HomeMy WebLinkAboutE-14 Staff Report - Nationwide Cost Recovery Services AgreementCONSENT ITEM
E-14
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: LOUIE F. LACASELLA, MANAGEMENT ANALYST
DATE: MARCH 7, 2016
SUBJECT: REQUEST TO ENTER INTO A LETTER AGREEMENT WITH NATIONWIDE COST
RECOVERY SERVICES FOR ADMINISTRATION OF THE FORECLOSED AND
ABANDONED PROPERTIES PROGRAM AND ADOPT RESOLUTION NO. 2016-C23 FOR
ANNUAL REGISTRATION FEE
SUMMARY:
Residential properties going through foreclosure often end up vacant, neglected, and abandoned for prolonged
periods of time. The lack of security and maintenance of abandoned residential properties can result in many
detrimental effects for the community, including unsightly appearance, blighted residential neighborhoods,
increased crime, and reduced property values for surrounding residences. Article XVII of Chapter 14 of the
Azusa Municipal Code (Sections 14-556 through 14-566) established an abandoned property and registration
program as a mechanism to protect residential neighborhoods from becoming blighted through the lack of
maintenance and security of abandoned properties. Due to staff shortages and other delays, Staff has determined
that the best way to properly implement and administer the program is to contract for the necessary services. This
action approves a Letter Agreement with Nationwide Cost Recovery Services (NCRS) to administer an
abandoned property registration program, as established by Article XVII. Furthermore, this action approves a
Resolution No.16-C23, establishing an annual registration fee per property charged to the bank lenders to cover
the cost of administering the program.
RECOMMENDATIONS:
Staff recommends that the City Council take the following actions:
1)Waive the competitive bidding process as authorized under Azusa Municipal Code Section 2-539; and
2)Determine Nationwide Cost Recovery Services (NCRS) to be a sole source vendor for the unique services
required for the administration of the City’s abandoned property registration program, as authorized under
Azusa Municipal Code Section 2-520(b); and
3) Approve a Letter Agreement with NCRS to assist in the administration of the abandoned property
registration program; and
4)Authorize the City Manager to execute the agreement, in a form acceptable to the City Attorney, on behalf
of the City; and
5)Approve Resolution No. 2016-C23 adopting an annual registration fee charged to the bank lenders to cover
the cost of administering the abandoned property registration program.
APPROVED
COUNCIL MEETING
3/7/16
Approve Letter Agreement with Nationwide Cost Recovery Services
March 7, 2016
Page 2
DISCUSSION:
Properties in the process of foreclosure often end up vacant, neglected, and abandoned for prolonged periods of
time. For many cities, the result of such neglect by property owners is an increased number of residences with
dry, dead or overgrown weeds and vegetation; trespassers, vandals and thieves entering the property; graffiti
vandalism of both the exterior and interior of the dwelling; accumulation of junk, debris, trash, personal items;
and pools with polluted water and/or mosquito larvae. The lack of security and maintenance of abandoned
residential property can result in other detrimental effects, including unsightly appearance, blighted residential
neighborhoods, the lowering of surrounding property values, and increased crime. The detrimental effects of
neglected properties can also discourage potential buyers from purchasing homes in neighborhoods adjacent to
affected areas.
NATIONWIDE COST RECOVERY SERVICES (NCRS)
NCRS is recognized as a leading expert in the area of municipal foreclosure registration programs. In late 2014
and again in early 2015, the City of West Covina issued a Request for Proposals (RFP) for services to administer
its Foreclosure Ordinance program. For both RFPs issued by West Covina, NCRS was the sole respondent. West
Covina ultimately awarded NCRS the contract. Six (6) other cities (Carson, Eastvale, El Monte, Pico Rivera,
Moreno Valley, and South El Monte) currently use NCRS’ services and report high satisfaction with NCRS. In
addition, last year the City of Moreno Valley also determined NCRS to be uniquely qualified and currently the
only company found to specialize in registration of foreclosed properties within the state. NCRS uses proprietary
technologies to provide a service integrating Registrations, Monitoring, and Compliance (including collections).
PROPOSED LETTER AGREEMENT WITH NCRS
Under Section 2-520(b) in the Azusa Municipal Code, when the City determines that only one vendor “with
singular characteristics or performances capabilities” can provide “unique commodities or services” to the City,
the purchase of those services is deemed a “sole source” purchase” and is exempt from the City’s competitive
bidding requirements. In addition, the City Council has discretion under Section 2-539 of the Municipal Code to
waive the City’s purchasing procedures to fit a specific contract when: (1) such waiver is not in violation of state
or federal law; (2) unforeseen circumstances justify an exception to following the purchasing procedures; (3) the
City will not be prejudiced by such a waiver; and (4) a waiver is in the best interest of the City and its operations.
Based on West Covina’s experience of NCRS being the only respondent to two (2) RFPs and the high satisfaction
reported by West Covina and other cities currently using NCRS’ services, Staff believes that both sections of the
Azusa Municipal Code cited above are applicable and that a determination that NCRS is a “sole source” provider
of the services being sought is justifiable.
Implementation of the proposed letter agreement with NCRS would allow the City to have banked-owned
properties inspected, monitored, all fines/fees collected, and have the properties comply with the Azusa Municipal
Code. Benefits of the services provided by NCRS include:
• Minimized neighborhood blight.
