1g Approve Check Diversion ProgCITYOF
CHANHASSEN
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Cqanhass{~s MN 55317
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MEMORANDUM
TO:
FROM:
DATE:
Todd Gerhardt, City Manager
Beth Hoiseth, Crime Prevention Specialist'
March 11, 2004
SUB J:
Diversion Program for Dishonored/Worthless Checks
Background
Established in 1997, Retailers Protection Association (RPA) is a non-profit
organization that offers a program to handle dishonored (non-sufficient funds or
closed account) checks through a pretrial diversion process. The program provides
restitution to the victims, educates the offenders on financial management, and
encourages participating businesses to establish effective check acceptance
procedures. The program targets first time offender cases, but will handle checks of
repeat offenders. The Carver County Attorney's Office recently partnered with
RPA, and attached is a list of other Minnesota counties and cities participating.
How the program would benefit Chanhassen:
The victim receives 100% of the face value of the check and is
reimbursed for any bank fees.
The worthless check offenders solely support the program, so
there is no cost to the city/taxpayer.
· The program does not increase city staff workload, but will help
to decrease court cases.
· Businesses and retailers are trained in worthless check avoidance
techniques.
· Retailers Protection Association will accept a dishonored check
of any amount, whereas the city attorney does not accept checks
for prosecution under $25.00. The program would therefore
offer retailers an alternative to collection agencies or handling
any worthless checks on their own.
· The city will receive a $5.00 fee for every successful diversion
that occurs in Chanhassen.
With the program in place, the City of Chanhassen would refer all retailers and
businesses to RPA for handling dishonored check complaints. However, criminal
prosecution remains an option if the offender does not comply with the program
and prosecutorial guidelines are met. Participating in the program is voluntary;
retailers and businesses have the option of continuing to use their own resources for
collecting on dishonored checks.
The City of Chanhassen · A grc, waq!] u)n': 'nu:11ty ,,v{[h cl~:ar/',, ~ '<:., qua! ?,~ SChOOlS d ( har?m',,'.i .... r, '. I , i , ',11. i Ii SS;' ',':11 d /g iraiis a!ld b!!atJtiit!! ;}arks ~, !j U,xL"' p!ace,, to ii~,e ,?:ork arid [,,!ay
Mr. Todd Gerhardt
March 11, 2004
Page 2
Staff has discussed the program with Linda Walton, Chanhassen Chamber of
Commerce Executive Director, and she believes it would be beneficial to their
members and is supportive of the program. Our city attorney's office also
represents the City of Lakeville that uses RPA, and has reported satisfaction with
their program.
The agreement would be between the City and RPA, and does not financially
obligate the City in any manner. There is an opt-out provision that states this
agreement may be immediately terminated by the City at any time if the City
determines that RPA and/or affiliated company Computer Support Services is
acting, or has acted at any time during the term of this agreement, in violation of
state or federal law.
Recommendation
Staff recommends that the City Council approve the proposed agreement with
Retailers Protection Association in order to establish a pretrial diversion program
for dishonored checks.
WORTHLESS CHECK PROGRAM AGREEMENT
AGREEMENT made and entered into this day of ,2004,
by and between the CITY OF CHANHASSEN, a Minnesota municipal corporation
("City), and the RETAILERS PROTECTION ASSOCIATION, INC., Minnesota non-
profit corporation ("RPA"), having its principal pace of business at
Purpose. The purpose of this Agreement shall be to implement a Worthless
Check Diversion Program pursuant to Minnesota Statutes § 628.69 for the City of
Chanhassen.
The program will provide an alternative to criminal prosecution of individuals
who issue a worthless check or checks to merchants and businesses. The program
will assist the City of Chanhassen, Carver County Sheriff's Department and other
law enforcement agencies in obtaining records to assist in the investigation and
prosecution of individuals issuing worthless checks. Under the program, the
victim will be paid 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. RPA will assist the City Attorney
and Victims in obtaining full restitution for victims of non-sufficient funds (NSF)
checks and account closed (AC) checks. RPA is responsible for managing
pertinent case files and conducting financial education classes for first time
offenders.
RPA may also provide Other Pre-trial Diversion Programs involving property
crimes such as shoplifting, credit card fraud, and other related property crimes.
The City may contract for additional service and amend this contract to include
these services. Typically these property crime cases involve first time offenders
and will require the offender to cover cost of the program, recovery of property,
collection of any state statute civil penalties, direct cost to victim(s) and require
training classes relating to victim impact.
2. De, finitions.
Victim - the business or person who accepted a dishonored check for
goods or services and suffered the financial loss.
