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HomeMy WebLinkAboutItem 06.fSeptember 13, 2011 Supporting Information AGREEMENT WITH CHECK DIVERSION PROGRAM, LLC Proposed Action Staff recommends adoption of the following motion: Move to approve agreement with Check Diversion Program, LLC (CDP Services). Passage of this motion will allow CDP Services and the Lakeville Police Department to implement a worthless check diversion program. Overview This program is governed by Minnesota Statutes and will provide an alternative to criminal prosecution for individuals who issue worthless checks to citizens and local businesses that are defined as non - sufficient funds checks or account closed checks, provided full restitution is made, all service fees are paid and the required training class is completed. This program will provide the victim full restitution from the offender, along with financial training for the offender. Offenders may voluntarily participate or may be court ordered to enroll in the program. Primary Issues to Consider • This agreement will be in effect for three years. The City of Lakeville will have no financial liability. CDP Services will bear the financial liability for all aspects of its operations by this agreement. This agreement may be terminated at any time upon 30 days written notice. • Minnesota Statutes • Financial Services Regulatory Relief Act of 2006 Thomas E. Vonhof Chief of Police Item No. Financial Impact: $_NA Budgeted: Y/N Source: Related Documents (CIP, ERP, etc.): Notes: CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT Contractual Agreement: This Agreement is made and entered into this day of September 2011, by and between the City of Lakeville ( "Jurisdiction" hereafter), State of Minnesota, and Check Diversion Program, LLC ( "CDP Services" hereafter) of 415 Main Street, Red Wing, Minnesota, 55066. 2. Purpose: The purpose of this Agreement shall be to implement a Worthless Check Diversion Program (Minnesota State Statute 628.69 attachment At for the Jurisdiction. This program provides an alternative to criminal prosecution of individuals who issue worthless check(s) to citizens, merchants and businesses. The program will assist the Jurisdiction and its law enforcement agency in processing worthless checks. CDP Services will also assist in the criminal investigation and prosecution of individuals issuing worthless checks. This program will provide that the victim is paid full restitution from the offender who has issued the worthless check along with financial training for the offender (offender defined in section 4, B). Individuals who have written a worthless check(s) may voluntarily participate or who have been court ordered to enroll in this Worthless Check Diversion Program. By enrolling into the Worthless Check Diversion Program offenders will be diverted (Minnesota State Statute 628.69) from criminal or civil prosecution, provided they make full restitution, pay all service fees (see section 4, D) and complete required training class. CDP Services will assist the Jurisdiction Attorney's office or designee and victims of worthless checks in working with individuals writing these worthless checks to obtain full restitution for victim(s) that are defined as non - sufficient funds (NSF) checks or account closed (AC) checks. 3. Contract Terms: This Agreement shall be in force for a period of three (3) years from the beginning date of Agreement signed by the Jurisdiction and shall be automatically renewed for one year terms. Page 1 1 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT 4. Definitions: A. Victim — the business or person who accepted a worthless check for goods or services and suffered the financial loss. B. Offender — the individual or participant who passed the worthless check(s) and has enrolled in the Worthless Check Diversion Program voluntarily or has been ordered by the Court to complete the Worthless Check or other diversion programs. C. Restitution Recovery — Dollar recovery of face value (or written amount) of a dishonored check(s), property damage, as well as administrative fees, civil penalties, bank fees as appropriate and law enforcement costs. Worthless Check Diversion Fees Defined 1) Financial Training Class Fee, 4 -6 Hours $140.00 2) NSF Merchant Service Fee (Gifted to CDP Services, as Provided in Section 8, A) $ 30.00 3) Individual Requests a Payment Plan Beyond 30 Days (One -time Account Set -up Fee) $ 25.00 4) Late Payment Fees (Discretion Used and Not Accumulative Over $75.00) $ 25.00 5) Internet /Electronic NSF Return Processing Fee (Returned Restitution Payment as NSF) $ 32.50 6) Creating a monthly payment book or pre- authorized debit payment book (Optional) $ 15.00 7) Credit Card Payment Processing Fee ((Optional) $ 7.50 8) Electronic Check Processing Fee (Optional) $ 7.50 9) Rescheduling of Training Class Fee (Number Times Permitted is Three Times) $ 20.00 10) Home Study CD or online training $ 20.00 11) Mailing fees incurred by CDP services (US Postal Rates) 5. Jurisdiction Requirement: The Jurisdiction's Attorney's Office (including designated personnel) retains the sole discretion and authority (as defined in the "Financial Services Regulatory Relief Act of 2006 attachment A) to decide which worthless check(s) submissions shall be placed in the Worthless Check Diversion Program and which shall be retained for criminal investigation and /or prosecution. 