HomeMy WebLinkAbout6.f. Financial Crimes Services - Worthless Check Program AgreementAGENDA ITEM: Financial Crimes Services Worthless
Check Program Agreement
A ENDA SECTION:
VA WU
PREPARED BY: Gary Kalstabakken, Chief of Police
AGENDA NO. b.f.
ATTACHMENTS: Program Agreement
APPROVED BY:
RECOMMENDED ACTION: Motion to approve an agreement with the Financial Crimes
Services Worthless Check Program and to authorize the Chief of Police to sign and
execute the necessary agreements and documents to implement this program
4ROSEMOUNT
City Council Meeting: May 6, 2008
CITY COUNCIL
EXECUTIVE SUMMARY
ISSUE
Worthless check cases impact many businesses and individuals within the community. The Financial
Crimes Services organization operates a program to address these cases in an effective and efficient
manner.
BACKGROUND
The issuance of worthless checks is a crime. Worthless checks are checks that are written by the account
holder on accounts that are either closed or have insufficient funds to cover the check written. When
these types of checks are written, the recipient must follow a specific process in an effort to have the
account holder pay the amount of the check plus any penalty imposed or if payment is not received to
have the case prosecuted as a theft.
While many businesses use firms that attempt to recover losses from these worthless checks, those service
providers treat the process as .a civil matter and only attempt to recover the check funds. Financial Crime
Services (FCS) is different, their program does first attempt to recover the cost of the checks; however,
they also work with law enforcement to assist in the prosecution of cases. Because FCS has contracts with
law enforcement agencies in many communities across jurisdictional boundaries, they are also effective in
tracking offenders and aggregating charges when prosecution is pursued.
A presentation will be made to the business community regarding this service at the May 13, 2008
Chamber meeting. FCS and Police Department staff will be at the presentation to explain the services and
to answer questions.
Over the last three years, the Police Department has handled an average of fifteen (15) worthless check
cases annually. There is no cost to the City for contracting with FCS and there is no direct cost to
business owners either.
Council is asked to authorize the execution of an agreement with FCS and the program will be
implemented after the presentation to the business community.
WORTHLESS CHECK PROGRAM AGREEMENT
FOR THE
CITY OF ROSEMOUNT, MN
1. Contractual Agreement This Agreement is made and entered into this
day of 2008, by and between the City of
Rosemount, State of Minnesota, and Financial Crimes Services "FCS"
hereafter), of 406 Main Street Suite 200, Red Wing, Minnesota 55066 -2398.
Purpose The purpose of this Agreement shall be to implement a Worthless
Check Diversion Program (Minnesota Statute, §628.69) for the City of
Rosemount, Minnesota.
This program provides an alternative to criminal prosecution of individuals who
issue worthless check(s) to merchants and businesses. The program will assist the
Rosemount Police Department and other law enforcement agencies in obtaining
records to assist in the 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 first -time offender. First -time offenders who participate in this
program will be diverted (also known as Pre -Trial Diversion Program) from
prosecution. FCS will assist the City Attorney and Victims in obtaining full
restitution for victims of non sufficient funds (NSF) checks and account closed
(AC) checks. FCS is responsible for managing pertinent case files and
conducting financial education classes for first time offenders.
3. Contract Terms This Agreement shall be in force for a period of three (3) years,
beginning upon the date of city approval. Termination provisions of this
Agreement are provided in sections 9 and 11.
4. Definitions:
A. Victim the business or person who accepted a dishonored check for
goods or services and suffered the financial loss. The victim must be in
good standing with the City of Rosemount licensing Department.
B. Offender the individual who has enrolled in the Worthless Check
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.
D. Financial Education Class Fees The fees associated with the training
classes the offender attends as part of their restitution Agreement.
Worthless checks 100.00
5. City Support The following is needed for the implementation of the program:
A. City Attorney and Police designees will assist FCS in organizing and
implementing the restitution program with courts and law enforcement personnel. The
designee will also provide guidance in publicizing the program to the business
community.
B. City Attorney and Police designees will conduct as needed meetings with key
FCS staff to offer procedural guidance, evaluate program performance, and provide
support and direction.
C. City Attorney and Police Department shall implement departmental policies
that are consistent with the fulfillment of the terms of this Agreement.
D. Police designee shall support FCS in reviewing checks received in the program
daily that are posted on the web site.
