AGENDA TITLE:
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Adopt a Resolution Authorizing the Interim City Manager to Execute Amendment No. 2 with a Two-Year Term Extension for the Professional Services Agreement with Business Recovery Services Inc., of Alameda, CA, for Utility Payment Lockbox Services for a Sum Not-To-Exceed $138,942 (IS-FIN)
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MEETING DATE:
April 1, 2026
PREPARED BY:
Tarra Sumner, Revenue Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution Authorizing the Interim City Manager to execute Amendment Number 2 to a Professional Services Agreement with Business Recovery Services Inc., of Alameda, CA, for Utility Payment Lockbox Services by extending the term two years for a total sum not-to-exceed $138,942.
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BACKGROUND INFORMATION:
The City generates approximately 36,000 utility bills each month, of which roughly 5,000 are paid by check and manually processed by Customer Service Representatives. This manual check processing is labor intensive, requiring staff to open envelopes, feed checks and remittance stubs through rapid processing equipment, resolve exceptions, and manually enter approximately 10% of payments due to errors or discrepancies. In addition, Staff must balance accounts and prepare deposits daily. These tasks divert staff from front-line customer service and other essential departmental responsibilities.
On September 18, 2019, following a competitive Request for Proposal (RFP) process, the City Council adopted Resolution 2019-190, approving a Professional Services Agreement with Business Recovery Services Inc. to provide lockbox services for the City’s utility billing operations, ensuring that mailed utility payments were collected, processed and deposited efficiently. An amendment to this agreement was approved on December 1, 2022, through Resolution 2022-267, extending the Agreement through September 30, 2025. The original Professional Services Agreement and Amendment No. 1, are collectively referred to as the “Agreement” throughout this item.
Under the terms of the Agreement, Business Recovery Services Inc.is responsible for collecting mailed utility payments, processing checks using high-capacity automated equipment to ensure accuracy and timeliness, generating data files for posting to the City’s financial systems, depositing funds each business day before the close of business, and providing physical images of all checks and payment stubs for record keeping and audit purposes. These services are critical in maintaining the City’s cash flow and supported operational efficiency by reducing manual handling of payments and minimizing errors.
Over the term of the Agreement, City staff has been very satisfied with Business Recovery Services Inc.’s performance. Therefore, staff would like to continue the existing contractual relationship to avoid additional workload and expenses related to updating the billing post office box address and setting up electronic check processing with a new vendor. Lodi Municipal Code Section 3.20.075 provides that contracts for accounting and financial services are exempt from the advertising and bid requirements, and may be awarded based on “professional qualifications and experience, quality of service, past performance, and negotiated prices.”
Due to the reasons and the quality work listed above it is recommended that the City Council authorize Amendment No. 2 for a two-year extension of the Professional Services Agreement with Business Recovery Services Inc. and increase the not-to-exceed amount by $45,000 for a total agreement amount not-to-exceed $138,942, as shown in Attachment 1. The Amendment No. 2 scope of services will continue to include collection of mailed payments, automated check processing, data file generation for posting, daily fund deposits, and access to payment and remittance images.
STRATEGIC VISION:
3C. Fiscal Health: Ensure elected leaders & staff retain focus on fiscal priorities.
FISCAL IMPACT:
Lockbox services are estimated to cost approximately $22,500 annually based on current check volumes and updated cost projections. Actual expenditures will depend on transaction volume. As more customers adopt online payment methods, check volumes and the cost of lockbox services is expected to decline over time.
FUNDING AVAILABLE:
Funds for this contract are budgeted in the Revenue - Miscellaneous Professional Services account (10020203-72450) and were previously approved as part of the adopted Fiscal Year 2025/26 Budget. Future funding will be included for consideration and approval as part of subsequent budget adoption processes.