City inches closer to deal with collection agency

The city council is moving closer to an agreement with a company to perform collection services for the city.
Per the agreement the city would pay Collect-Tek $3,700 to collect 250 accounts. The city must pay the fee up front and is guaranteed to return four times the amount. The company agrees to pay a 400 percent return on accounts that are not collected within the first 120 days. At that point the city can decide to push the collection into what is called the company’s secondary phase for collection. However, any monies collected must be split with the company.
The company also adds the collection fee on top of what the customer owes, so the full amount will be paid to the city, not the company according to the agreement.
City Collector Marilyn O’Dell gave her support for the company and said she had checked references with the cities of Lexington and Kearney.
Before agreeing to a contract, city council members wanted city attorney Brian Hall to review the contract even though he is the attorney of both the before mentioned cities.
City Administrator Rick Childers said Tuesday night that Hall reviewed the contract and had some minor concerns. He also said that Hall told him he did not review any of the contracts with the other two cities. Childers said Kearney was so happy with the service that they have enlisted the company for an additional 1,000 accounts.
The council is expected to approve the agreement at their next meeting March 24.

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