6. PerformanceARreement FCS agrees to provide the following professional services
to the City of Rosemount in a timely and efficient manner. FCS will provide the
following level of administrative services and offender education classes:
A. Perform daily operations and management of all clerical and accounting
functions related to offenders of NSF checks to be included in the Rosemount
Worthless Check Program.
B. Generation of demand notices to worthless check writers, and follow through
with respect to the collection and disbursement of victim restitution, administrative
fees, and FCS education training class fees.
C. Provide necessary correspondence and follow -up telephone inquiries to 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 (unless mandated by state statutes) worthless check offender
financial management education classes.
F. Conduct classes designed to teach and provide meaningful information and
lessons to offenders on criminal consequences of Property Crimes, as well as focus on
personal management.
G. Scheduling of all classes. The training will require 4 hours of class time.
Sessions will be held in the City of Rosemount and/or surrounding cities. These
training sessions may be jointly held with other metro communities. Class size to not
exceed 45 attendees.
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11. Maintain records of offenders making restitution, payment of fees, attendance
records of offenders completing as well as failing to attend the training session.
I. Maintain records of payment to the victims and City of Rosemount fees on a
monthly basis.
J. Provide reports to the City of Rosemount; annual, quarterly, monthly financial
revenues, completed offender classes, and related reports as required by the City and
law enforcement.
K. Offenders who refuse to enroll into the program or fail to complete the
program will be reported to the City of Rosemount for prosecution.
7. Program Operational Fees/Revenue:
A. Victim The victim will be reimbursed any money recovered from the
offender.
B. Check Diversion will be governed by
1. Minnesota Statutes, section 604.113 subdivision 2, paragraph (a)
allows for the collection of a service charge on dishonored checks with
a not to exceed value of $30.00.
2. Minnesota Statute 609.535
3. A fee of $20.00 will be assessed to an offender who fails to appear at
education class and has to re- schedule for the class. This fee will be
assessed each time the offender has to re- schedule. This may occur up
to three (3) times before referring the offender to the Police as failing
to appear.
8. Non Compete During the term of this agreement the City shall not establish a
competing worthless check diversion program.
9. Agreement Date This Agreement shall remain in effect from 2008,
to 2011. This agreement shall automatically renew for
successive one -year terms unless cancelled in writing upon 30 days notice.
10. City has no financial liability It is understood and agreed by and between the
parties that FCS and/or any subcontractor will bear all financial liability for all
aspects of its operations under this Agreement.
11. Termination of this agreement:
A. This Agreement may be terminated at any time by either party upon 30 days
written notice to FCS or the authorized agent of the City. This Agreement
may be terminated by FCS upon 30 days written notice to the authorized agent
of the City if FCS determines that it cannot conduct or administer the
Worthless Check program because program- related income does not equal
program costs.
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B. This Agreement may be immediately terminated by the City at any time if the
City determines that FCS, (pursuant to section 16 of this Agreement) is acting,
or has acted at any time during the term of this Agreement, in violation of
state or federal law.
12. Amendments or Material Modifications All amendments or modifications to
this Agreement must be in writing and approved by both parties.
13. No City Obligation to Merchants FCS and victims who participate in this
program fully understand that the Worthless Check Program is providing a public
service and the City of Rosemount is held harmless and has no liability to make
recovery of any check(s) or obligated to take criminal action against offender(s).
14. Criminal Action The City Attorney's Office for the City of Rosemount may
choose to prosecute offender(s) at its sole discretion when the offender fails to
participate or complete Agreements with FCS and victim(s).
15. Hold Harmless and Indemnification:
A. FCS shall save and protect, hold harmless, indemnify and defend the City, its
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 FCS and
its employees and agents, in the performance of this Agreement.
B. The City shall save and protect, hold harmless, indemnify and defend FCS its
officers and employees against any and all claims, causes of action, suits,
liabilities, losses, charges, damages or costs and expenses arising from or
resulting directly or indirectly from any professional errors and omissions
and/or negligent or willful acts or omissions of the City, its employees and
agents, in the Performance of this Agreement.
Nothing herein shall be deemed a waiver by the City of the limitations on
liability set forth in Minnesota Statutes, Chapter 466; and the City will not be
required to indemnify FCS for any amounts in excess of the limits of liability
in Minnesota Statutes, Section 466.04, less any amounts the City is required
to pay on behalf of itself, its officers, agents and employees for claims arising
out of the same occurrence.
