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HomeMy WebLinkAboutReg 2014-10-20 Item 4C - Resolution - Cancellation of Past Due Accounts Receivable and Returned Check Write-OffsCOUNCIL AGENDA SYNOPSIS Meeting Dale Prepared by Mayors review Connei I rem' eiv 10/07/14 LA r4 Resolution , 10/20/14 LA E Other Mt,gDale A1t,gDate 10/20/14 S1) ONSOR r Council Mayor 1 [R. DCD 1Ynane E finance l'ire JT Pea E Police P " SPONSOR'S There are certain accounts receivable and returned checks that have been deemed SUMMARY uncollectible and need to be removed from the Accounts Receivable ledger. The Council is being asked to consider and approve the resolution ordering their cancellation. RINII AVM liY LIl COW Mtg. CA&P Corte EI hks Corte E -Transportation Corte Utilities Cmte r- Arts Comm. _ Parks Comm. [ Planning Comm. DATE: 10/07/14 COMMITIEE CEIAIR: SEAL RECOMMENDATIONS: Si' )NS( CommITTIT Finance Department Unanimous Approval; Forward to Consent Agenda 10/20/14 COST IMPACT / FUND SOURCE ExpF,NDITuRkRUQUIRIM AMOUNT BLI DGETED APPROPRIATION REQUIRED $ $ $ ITEM INFORMATION ITEM No. 4.C. 3 ST,\ FF SP( Ns()R: PEGGY McCARTHY ORK;INAI, AGENDA DATE: 10/20/14 AGNNi),\ 1'mm' 1 ITLF, Resolution Ordering the Cancellation of Past Due Accounts Receivable CATI:,(oRy aluission Af!g Dale r- Motion ARgDate r4 Resolution E Ordinance Mt,gDate _ Bid Award M/gDate _ Public Hearing ANDate E Other Mt,gDale A1t,gDate 10/20/14 S1) ONSOR r Council Mayor 1 [R. DCD 1Ynane E finance l'ire JT Pea E Police P " SPONSOR'S There are certain accounts receivable and returned checks that have been deemed SUMMARY uncollectible and need to be removed from the Accounts Receivable ledger. The Council is being asked to consider and approve the resolution ordering their cancellation. RINII AVM liY LIl COW Mtg. CA&P Corte EI hks Corte E -Transportation Corte Utilities Cmte r- Arts Comm. _ Parks Comm. [ Planning Comm. DATE: 10/07/14 COMMITIEE CEIAIR: SEAL RECOMMENDATIONS: Si' )NS( CommITTIT Finance Department Unanimous Approval; Forward to Consent Agenda 10/20/14 COST IMPACT / FUND SOURCE ExpF,NDITuRkRUQUIRIM AMOUNT BLI DGETED APPROPRIATION REQUIRED $ $ $ Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 10/20/14 MTG. DATE ATTACHMENTS 10/20/14 Informational Memorandum dated September 30,2014 Resolution in draft form with Attachment A Minutes from Finance and Safety Committee meeting of 10/07/14 3 4 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Laurie Anderson, FiscaI Specialist DATE: September 30, 2014 SUBJECT: Cancellation of Accounts Receivable ISSUE Each year a resolution comes before the Council for the cancellation of uncollectible accounts receivable. For 2014, these items include: False Alarms equaling $200.00. Miscellaneous Billings equaling $35,931.12 and NSF checks equaling $109.50 for a total amount of $36.240.62. BACKGROUND The process for tracking accounts receivable is quite thorough. The steps below are followed prior to preparation of the attached write-off resolution. • Invoice is sent to recipient by the Finance Department payable in 30 days. • If payment is not received within 30 days, the receivable is forwarded to our collection agency, Armada Corp., and placed in pre-collect status. •At this time, Armada sends a Delinquency Notice to debtor notifying them of the past-due status of the receivable and asks them to contact the City to make payment. Payments can still be made directly to the City while in pre-collect status. •Once 30 days have passed in pre-collect status, the receivable then rolls over to active collections. At the onset of active collections, a letter is sent to the debtor notifying them of status change and advising that all payments must now be made through the collection agency. While in active collections status, the debtor is contacted both by phone and letter. A search is made for assets with which the debt could be satisfied. Once the debt has been in active collections for 45 doyo, it is then reported to the national credit bureaus. The last process in the collections cycle is the pursuit of legal action. This includes attaching checking accounts, garnishments and Iawsuits. • The City will not issue or renew a business license until all outstanding debt owed to the City is paid. • It should be noted that while a debt may be written off our books; it is still active in Armada's collections process. INFORMATIONAL MEMO Page 2 DISCUSSION The proposed amount of the 2014 cancellation of Accounts Receivable of $36,240.62 is higher than last year's total of $28.644.47. This