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Home My WebLink AboutReg 2015-10-05 Item 4D - Resolution - Cancellation of Past Due Accounts Receivable and Returned Check Write-OffsCOUNCIL AGENDA SYNOPSIS -- ---------- --- -- ------- -- - - ---- --Initials Date Prepared b Ma or's revie w Council review 10/05/15 LA ITEM INFORMATION ITEM NO. C1 91 33 STAFF SPONSOR: PEGGY MCCARTHY ORIGINAL AGENDA DATE: 10/05/15 AGENDA ITEM TITLE Resolution Ordering the Cancellation of Past Due Accounts Receivable CATEGORY ❑ Discussion Mtg Date ® Motion Mtg Date 10/5/15 ❑ Resolution Mtg Date ❑ Ordinance Mtg Date ❑ Bid Award Mtg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑ Council ❑ Mayor ❑ HR ❑ DCD ❑ Finance ❑ Fire ❑ IT ❑ P&'R ❑ Police ❑ PW 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. REVIEWED BY ❑ COW Mtg. ❑ CA &P Cmte ® F &S Cmte ❑ Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 9/22/15 COMMITTEE CHAIR: HOUGARDY RECOMMENDATIONS: SPONSOR/ADMIN. Finance Department COMMITTEE; Unanimous Approval; Forward to Regular Meeting Consent COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 10/5/15 MTG. DATE ATTACHMENTS 10/5/15 Informational Memorandum dated 9/10/15 Resolution in final form with Attachment A Minutes from the Finance and Safety Committee meeting of 9/22115 33 34 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Laurie Anderson, Fiscal Specialist DATE: September 10, 2015 SUBJECT: Cancellation of Accounts Receivable ISSUE Each year a resolution comes before the Council for the cancellation of uncollectible accounts receivable. For 2015, these items include: False Alarms equaling $275.00, Miscellaneous Billings equaling $27,437.91 and NSF checks equaling $175.00 in the total amount of $27,887.91. 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, 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 days, 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 lawsuits. • 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. 35 INFORMATIONAL MEMO Page 2 DISCUSSION The proposed amount of the 2015 cancellation of Accounts Receivable of $27,887.91 is $8,352.71 lower than last year's total of $36,240.62. This is attributable to three main factors: • There has been an increase in the percentage of accounts that have been collected by our collection agency, Armada Corp. • Due to the fact that we do not issue a new or renewal business license to businesses with past -due debt owed to the City, businesses with long past -due invoices are clearing up their debt. • Most businesses that, in the past, would ignore a $25.00 or $50.00 false alarm billing are paying the new false alarm fees of $150.00 and $200.00 in a timely manner. • Of note, there are five street department invoices and one water department invoice where together damages total $23,124.99. This is 82.9% of the write -off total being requested. None of the parties involved had insurance. FINANCIAL IMPACT The financial impact of cancelling $27,887.91 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 law 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 5, 2015 Regular Meeting. ATTACHMENTS Draft Resolution with Attachment A. H:lwordllnfo Memo 2015.doc 36 Washington Resolution No. 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 $27,887.91 (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 , 2015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Kate Kruller, Council President Filed with the City Clerk:_ Passed by the City Council: Resolution Number: Attachment A — Past -Due Accounts Receivable and Returned Check Write -offs as of August 31, 2015 W: \Word Processing \Resolutions \Past Due Accts Recv & Write -offs 9 -14 -15 LA: bjs Page 1 of 1 37 Date Attachment A- Past Due Accounts Receivable and False Alarms Customer Fund # Invoice /Ck # Amount Returned Check Write -offs as of 8/31 /2015 For Notes 10/08/12 'IMandi Ahmed 000 PF- 01961 $ 25.00 Police False Alarm jTo Collections 01 /22/13 10/04/13 1Lisa Brenner 000 PF- 02295 $ 25.00 ( Police False Alarm jTo Collections 11/07/13- Now bankrupt -per collection agency 10/19/12 '', Hartman Escrow 000 PF -01998 $ 25.00 Police False Alarm To Collections 01 /22 /13- business closed 03/12/13 10/19/12 Hartman Escrow 000 PF -02038 $ 25.00 Police False Alarm To Collections 01 /22 /13- business closed 03 /12/13 05/22/13 Mitel 000 PF -02161 1 $ 25.00 Police False Alarm To Collections 09 /16 /13- business closed 01 /6/14 05/22/13 'Mitel 000 PF -02162 $ 25.00 Police False Alarm To Collections 09 /16 /13- business closed 0l /6/14 06/03/13 Pipeline Industries 000 000 1- PF -02187 $ 25.00 ', Police False Alarm To Collections 09 /16 /13- business closed 03 /30/15 06/03/13 'Pipeline Industries PF- 02188 $ 25.00 j Police False Alarm ITo Collections 09 /16 /13- business closed 03 /30/15 07/10/13 ; Pipeline Industries 000 PF -02207 $ 25.00 Police False Alarm ,To Collections 09/16/ l3- business closed 03 /30/15 10/19/12 I Ahmed Seinab I 000 PF -02012 $ 25.00 Police False Alarm To Collections 03/16/13 10/19/12 Ahmed Seinab 000 PF -02013 $ 25.00 '' Police False Alarm To Collections 03/16/13 Total False Alarms $ 275.00 � I Date Miscellaneous Customer Fund # Invoice /Ck # , Amount For j Notes 01/07/13 I African Paradise Restaurant 000 RF -00900 $ 60.00 Fire Re- inspection Fee r jTo Collections 03/28/13 - closed in 2013 per business licensing 12/31/12 Shedrick BeIfect 000 MB -01199 $ 6,387.11 New pedestrian pole & landscaping To Collections 05/01 /13 -No insurance -hit & run -out of state driver 12/31/12 Robert Huynh 401 MB -01218 $ 6,439.32 I Replace fire hydrant & water use To Collections 05/14/13- no insurance- damages done during felony 03/11/15 Info Only -Hit and Run 000 MB -01767 $ 3,792.92 Replace streetlight pole ;Unknown driver 09/18/12 ';Jamal Knight 000 MB -01101 $ 4,654.74 Replace streetlight pole /luminaire To Collections 02/15/13 - no insurance -hit and run 03/14/13 ,Quentin Control Systems Inc. 000 RF -00948 $ 60.00 Fire Re- inspection Fee To Collections 06/06/13- business closed in 2014 04/04/13 .Quentin Control Systems Inc. 000 RF -00984 $ 85.00 ! Fire Re- inspection Fee To Collections 09/16/13- business closed in 2014 07/31/13 Quentin Control Systems Inc. 000 RF- 01027 $ 110.00 Fire Re- inspection Fee ■To Collections 01/02/14- business closed in 2014 09/18/12 r ILorenceReimer 000 MB- 01099 $ 3,126.83 !. Replace streetlight pole /luminaire ITo collections 02 /01 /13 - -no insurance 09/18/12 ,Demetrius Saunders 000 MB -01102 $ 2,516.99 ' Replace landscaping due to accident , To Collections 01/02/14- no insurance -hit and run 01/18/13 'Seattle Pack and Ship 000 RF- 00919 $ 60.00 ':, Fire Re- inspection Fee 1 To Collections 06/16/13- business closed 07/15/14 06/06/13 Tokyo Japanese Lifestyle 000 RF- 01003 $ 60.00 Fire Re- inspection Fee To Collections 09/16/13- business closed 08/13/13 06/21/13 Tokyo Japanese Lifestyle 000 RF -01008 $ 85.00 Fire Re- inspection Fee To Collections 09/16/13- business closed 08/13/13 Total Misc. Billings $ 27,437.91 Date j Customer Fund # Invoice /Ck # Returned Amount Checks For Notes 05/20/14 '',Angela M Psomos 000 1005 $ 175.00 Summer Camp -TCC To Armada Corp 09 /26/14 ■ Total Returned Checks $ 175.00 j ' I Write -off Grand Total $ 27,887.91 Write -offs 08.31.15.xlsx 9/10/2015 ON City of Tukwila • Finance and Safety Committee FINANCE AND SAFETY COMMITTEE Meeting Minutes September 22, 2015 — 5:30 p.m.; Hazelnut Conference Room PRESENT Councilmembers: Kathy Hougardy, Chair; De'Sean Quinn, Joe Duffie Staff: Vicky Carlsen, Laurel Humphrey CALL TO ORDER: Chair Hougardy called the meeting to order at 5:30 p.m. I. PRESENTATIONS No presentations. 11. BUSINESS AGENDA A. Resolution: Cancellation of Past -Due Accounts 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 $275.00, miscellaneous billings equaling $27,437.91 and NSF checks equaling $175.00 for a total of $27,887.91. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 5, 2015 REGULAR CONSENT AGENDA. B. 2015 2"d Quarter Sales Tax and Miscellaneous Revenue Report Staff presented the 2015 2nd Quarter Sales Tax and Miscellaneous Revenue Report. Information detailed in the staff report includes retail sales tax, gambling tax, and admissions tax revenues, with sales tax broken out by industry classifications. Total sales tax collections for the second quarter were $802,000.00, or 21 %, above those for the same period last year. The City collected $566,433 in sales tax mitigation as of June 30. Councilmember Quinn asked for more information regarding the decline seen in manufacturing as well as what "educational services" entails. INFORMATION ONLY. 1111. MISCELLANEOUS Meeting adjourned at 5:46 p.m. Next meeting: Tuesday, October 6, 2015 — 5:30 p.m. — Hazelnut Conference Room Committee Chair Approval Minutes by LH 41