6. CDP Requirement: CDP Services agrees to provide the following professional services to the Jurisdiction in a timely and efficient manner: A. Perform daily operations and management of all clerical and accounting functions related to processing worthless check writers (NSF checks and account closed checks) submitted by the Jurisdiction's Worthless Check Diversion Program. B. Generate letters to worthless check writers and follow through with respect to processing payments for restitution. Disbursement recovered restitution funds for the Page 1 2 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT victims. Restitution also includes payment of all administrative fees, and the payment of CDP Services education training class fees. (See Section 4, D). All offender payments shall be deposited into a designated bank trust account on behalf of the Jurisdiction Victims. This account and all its funds are to be disbursed as defined in section 4 item "C" of this agreement. C. Provide necessary correspondence and follow -up, a needed, by telephone and responding to inquiries of victims and offenders. D. Properly maintain all physical files, financial records, documentation, reports, computer files, etc. for a period of no more than six (6) years. E. Provide voluntary in person, online, or home study check offender financial management education classes with meaningful information and lessons for offenders regarding criminal consequences of property crimes, as well as focus on personal management of checking accounts and basic budgeting F. Schedule offender training classes and /or provide home study course. G. Maintain records of offenders making restitution, payment of fees, attendance records of offenders completing as well as failing to attend the training session. H. Maintain records of payment to the victims. Provide reports to the Jurisdiction; annual offender report, completed offender classes, and related reports as required by the Jurisdiction and law enforcement. J. Worthless check writers who fail to respond to the Worthless Check Program or refuse to voluntarily enroll into the program or to complete the training program as voluntarily agreed upon or by court ordered and /or who fails to make full restitution are considered to be non - compliant individuals. These individual listings will also be made available to the Jurisdiction and its designees for follow -up and for further review and appropriate action. K. CDP Services on behalf of the Jurisdiction will provide reports as required by MN Statue 628.69 Subd 7. CDP to provide letters for Jurisdiction approval and sign off 7. Victim recovery: A. Face value of the worthless check(s) submitted and related victim expenses (bank fees and any mailing cost) identified at the time the worthless check is submitted to CDP Services and when recovery of restitution is made from the individual responsible for the worthless check. Page 1 3 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT 8. Check Diversion Program governed by (attachment A): A. Minnesota Statutes, section 604.113. B. Minnesota Statute 609.535 C. Minnesota Statute 628.69 D. Financial Services Regulatory Relief Act of 2006 9. Jurisdiction has no financial liability: It is understood and agreed by and between the parties that CDP Services will bear all financial liability for all aspects of its operations under this Agreement. 10. Termination of this agreement: A. This Agreement may be terminated at any time, without cause, by either party upon 30 days written notice to the authorized agent of the Jurisdiction or CDP Services. B. This Agreement may be immediately terminated by the Jurisdiction at any time if the Jurisdiction determines that CDP Services, (see section 18 of this Agreement) is acting, or has acted at any time during the term of this Agreement, in direct and clear violation of state or federal law. 11. Amendments or Material Modification: All amendments or modifications to this Agreement must be in writing and approved by both parties. Email may be an acceptable means of communication. (fin in maUina address) Lakeville Police Department 9237 183 Street West Lakeville, MN 55044 Attn: Det. Sgt. Mike Sheady Check Diversion Program, LLC 415 Main Street Red Wing, MN 55066 Att: Scott Adkisson 12. Jurisdiction Has No Obligation to Victims: CDP Services and victims who participate in this program fully understand that the Worthless Check Diversion Program is providing a public service and the Jurisdiction is held harmless and has no liability to make recovery of any check(s) or obligated to take criminal action against offender(s). Page 1 4 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT 13. Criminal Action: The Jurisdiction's Attorneys office may choose to prosecute offender(s) at its sole discretion. In the case where the offender fails to participate or complete Agreements with CDP Services and victim(s) the Jurisdiction shall determine appropriate action to take with the worthless check writer, including criminal prosecution or other action determined by the Jurisdiction's Attorney's office. 