is attributable to three main factors: • One of the requested write-offs is for $8,188.10. The original amount of this invoice, which is for damages to a brick wall and masonry art at 14800 TIB, was $19,019.84. However, the party involved had a limited amount of insurance. In settlement, the City was paid $10.83174 thus leaving $8.1OO.1OtObe written off. VVe are unable tOpursue this further as insurance has paid what was available. • Another of our requested write-offs is for an invoice for damages to a street light. It was damaged by a hit and run driver and, as such, we do not know whom to bill. The invoice total is $1.853.46. The parties involved in five of the street department invoices being proposed for write-off had no insurance. One involved a vehicular homicide. The total of these invoices is $25,714.56. • The total of the receivables referenced above ia$55.75O.12which is 98.6Y6 of the write-off • At tinnee, we do receive payment for receivables that have been written off. A street department invoice for $6,006.80 written off in 2013, was paid in 2014. Originally, this receivable was an Info OnIy/Hit and Run billing. However, unexpectedly, Geico Insurance contacted us and we were then able to secure payment to the City. • During the 2018 write-off procens, a question was asked regarding how a party can contact the City about these receivables. The phone number for the Finance Department is on all invoices sent out. FINANCIAL IMPACT The financial impact of cancelling $36,240.62 will be to reduce our accounts receivable balance by this amount in keeping with Generally Accepted Accounting Principles (GAAP) for the writing off of bad debt. Please note that while we are writing off the accounts receivable for accounting purposes, the accounts are still being actively worked for collection purposes with the exception of those accounts where we cannot identify the responsible party. Accounts covered by bankruptcy Iaw cannot be pursued. RECOMMENDATION The Council is being asked to approve the annual resolution authorizing the cancellation of Accounts Receivable and to forward this item to the Consent Agenda of the October 20. 2014 Regular Meeting. ATTACHMENTS Draft Resolution with Attachment A. 6 DRAFT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ORDERING THE CANCELLATION OF PAST DUE ACCOUNTS RECEIVABLE AND RETURNED CHECK WRITE -OFFS. WHEREAS, certain receivables and checks have been deemed uncollectible after efforts by both the City and a collection agency have been unsuccessful; and WHEREAS, the City will continue to pursue these receivables when practical; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Miscellaneous Accounts Receivable and Returned Checks. The total of $36,240.62 (per Attachment A) is deemed uncollectible. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2014. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Rachel Turpin, City Attorney Attachment A — Past -Due Accounts Receivable and Returned Check Write -offs as of August 31, 2014 W: \Word Processing \Resolutions \Past Due Accts Recv & Write -offs 9 -30 -14 LA:bjs Page 1 of 1 7 co Date 08/30/12 10/08/12 10/19/12 10/19/12 10/19/12 12/09/11 06/18/12 12/05/11 Attachment A- Past Due Accounts Receivable and Returned Check Write -offs as of 8/31 /2014 Customer Badar Halaal Foods Corporation Badar Halaal Foods Corporation Badar Halaal Foods Corporation Badar Halaal Foods Corporation Badar Halaal Foods Corporation Bank of America Cheryl Johnson Matrix Transportation Total False Alarms Fund # Invoice /Ck 000 PF -01939 000 PF -01964 000 PF -01992 000 PF -02029 000 PF -02029 000 PF -01806 000 PF -01932 000 PF -01757 False Alarms Amount $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 200.00 For Police False Alarm Police False Alarm Police False Alarm Police False Alarm Police False Alarm Police False Alarm Police False Alarm Police False Alarm Notes To collections 1 /22/13 - Per DoR- company closed on 6/30/12. To collections 1/22/13 - Per DoR- company closed on 6/30/12. To collections 1/22/13 - Per DoR- company closed on 6/30/12. To collections 1/22/13 - Per DoR- company closed on 6/30/ 12. To collections 1/22/13 - Per DoR- company closed on 6/30/12. B of A moved out -not their bill-bldg vacant To collections 9/24/14. No further response from customer Verified that there has been no such company at this address. Date 12/31/11 12/31/13 10/11/12 03/05/12 04/27/12 07/31/13 03/15/12 12/31/13 03/15/12 08/24/12 Date 11/10/12 06/01/13 Customer Clara Contreras Info Only- Hit and