unsafe structures. Offerman & King, L.L.P. ("O&K") specializes in serving the needs of creditors throughout the State of Texas, and our firm stands ready and willing to assist the City in streamlining its internal processes and in improving collection rates through the collection of money judgments granted in favor of the City. Consulting Services Although weed or demolition assessments aze a little different from the typical account receivable, it is fair to say that many of the principles of traditional accounts receivable management apply wrath equal force to the collection of these assessments. The first and most important rule of thumb of accounts receivable management is that as accounts age, collection rates will decrease. Given this, streamlining the City's internal processes of handling and collecting assessments becomes a key factor in decreasing the number and amount of unpaid assessments due to the City. O&K is willing to provide consulting services at the rate of $210.00/hour. Alternatively, O&K is willing to provide consulting services at the rate of $175.OOlhour, with the stipulation that O&K will be paid for at least two (2) hours of services per week for a period of at least one (1) yeaz. Legal Services In addition to the consulting services referenced above, O&K is willing to provide legal services to the City to aid in the collection of unpaid assessments. It is my understanding that the City has worked out an arrangement with legal counsel that represents the City in tax suits whereby a money judgment in favor of the City is included in the final judgment in the tax suit. Given that the City already has in place a mechanism to obtain money judgments on unpaid assessments, it is our opinion that it would not be cost effective for the City to pursue independent legal action in the civil courts against property owners except in exfreme circumstances. In the event that the City finds it necessary to take independent legal action against property owners, O&K is willing to represent the City in seeking money judgments against property owners at the rate of $210.00/hour, plus costs and expenses. For cases in which the City has obtained a money judgment, it is our opinion that the most cost efficient way for the City to enforce its judgments is through having a receiver appointed to take possession of and liquidate the non-exempt assets of the judgment debtors. Our firm's attorneys are willing to serve as court-appointed receiver in these cases, and our firm will agree to due so for a fee of 350.00, plus twenty-five percent (25%) of the gross amount collected. Conclusion O&K has assisted creditors throughout the State of Texas in collection millions of dollazs in unpaid debt, and we stand ready and willing to assist the City of Port Arthur in collecting its outstanding assessments. We would welcome the opportunity to address any questions the City may have in this regard and look forwazd to hearing from you. O&K will conduct a thorough review of the City's existing processes to identify: 1. Areas where improved communications between departments will eliminate delays in the collection process; 2. Areas where improved training will eliminate delays in the collection process; and Areas where the application of additional resources will eliminate delays in the collection process. O&K will assist the City in streamlining the collection process by working with the City to develop and implement processes that will: Improve communications amongst the City's departments and personnel; 2. Improve communications between the City and legal counsel representing the City in tax suits; 3. Improve communications between the City and property owners against whom assessments have been made; 4. Create standazdized guidelines to quickly identify and implement the proper course of action for individual accounts, including the collection of money judgments entered in favor of the City. 5. Develop and use standazdized forms for each step of the collection process; and 6. Create repayment plans to assist property owners in resolving delinquent assessments; and 7. Create beneficial working relationships with outside organizations to facilitate the collection of delinquent accounts. O&K will assist the City in streamlining the collection process by training personnel to: Locate property owners, including the heirs of deceased owners; 2. Assess the circumstances of property owners to quickly identify solutions regazding delinquent assessments; and 3. Work and communicate effectively the City's departments and personnel, legal counsel representing the City, and outside organizations to facilitate the quick and efficient collection of delinquent accounts.