14. Hold Harmless and Indemnification: CDP Services and its subcontractors shall save and protect, hold harmless, indemnify and defend the Jurisdiction and its Attorney's Office including their officers and employees against any and all claims, causes of action, suits, liabilities, losses, charges, damages or costs and expenses arising from or allegedly arising from, or resulting directly or indirectly from any professional errors and omissions and /or negligent or willful acts or omissions of CDP Services and its employees and agents, in the performance of this Agreement. 15. CDP SERVICES as Independent Contractor: A. Nothing contained in this Agreement is intended to or shall be construed in any manner as creating or establishing the relationship of employer /employee between the parties. CDP Services shall at all times remain as independent contractor with respect to the services to be provided under this Agreement. B. The Jurisdiction shall be exempt from payment of all unemployment insurance, FICA, retirement, life and medical insurance and workers' compensation insurance for any and all of CDP Services employees and agents. Payment of insurance premiums, tax withholding, and all other benefits are strictly CDP Services responsibility. 16. Subcontractor: CDP Services shall retain the right to subcontract any portion of the work to be performed under this Agreement. CDP Services may specifically assign processing of checks or payment processing operations (credit, check, debit electronic check, remote deposit, wire transfers, check representment processors, invoicing or billing processors) to increase efficiencies. In addition CDP Services may assign this complete Agreement to a new company, provided the Jurisdiction Attorney agrees to the assignment. CDP Services shall be the sole responsible party for any and all expenses relating to an assignment of this Agreement Page 5 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT 17. Data Practice: CDP Services agrees to comply with the Minnesota Government Data Practices Act and all other applicable state and federal laws relating to data privacy or confidentially. CDP Services will immediately report to the department head signing this agreement any request from third parties for information relating to this agreement. The Jurisdiction agrees to promptly respond to inquiries from CDP Services concerning data request. CDP Services agrees to hold the Jurisdiction, its officers, department head and employees harmless from any claims resulting from the CDP Services unlawful disclosure or use of data protected under state and federal laws. 18. Compliance with the Law: CDP Services agrees to abide by the requirements and regulations of The American with Disabilities Act of 1990 (ADA), the Minnesota Human Rights Act (Minn. Stat. C.363). Civil Rights Ordinance (Ch. 139), and Title VII of the Civil Rights Act of 1964. These laws deal with discrimination based on race, gender, disabilities, religion, and with sexual harassment, the Jurisdiction agrees to promptly supply all necessary clarifications. Violation of any of the above can lead to the termination of this Agreement. 19. Entire Agreement: This entire Agreement supersedes any and all other Agreements, either oral or written, between the parties hereto with respect to the subject matter hereof, and contains all of the Agreements between the parties with respect to said matter. Each party to this Agreement acknowledges that no representations, inducements, promises, or Agreements, oral or otherwise, have been made by either party which is not embodied herein, and that no other Agreements, statements, or promises not contained within this Agreement shall be valid or binding. All provision contained within this Agreement shall be valid or binding. The laws of Minnesota and the United States of America shall govern all provisions within this Agreement. 20. Audits and Inspections: The Jurisdiction's Attorney's office or designated representative or other governmental agency exercising regulatory function over the business activities, while exercising reasonable, non - disruptive procedures, may inspect CDP Services records at anytime. 