Run Juba Computers Daniel Martinez Samuel Raymundo Ridge Spring Child Care Tiyona Russ Titan Insurance /Dat Le Hugo Vaca - Valencia Wilton Crest Apartments Total Misc. Billings Customer Jamila A. Coleman Maiesha Barquet Total Returned Checks Write-off Grand Total Fund # Invoice /Ck # 000 MB -00954 $ 000 MB -01444 $ 000 RF -00864 $ 000 MB -01005 $ 000 MB -01037 $ 000 RF -01028 $ 000 MB -01006 $ 000 MB -01437 $ 000 MB -01008 $ 000 RF -00844 $ Miscellaneous Amount 1,949.97 1,853.46 85.00 14,016.70 5,367.62 60.00 443.38 8,188.10 3,906.89 60.00 $ 35, 931.12 Returned Chec Fund # Invoice /Ck # 000 1051 $ 630 204 $ Amount 77.00 32.50 109.50 $ 36,240.62 For knocked down streetlight pole repairs to streetlight pole Fire re- inspection fee damaged streetlight & foundation jersey barrier repairs Fire re- inspection fee damaged trees in accident damaged brick wall & masonry art damaged streetlight pole & luminaire Fire re- inspection fee For Youth Athletics -TCC Swim Lessons -MPD Notes Moved -no insurance- To EPR 4/23/12 (old collection agency) Unknown driver- unable to bill responsible party To Armada 1/25/13- Company closed 3/25/13 per licensing To EPR 5/4/12- No insurance or assets No insurance- vehicular homicide involved- to Armada 1/2/14 Not billed to right parry- in meantime right party moved away To Armada 3/6/13- No insurance Had limited insurance -this was portion left after pymt to City No insurance -to Armada 1/2/14 No response - notified Kathy Stetson -To Armada 6/6/13. To Armada Corp 8/13/13. To Armada Corp 8/13/13. Notes EPR= Evergreen Professional Recoveries; our old collection agency. Armada Corp has been our collection agency since mid -2012. Write -offs 08 31 14.xlsx 10/1/2014 ^��` Tukwila ��Z[l7 of � ��I�I��� � � Finance and Safety Committee FINANCE AND SAFETY COMMITTEE Meeting Minutes October 7, 20/4-5:3Op.0.,Hazelnut Conference Room PRESENT Councilmembers: Verna Gea|, Chair; Joe Duffie, Kathy Hougardy Staff: David C|ine, Joyce Trantina, Cheryl Thompson, Evie Boykan, Vicky Carlsen, Tracy Gallaway, Laurel Humphrey Guests; Martin Turney, Tukwila School District; Nathan Phillips, YMCA; CALL TO ORDER: Committee Chair Seal called the meeting to order at 5;30 p.m. I. PRESENTATIONS No presentations. U. BUSINESS AGENDA Consensus existed to consider the interlocal agreement for afterschool programming as the first item of business. A. |ntedoca| Agreement; Aftarschoo|Programming Staff is seeking Council approval to enter into an inter|0ca| agreement with the Tukwila School District that will clarify roles and responsibilities in the delivery of afterschool programming at the three elementary schools from September 2014 — June 2016. Programming will be offered in an integrated service model representing a collaboration between the Parks and Recreation Department and the YMCA, with in-kind services such as transportation and facilities provided by the District. This model will serve up to 85 students at each school five days per week. The City's ongoing annual commitment of $100.000 toward afterschool programming will be redirected to the School District starting in 2015. The additional costs to the Parks Department will be reimbursed by the School District, and this agreement represents no net financial impact to the City. Programming provided by Community Schools Collaboration at the middle and high school will continue through the end of 2014, and CSC is seeking grant funding to continue. Council will receive an annual update from CSC this fall. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 13, 2014 COMMITTEE OF THE WHOLE. B. Contract; Legislative Services — Ball Janik, LLC Staff is seeking Council approval to enter into a contract for federal representation and Iegislative services with Bali Janik, LLP through December 31, 2016. This represents a renewal of existing services at a monthly flat rate of $6,375 plus axpennes, with the contract not to exceed $80.000 per year. This is approximately a 6.5% increase from the previous contract. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 20, 2014 REGULAR CONSENT AGENDA. C. Resolution: Cancelling Past Due Accounts Receivable Staff is seeking Council approval of the annual resolution that would declare the cancellation of uncollectible accounts receivable. The total for this year includes false alarm fees equaling $200.00. miscellaneous billings equaling $35,931.12, and NSF checks equaling $109.50 for a total of $56.240.62. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 20, 2014 REGULAR CONSENT AGENDA.