TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Steve Charelian, Finance Director
Libby Bretthauer, Financial Services Manager
Emy-Rose Hanna, Revenue Services Supervisor
Mario Hernandez, Purchasing Supervisor
SUBJECT:Title
Consideration of a Resolution Approving a Five-Year Agreement with Wittman Enterprises LLC for Emergency Medical and Fire Inspection Billing and Collection Services for an Estimated Annual Amount of $64,000 (Finance Director Charelian).
A) WAIVE FORMAL BIDDING (COOPERATIVE PURCHASING)
B) ADOPT RESOLUTION NO. 22-0074
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council take the following actions:
a) Waive formal bidding per Municipal Code Section 2.36.150 (cooperative purchasing)
b) Approve a five-year agreement for emergency medical and fire inspection billing and collection services with Wittman Enterprises LLC for an estimated annual amount of $64,000.
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FISCAL IMPLICATIONS:
The total estimated value of the contract with Wittman Enterprise LLC is $64,000 annually for both emergency medical and fire inspection billing and collection services. Of this amount, $41,000 is the estimated annual cost for medical billing (which brings in approximately $950,000 in annual revenues) and the other $23,000 is the estimated annual cost for fire inspection billing (which brings in approximately $250,000 in annual revenues). In the event that medical billing or fire inspections exceed estimates, the actual amount paid to Wittman Enterprises LLC may exceed $64,000. However, this would also result in increased revenue for medical billing services and/or fire inspections to the City offsetting the higher costs.
BACKGROUND:
Since 2005, the City has contracted out emergency medical billing and collection services due to its technical and specialized nature. During the last few years, the City’s current vendor has changed ownership multiple times and expanded locations nationally, which has led to some customers not receiving the same exemplary service.
With the City’s current vendor agreement term expiring on July 9, 2022, staff began exploring other vendor options and located a favorable piggyback contract with Wittman Enterprises LLC based on a recent award from the City of Alhambra. This piggyback contract will allow the City to secure a lower collection fee (4.25%) than the current contract provides (4.75%). (This is a percentage-based fee on the total medical transportation billings that are collected).
DISCUSSION:
For over 30 years, Wittman Enterprises LLC has been one of the leading industry experts in ambulance billing and collection services. They currently provide services to over 120 public agencies/clients that bill for ambulance services. Staff believes it would be advantageous to contract with Wittman Enterprises LLC.
In addition to emergency medical billing collections, Wittman Enterprises LLC offers additional services, such as fire inspection billing, which is a service that streamlines the payment collection process for annual fire inspections. This added service would provide a more efficient and user-friendly payment collection process for fire inspections similar to emergency medical billing. Additionally, the City’s Fire Department currently performs over 1,300 fire inspections annually, of which each inspection has varying levels of billing complexities related to assessing the applicable rate based on building size, unit count and other factors such as identifying the building/business owner. With the complexities of fire inspection billing, it is advantageous to contract with Wittman Enterprises since they have the technical expertise and are one of the few vendors that specialize in both fire inspection and ambulance billing and collection services. Overall, Wittman’s high collection rate of approximately 90% for fire inspection billing will result in greater revenue.
Whenever practical and in the City's best interest, the City "piggybacks" onto contracts which are economically advantageous. Piggybacking is the extension of pricing, terms, and conditions of one agency's contract to other governmental agencies at the mutual consent of all parties. This is permissible under the City's Municipal Code, Section 2.36.150 (Cooperative Purchasing).
In this case, the City has secured pricing from a 2021 City of Alhambra contract, which was awarded at a more favorable rate of 4.25% of net collections as compared to the existing vendor, which charges a higher rate of 4.75% of net collections. The City of Alhambra had competitively solicited proposals for emergency medical services (EMS) billing services and awarded the contract to Wittman Enterprises LLC based on their pricing, hardware and software, well-structured customer support system and overall high collection rate of 90%. The contract with Wittman Enterprises LLC for emergency medical billing and fire inspection billing is estimated to cost $64,000 annually.
Based on this available piggyback opportunity, staff recommends the City Council authorize the City Manager to execute a contract for emergency medical and fire inspection billing and collection services with Wittman Enterprises LLC. The initial contract period is from August 8, 2022 through June 30, 2026. Additionally, staff is recommending that the City Manager be given the authority to exercise contract extensions if in the City’s best interest. The City has the right to terminate the contract with a sixty-day notice to Wittman Enterprises LLC.
It is important to note that although the current vendor’s agreement term is expiring, without a sixty day termination notice it will automatically renew, so services with the current vendor will remain in full effect during the transition period to Wittman Enterprises LLC. There will be no service interruption for ambulance billings with the changeover.
PUBLIC OUTREACH:
After a thorough analysis, staff determined that there would be no impact to the public and that public outreach was not required for the approval of this contract.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that there is no possibility that the activity may have a significant effect on the environment; therefore, pursuant to Section 15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Resolution No. 22-0074
2. Agreement - Wittman Enterprises LLC