Offender - the individual who has enrolled in the Worthless Check
Program voluntarily or has been ordered by the Court to complete the
Worthless Check Program.
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.
Do
Financial Education Class Fees - The fees associated with the training
classes the offender attends as part of their restitution Agreement to be set
as follows:
Worthless checks $ 85.00
Other Pre-Trial Offenses $210.00
City Support.
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The City Attorney and Police designees will assist RPA 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.
City Attorney and Police designees will conduct as needed meetings with
key RPA staff to offer procedural guidance, evaluate program
performance, and provide support and direction.
Per.[ormance Agreement. RPA agrees to provide the following level of administrative
services and offender education classes to the City of Chanhassen in a timely and
efficient manner:
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Co
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Perform daily operations and management of all clerical and accounting
functions related to offenders of NSF checks to be included in the
Chanhassen Worthless Check Program.
Go
Generate demand notices to worthless check writers, and follow through
with respect to the collection and disbursement of victim restitution,
administrative fees, and RPA education training class fees.
Provide necessary correspondence and follow-up telephone inquiries to
victims and offenders.
Properly maintain all physical files, financial records, reports, computer
files, and any other documentation for a period of no more than six (6)
years.
Provide voluntary (unless mandated by state statutes worthless check
offender financial management education classes.
Conduct classes designed to teach and provide meaningful information and
lessons to offenders on criminal consequences of issuing worthless checks
as well as information on personal financial management.
Schedule classes according to the following criteria. Each offender shall be
required to complete at least six (6) hours of class time. Sessions will be
held in the City of Chanhassen and/or surrounding cities. These training
sessions may be jointly held with other metro communities. Class size
shall not exceed 30 attendees.
Maintain records of restitution paid by offenders, fees paid, and of offender
attendance.
Maintain records of payment to victims and to the City and issue monthly
reports of these payments to the City.
Provide monthly reports to the City of Chanhassen of annual, quarterly, and
monthly financial revenues, and of completed offender classes; and related
reports as required by the City and law enforcement.
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Report offenders who refuse to enroll in the program or fail to complete the
program to the City.
Develop forms and procedures for the documents and investigation of check
offenses. The forms and procedures must be approved by the City.
Program Operational Fees/Revenue.
A. The victim will be reimbursed any money recovered from the offender.
The Worthless Check Diversion Program shall be governed by Minnesota
Statutes section 604.113 subdivision 2, paragraph (a), which allows for the
collection of a service charge on dishonored checks of up to $30.00.
C°
The Worthless Check Diversion Program shall also conform with
Minnesota Statutes section 609.535.
The fee for offenders to attend the educational class will be $85.00. The
fee will be retained by RPA to conduct these classes. The class may be
waived by RPA, provided that the offender pays the face value and civil
penalty within fourteen (14) working days.
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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. The offender may
reschedule up to three (3) times before referring the offender to the Police
for failure to complete the program.
Non-Compete. During the term of this agreement the City shall not establish a
competing worthless check program.
Agreement Date. This Agreement shall remain in effect from
,2004, to ., 2007, and shall be
automatically renewable. Either party may give a thirty-day (30) notice in writing
that said party wishes to terminate this Agreement.
City has no financial liability. It is understood and agreed by and between the
parties that RPA and any subcontractor (CSS) will bear all financial liability for
all aspects of its operations under this Agreement.
9. Termination qf this agreetnent:
This Agreement may be terminated by either party upon 30 days written
notice to RPA or the authorized agent of the City. This Agreement may
be terminated by RPA upon 30 days written notice to the authorized agent
of the City if RPA determines that it cannot conduct or administer the
Worthless Check program because program-related income does not equal
program costs.
This Agreement may be immediately terminated by the City at any time if
the City determines that RPA and/or CSS (Computer Support Services,
see 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.
10.
Atnendments or Material Modifications. All amendments or modifications to
this Agreement must be in writing and approved by both parties.
11.
No City Obligation to Merchants. RPA, CSS, and victims who participate in this
program fully understand that the Worthless Check Program is providing a public
service and the City of Chanhassen is held harmless and has no liability to make
recovery of any check(s). The City is not obligated to take criminal action against
offender(s).
12.
Criminal Action. The City Attorney may choose to prosecute offender(s) at its
sole discretion in cases where the offender fails to participate or complete
Agreements with RPA and victim(s).
13.
Hold Harmless and Indemnification. RPA and CSS 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 RPA and CSS, their employees and agents, in the
performance of this Agreement.
