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HomeMy WebLinkAboutItem 11r - Administrative and Parking Citation Prcessing Services Change Order STAFF REPORT ADMINISTRATIVE SERVICES DEPARTMENT DATE: July 21, 2026 TO: Honorable Mayor and City Council FROM: Henry Chen, Administrative Services Director SUBJECT: CHANGE ORDER TO INCREASE THE PURCHASE ORDER WITH PHOENIX GROUP INFORMATION SYSTEMS FOR PARKING CITATION PROCESSING AND COLLECTION SERVICES, PARKING PERMIT, AND ADMINISTRATIVE CITATION PROCESSING, IN THE AMOUNT OF $30,000 CEQA: Not a Project Recommendation: Approve SUMMARY The City contracts with Phoenix Group Information Systems (“Phoenix”) to provide services for citation processing (regular and administrative), parking permit, and delinquent citation collection services. The current annual contract amount is $58,100. Historically, the City's delinquent citation collections have averaged approximately $115,000 annually, and the existing contract was budgeted based on those historical collection levels. During the previous fiscal year, delinquent citation collections have significantly exceeded historical averages, increasing to approximately $260,000. The higher volume of collections has resulted in increased processing and collection fees under the terms of the agreement with Phoenix. To ensure the continued processing of citations and collection of delinquent accounts, it is recommended that the City Council approve an increase to the Purchase Order in the amount of $30,000. This will provide sufficient funding to cover the increased fees associated with higher-than-anticipated collections. DISCUSSION Since 2017, the City has contracted with Phoenix to provide parking citation processing, administrative citation management, overnight parking permit Change Order for Phoenix Group PO July 21, 2026 Page 2 of 3 administration, and delinquent citation collection services. In 2024, the agreement was extended for an additional two-year term, with an annual contract amount of $58,100, while staff evaluated potential program enhancements and long-term service needs. At the time the agreement was extended, the Purchase Order amount was established based on historical collection trends. Annual delinquent citation collections were estimated at approximately $115,000, resulting in anticipated collection fees of approximately $17,200, based on the contract rate of 15%. During the previous fiscal year, collection activity substantially exceeded historical projections because of enhanced collection efforts and increased recovery of delinquent citations. Annual collections are now projected to reach approximately $260,000, more than double the amount originally anticipated when the contract was extended. Since collection fees are assessed as a percentage of revenues recovered, the increase in collections has resulted in a corresponding increase in fees payable under the agreement. In addition, the higher volume of delinquent accounts has required the issuance of a greater number of delinquent notices, increasing both processing and mailing costs. FY 2023-24 FY 2025-26 Increase Parking Citations and Notices 26,360$ 32,860$ 6,500$ Deliquency and Collections 22,000 45,500 23,500 Overnight Permits 7,940 7,940 - Administrative Citations 1,800 1,800 - Total Fees:58,100$ 88,100$ 30,000$ The original Purchase Order amount is insufficient to cover the collection fees owed to Phoenix because of the increased volume of delinquent citation collections. Accordingly, an increase of $30,000 to the existing Purchase Order is requested to provide sufficient funding for the additional collection fees and associated program costs. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it will have no foreseeable impact on the environment. Change Order for Phoenix Group PO July 21, 2026 Page 3 of 3 FISCAL IMPACT In FY 2025-26, delinquent citation collections are estimated to total approximately $260,000, resulting in increased processing and collection fees payable to Phoenix. Accordingly, an increase of $30,000 is required for the existing Purchase Order, raising the total authorized amount from $58,100 to $88,100. The additional fees will be recorded primarily as an offset to citation revenues generated through the collection program; therefore, no additional appropriation is required. Of the additional $30,000 being requested for the Purchase Order, approximately $23,500 will be paid as a 15% share of successful collections, which equates to over $156,000 in unexpected revenue to the City through the work performed by the Phoenix Group (with the City retaining net revenues exceeding $126,000). RECOMMENDATION It is recommended the City Council determine this action does not constitute a project under the California Environmental Quality Act (“CEQA”); and approve a Change Order to increase the Purchase Order with Phoenix Group Information Systems for parking citation processing and collection services, parking permit, and administrative citation processing, in the amount of $30,000.