16. 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. FCS shall at all times remain as independent contractor with
respect to the services to be provided under this Agreement.
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B. The City shall be exempt from payment of all unemployment insurance,
FICA, retirement, life and medical insurance and workers' compensation
insurance for any and all of FCS employees and agents. Payment of insurance
premiums, tax withholding, and all other benefits are strictly FCS responsibility.
17. Subcontractor FCS shall neither subcontract any portion of the work to be
performed under this Agreement nor assign this Agreement without the prior
written approval of the authorized agent of the City. FCS shall ensure and
require that the subcontractor agrees to and complies with all of the terms of this
Agreement. Any subcontractor of FCS used to perform any portion of this
Agreement shall report to and bill FCS directly. FCS shall be solely responsible
for the breach, performance, or nonperformance of any subcontractor.
18. Data Practice FCS agrees to comply with the Minnesota Government Data
Practices Act and all other applicable state and federal laws relating to data
privacy or confidentially. FCS will immediately report to the department head
signing this agreement any request from a third party for information relating to
this agreement. The City agrees to promptly respond to inquiries from FCS
concerning data request. FCS agrees to hold the City, its officers, department
head and employees harmless from any claims resulting from the Contractor's
unlawful disclosure or use of data protected under state and federal laws.
19. Compliance with the Law FCS 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), 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 city agrees to promptly supply all
necessary clarifications. Violation of any of the above can lead to the termination
of this Agreement.
20. 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 are not embodied herein, and that no other
Agreements, statements, or promises not 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.
21. Audits and Inspections The City Attorney's office or designated representative
or other governmental agency exercising regulatory function over the City's
business activities, while exercising reasonable, non disruptive procedures, may
inspect FCS records at anytime.
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22. Notice Any notice to be given hereafter by either party to the other, shall be in
writing and may be affected by personal delivery, or by registered mail, return
receipt requested, addressed to the proper party, at the following addresses:
City of Rosemount
2875- 145 St. West
Rosemount, MN 55068
Att:
Financial Crimes Services
406 Main Street Suite 200
Red Wing, MN 55066 -2398
Att: Scott Adkisson
23. Insurance FCS agrees 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:
A. Workers Compensation: Workers Compensation insurance in
compliance with all applicable statutes.
B. Auto Insurance Owned and unowned.
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 city as an additional insured thereunder, and shall
apply on a primary basis with respect to any similar insurance maintained by the
City, which other insurance of the City, if any, shall apply excess of FCS
insurance and not contributed therewith. FCS agrees to maintain Products
Complete Operations coverage on a continuing basis for period of at least two
years after date of completion
Such Commercial General Liability insurance policy shall provide a combined
single limit in an amount that is, at all times, at least equal to the limits of City
liability under Minnesota Statutes, Section 466.04 applicable to any number of
claims arising out of the same 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
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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 City 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 "Error Omissions
Liability Insurance in an amount that is, at all times, at least equal to the limits of
City liability under Minnesota Statutes, Section 466.04 applicable to any number
of claims arising out of the same occurrence (or "Wrongful Act" or equivalent)
and if applicable, Aggregate, covering FCS Liability for negligent acts, errors, or
omissions in the performance of professional services in connection with this
Agreement. FCS Professional Liability Insurance may afford coverage on an
occurrence basis or on a claims basis. It is however, acknowledged and agreed by
the FCS 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 City hereunder. FCS 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 City could result: and
further, that it will exercise it's right under any Extended Reporting Period" "tail
coverage or similar claims -made policy option if necessary or appropriate to
avoiding impairment of such protection.
FCS further agrees that it will, throughout the entire period of 3 years keep
required coverage and for an additional period of two (2) years following
completion of this agreement, immediately:
(a) advise the City of any intended or pending change in Professional Liability
inures or in policy forms, and provided the City with all pertinent information that
the City may reasonably request to determine compliance with this paragraph; and
(b) advise the City of any claims or threat of claims that might reasonably be
expected to reduce the amount of such insurance remain available for the
protection of the City.
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THEREFORE: IN WITNESS OF, the parties have executed the Agreement as of the data
first written above.
Financial Crimes Services City of Rosemount
By By
(Scott Adkisson President) (City Attorney)
Attested
(Chief of Police)
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