14. Independent Contractor.
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. RPA shall at all times remain as
independent contractor with respect to the services to be provided under
this Agreement.
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 RPA's and CSS's employees and agents.
Payment of insurance premiums, tax withholding, and all other benefits
are strictly RPA's and CSS's responsibility.
15.
Subcontractor. RPA 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. The only exception is to use
CSS as a subcontractor. RPA shall ensure and require that the subcontractor
agrees to and complies with all of the terms of this Agreement. Any
subcontractor of RPA used to perform any portion of this Agreement shall report
to and bill RPA directly. RPA shall be solely responsible for the breach,
performance, or nonperformance of any subcontractor.
16.
Data Practice. RPA agrees to comply with the Minnesota Government Data
Practices Act and all other applicable state and federal laws relating to data
privacy or confidentiality. The RPA will immediately report to the City any third
party requests for information relating to this agreement. The City agrees to
promptly respond to inquiries from RPA concerning data requests. RPA agrees to
hold the City, its elected officials, officers, and employees harmless from any
claims resulting from RPA's unlawful disclosure or use of data protected under
state and federal laws.
17.
Compliance with the Law. RPA agrees to abide by the requirements and
regulations of The American with Disabilities Act of 1990 (ADA), the Minnesota
Human Rights Act (Minn. Stat. Ch. 363), the Chanhassen Civil Rights Ordinance
(Ch. 139), and Title VII of the Civil Rights Act of 1964. Violation of any of the
above can lead to the termination of this Agreement.
18.
Entire Agreement. This 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.
19.
20.
21.
Audits and Inspections - The City Attorney or designated representative or other
governmental agency exercising a regulatory function over the City's business
activities, while exercising reasonable, non-disruptive procedures, may inspect
RPA and/or CSS records at anytime and as often as they deem necessary.
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:
Insurance - RPA 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 provisions that follow:
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Workers Compensation insurance in compliance with all applicable
statutes.
Owned and unowned automobile insurance with limits of at least
$500,000.00 per accident.
"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 and advertising 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 RPA's insurance and not contributed therewith. RPA
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 the amount of at least $1,000,000 (one 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 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. Property liability coverage.
Professional liability ("Error & Omissions") coverage in the amount of at
least $500,000, Each Occurrence (or "Wrongful Act" or equivalent) and if
applicable, Aggregate, covering RPA's Liability for negligent acts, errors,
or omissions in the performance of professional services in connection
with this Agreement. RPA's Professional Liability Insurance may afford
coverage on an occurrence basis or on a claims basis. It is however,
acknowledged and agreed by the RPA 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. RPA 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 fight under any Extended Reporting Period" ("tail
coverage") or similar claims-made policy option if necessary or
appropriate to avoiding impairment of such protection.
RPA 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 available
for the protection of the City.
(SEAL)
CITY OF CHANHASSEN
BY:
Thomas A. Furlong, Mayor
AND
Todd Gerhardt, City Manager
RETAILERS PROTECTION
ASSOCIATION, INC.
BY:
John McCullough, Executive Director
STATE OF MINNESOTA )
( SS.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me this day of
,20__, by Thomas A. Furlong and by Todd Gerhardt, respectively
the Mayor and City Manager of the City of Chanhassen, a Minnesota municipal
corporation, on behalf of the corporation and pursuant to the authority granted by its City
Council.
NOTARY PUBLIC
STATE OF MINNESOTA )
( SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
,20__, by John McCullough, Executive Director of the Retailers
Protection Association, Inc.
NOTARY PUBLIC
RPA Check Diversion Program
Approved by League of MN Cities
12/04/2003
Cities/Counties under agreement with RPA Check
Diversion
CITIES
Minneapolis Cloquet
Winona Pelican Rapids
Cottage Grove
Edina
Isanti
Stillwater
Brooklyn Park
Rochester
Moorhead
Fergus Falls
Richmond
Hopkins
Red Wing
Floodwood
Hastings
Hermantown
Albert Lea
Duluth
Two Harbors - approved
Chisholm
Becker
Virginia
Owatonna
Lakeville
St. Cloud
Park Rapids
Proctor
Maplewood
Mendota Heights
West Concord
COUNTIES
Olmsted
Norman
Lake
Freeborn
Rice
Mahnomen
Steele County
Carver County
Pennington
Sibley
Dodge
Cities with attorney approval waiting for council/board
approval
CITIES
Elk River
Bemidji
Brooklyn Center
Faribault - approved - verbal commitment
Northfield - approved- verbal con'Lmitment