• Increased property value and quality of life for residents.
• No upfront cost to the City - NCRS is paid based on percentage collected.
• Reduction in Staff time and duties.
Approve Letter Agreement with Nationwide Cost Recovery Services
March 7, 2016
Page 3
RESOLUTION ESTABLISHING ANNUAL REGISTRATION FEE
The administration and implementation of the abandoned property registration program will incur additional
costs. Generally, cities with this type of program adopt a resolution establishing an annual registration fee. The
amount of the fee is based on surveys of the registration fee charged by other cities currently implementing an
abandoned property registration program within the state and upon the actual cost of administrating and enforcing
the applicable ordinance.
Azusa Municipal Code Section 14-559(g) (“Registration”) permits the Council, by resolution, to establish an
annual registration fee to support the administration of the abandoned property registration program. The annual
fee and registration will be valid for one (1) year from the date of registration.
The following chart summarizes the registration fees charged by other cities for their abandoned/foreclosed
property registration programs:
CITY ANNUAL REGISTRATION FEE
PER PROPERTY
Carson $450
Eastvale $547
El Monte $414
Moreno Valley $400
South El Monte $575
West Covina $375
AVERAGE $460
Staff is proposing that the City’s annual registration fee, per property, be set at $500. The proposed fee amount is
comparable with what other cities are charging and will be sufficient to reimburse the administration cost for both
NCRS and the City.
FISCAL IMPACT:
The program is designed to be self-supporting. The letter agreement between the City and NCRS will not impact
the General Fund and will be solely funded by fifty percent (50%) of the collected registration fee going to the
contractor. The remaining fifty percent (50%) of the fee will go to the City to reimburse costs for Staff to provide
administrative support and general oversight of the program.
Prepared by: Reviewed and Approved:
Louie F. Lacasella Troy L. Butzlaff, ICMA-CM
Management Analyst City Manager
Attachments:
1) Article XVII of Chapter 14 – Azusa Municipal Code
2) City of West Covina Award of Bid – Foreclosure Ordinance Services
3) Resolution No. 2016-C23 Adopting Annual Registration Fee
4) Letter Agreement with Nationwide Cost Recovery Services
ATTACHMENT 1
ATTACHMENT 2
ATTACHMENT 3
RESOLUTION NO. 2016-C23
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, SETTING THE FEE AMOUNT FOR ANNUAL
REGISTRATION OF VACANT OR ABANDONED RESIDENTIAL
PROPERTIES WITHIN THE CITY OF AZUSA, PURSUANT TO
ARTICLE XVII, CHAPTER 14, OF THE AZUSA MUNICIPAL CODE
WHEREAS, the presence of vacant, abandoned real property can lead to neighborhood
decline; create an attractive public nuisance; contribute to lower property values; and discourage
potential buyers from purchasing homes adjacent to or in neighborhoods with vacant abandoned
residences; and
WHEREAS, many vacant abandoned real properties are the responsibility of out of area or
out of State lenders and/or trustees; and
WHEREAS, in many instances the lender and/or trustee fails to adequately maintain and
secure these vacant residences; and
WHEREAS, the City has an obligation to preserve the health, safety and welfare of
residents and the community, and to the extent possible, protect neighborhoods from declining
property values, aesthetic decay, and loss of character; and
WHEREAS, the City has established a registration program for real properties in
foreclosure and abandonment to assist City Staff to enforce maintenance and safety provisions of
the Azusa Municipal Code; and
WHEREAS, Sec. 14-559(g), Article XVII of the Azusa Municipal Code authorizes the
City Council to adopt by resolution an annual registration fee for the implementation of the City’s
abandoned property registration program; and
WHEREAS, under State law, cities may set regulatory fees to recover the costs associated
with the administration of programs which protect public health and preserve the welfare of the
community.
WHEREAS, the City Council held a public meeting, considered the testimony offered
therein, and has determined that the annual registration fee set forth below represents the
reasonable amount of the City’s costs of implementing and enforcing the abandoned property
registration program set forth in Article XVII of Chapter 14 of the Azusa Municipal Code.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Azusa
does hereby find, determine, and declare as follows:
SECTION 1. Setting of Annual Registration Fee. The annual registration fee to register
vacant or abandoned residential properties, pursuant to Article XVII, Chapter 14 of the Azusa
Municipal Code, is Five Hundred Dollars ($500) per property. The fee and registration shall
be valid for one (1) year from the date of registration. Registration fees will not be prorated.
SECTION 2. Certification. The City Clerk shall certify to the passage of this Resolution.
SECTION 3. Effective Date. This Resolution shall take effect immediately upon its
adoption.
PASSED, APPROVED and ADOPTED this 7th day of March, 2016.
_____________________________________
Joseph Romero Rocha
Mayor
ATTEST:
_____________________________________
Jeffrey L. Cornejo, Jr.
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )ss.
CITY OF AZUSA )
I HEREBY CERITFY that the foregoing Resolution No. 2016-C23 was duly adopted by
the City Council of the City of Azusa at a regular meeting thereof, held on the 7th day of March,
2016, by the following vote of Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
_____________________________________
Jeffrey L. Cornejo, Jr.,
City Clerk
APPROVED AS TO FORM:
____________________________________
Best Best & Krieger, LLP
City Attorney
ATTACHMENT 4