21. Insurance: CDP Services and /or its subcontractors agree to provide and maintain, at its own cost and at all times during its performance under this contract until completion of the work, such liability insurance coverage as is set forth below, and to otherwise comply with the provision that follow: Page 6 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT A. Workers Compensation: Workers Compensation insurance in compliance with all applicable statutes. B. Auto Insurance (Owned and un -owned auto) C. General Liability: "Commercial General Liability Insurance" (Insurance Service Office policy form title), or equivalent policy form, providing coverage on an "occurrence ", rather than on a claims made basis, the policy for which shall include, but not limited to, coverage for bodily injury, property damage, personal injury, contractual liability (applying to this contract), Independent Contractors, and Products - Completed Operations Liability. Coverage for explosions, collapse and underground Hazards shall not be included. Such a policy shall name the Jurisdiction as additional insured hereunder, and shall apply on a primary basis with respect to any similar insurance maintained by the Jurisdiction, which other insurance of the Jurisdiction, if any, shall apply excess of CDP Services insurance and not contributed therewith.CDP Services Such Commercial General Liability insurance policy shall provide a combined single limit in the amount of at least $2,000,000 (two million) Each Occurrence, applying to liability for bodily injury and property damage, and a combined single limit of at least the same amount applying to liability for Personal injury and Advertising injury. Such minimum limits may be satisfied by the limit afforded under Firm's Commercial General Liability Insurance Policy, or by such Policy in combination with limits afforded by a Umbrella or Excess Liability Policy (or policies); provided, that the coverage afforded under any such Umbrella or Excess Policy is at least in all material respects as broad as that afforded by the underlying Commercial Liability Policy, and further that the Jurisdiction is included as an additional Insured thereunder. Such Commercial General Liability Policy and Umbrella or Excess Liability Policy (or policies) may provide aggregate limits for some or all of the coverage afforded thereunder, so long as such aggregated limits are not at any time during which such coverage is required to be maintained hereunder reduced to less than the required Each Occurrence limited stated above, and further, that the Umbrella or Excess Liability provides from the point that such aggregate limits in the underlying Commercial General Liability Policy become reduced or exhausted. An Umbrella or Excess Liability Policy which "drops down" to respond immediately over reduced underlying limits, or in place of exhausted underlying limits, but subject to a deductible or "retention" amount, shall be acceptable in this regard so long as such deductible or retention amount does not cause the firm total deductibles or retention for Each Occurrence to exceed $10,000. D. Professional Liability: Professional or ( "Errors & Omissions ") Liability Insurance in the amount of at least $1,000,000 Each Occurrence (or "Wrongful Act" or equivalent) and if applicable, Aggregate, covering CDP Services Liability for negligent acts. errors, Page j 7 CHECK DIVERSION PROGRAM, LLC WORTHLESS CHECK DIVERSION AGREEMENT or omissions in the performance of professional services in connection with this Agreement. CDP Services Professional Liability Insurance may afford coverage on an occurrence basis or on a claims basis. It is however, acknowledged and agreed by the CDP Services that under claims -made coverage changes in insurers or in insurance policy forms could result in the impairment of the liability insurance protection intended for the Jurisdiction hereunder. CDP Services therefore agrees that it will not seek or voluntarily accept any such change in its Professional Liability Insurance coverage if such impairment of the protection for the Jurisdiction could result: and further, that it will exercise its right under any Extended Reporting Period" ( "tail coverage ") or similar claims -made policy option if necessary or appropriate to avoiding impairment of such protection. 22. CDP Services further agrees that it will, throughout the entire period of three (3) years: 1, Advise the Jurisdiction on any intended or pending change in Professional Liability insurance or in policy forms, and provide the Jurisdiction with all pertinent information that the Jurisdiction may reasonably request to determine compliance with this paragraph. 2. Advise the Jurisdiction of any claims or threat of claims that might reasonably be expected to reduce the amount of such insurance remains available for the protection of the Jurisdiction. THEREFORE: IN WITNESS OF, the parties have executed the Agreement as of the data firs written above. Check Diversion Program, L C, (CDP Services) City of Lakeville By By sson , Presi.ent) Mark Bellows, Mayor Approved as to form: Roger Knutson, City Attorney Attachment A: Laws Attested Charlene Friedges, City Clerk Page 8