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HomeMy WebLinkAboutReg 2016-10-17 Item 4C - Resolution - Cancellation of Past Due Accounts Receivables and Returned Check Write-OffsCOUNCIL AGENDA S YNopsis ---------------------------- - - - - -- Initials M6,etl . ng.Dale Prepared by Mayor's re eiv va[ cil review 10/17/16 LA " *, Mel a LTI F-,' I I M ' 4.C. 5 I STAFF SPONSOR: PEGGY MCCARTHY 1 10/17/16 A(,,, FINDA I'n �.m Tt'n,i Resolution Ordering the Cancellation of Past Due Accounts Receivable CA,n,,(-,oRY F-1 Discwssion ,Al(g Dale [:] Motion Altg Date E Resolution Alt ,g Date 10117116 F-1 Ordinance Altg Date ❑ BidAxard MtS Date [:].Pub& Ffeafing Mtg Date [--] Other Altg Date SPONSOR ❑ Council ❑ Mayor E].1JR ❑ DCD E.Einantv E] Fire [:] TS ❑ 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 the cancellation. Ri-,.V1F1WJ,'D BY ❑ cow Mtg. ❑ CA&P Cmte E F&S Cmte F-1 Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. [:] Planning Comm. DATE: 10/4/16 COMMITTEE CHAIR: SEAL RECOMMENDATIONS: S110N,S0R/Ai)m1N• Finance Department COMM 'T"' "F" Unanimous Approval; Forward to Consent Agenda 10/17/16 Meeting COST IMPACT / FUND SOURCE Ex1+'1ND1'1'LJRi-,, Ri,,(,)uiRj3i) AMOUN,j, BUDGETED APPROPRIATION REQUIRED Fund Source: Comments.- �MTG.DATE RECORD OF COUNCIL ACTION 10/17/16 MTG. DATE ATTACHMENTS 10/17/16 Informational Memorandum dated September 28, 2016 Resolution in draft form with Attachment A Minutes from Finance and Safety Committee meeting of 10/4/16 5 N City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Laurie Anderson, Fiscal Specialist CC: Mayor Ekberg DATE: September 28, 2016 SUBJECT: Cancellation of Accounts Receivable ISSUE Each year a resolution comes before the Council for the cancellation of uncollectible accounts receivable. For 2016, these items include: False Alarms equaling $411.07, Miscellaneous Billings equaling $46,724.68 and Returned Checks equaling $544.71 in the total amount of $47,680.46. 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 into 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 the status change and advising that all payments must now be made through the collection agency. • While in active collections, 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 of our books; it is still active in Armada's collection process. VA INFORMATIONAL MEMO Page 2 DISCUSSION The proposed amount of the 2016 cancellation of Accounts Receivable of $47,680.46 is higher than last year's total of $27,887.91. This is attributable to the following factors: • There are two write -offs totaling $26,760.03 resulting from Hit and Run incidents where the responsible party is unknown. These make up 56% of the write -offs for this year. These damages are not covered by Washington Cities Insurance Authority. • There are three additional write -offs for damages to City property that total $11,399.93. These also were not covered by Washington Cities Insurance Authority as none met our $5,000.00 deductible threshold. The responsible parties had no insurance, were DUI or Driving While License Suspended. These write -offs comprise 23.9% of this year's write - offs. The last write -off of note is for $7,678.36. It involves an auto accident resulting in the City needing to repair a signal head and install a new jersey barrier. Our charges are currently being disputed by Geico Insurance, the driver's insurance company. While we may still see payment of this debt, in order to not overstate our Accounts Receivable on the balance sheet, we have chosen to include this receivable with this year's write -offs. This receivable is 16.1 % of this year's write -offs. • In all, 96% of our write -offs are from the above -noted items. FINANCIAL IMPACT The financial impact of cancelling $47,680.46 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. Again 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 a responsible party cannot be identified. 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 17, 2016 Regular Meeting. ATTACHMENTS Draft Resolution with Attachment A. WA2016 Info MemoslAR Write -off Info Memo.doc 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 $47,680.46 (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 , 2016. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Joe Duffie, Council President Filed with the City Clerk:_ Passed by the City Council: Resolution Number: Rachel B. Turpin, City Attorney Attachment A — Past -Due Accounts Receivable and Returned Check Write -offs as of August 31, 2016 W: \Word Processing \Resolutions \Past Due Accts Recv & Write -offs 9 -22 -16 LA: bjs Page 1 of 1 W Attachment A- Past Due Accounts Receivable and Returned Check Write -offs as of 8/31 /2016 False Alarms Date Custome Fund # Invoice /Ck # Amount 12/06/13 ';CADS -Sun Y Kim 000 PF- 02363 $ 25.00 12/31/13 ' Mailiku Habtegiorgis 000 PF -02398 $ 11.07 Police False Alarm 11/03/14 Homeland Security 000 PF -02612 $ 150.00, Police False Alarm 11/03/14 jHomeland Security 000 PF- 02613 $ 200.00 Police False Alarm 12/06/13 iPipeline Industries 000 PF -02386 j $ 25.00 = Police False Alarm Total False Alarms $ 411.07 For Police False Alarm Notes To collections 04/24/14-no assets or income To collections 4/23/14- balance after pymt from collection agency To collections 03/18/15- will not respond to collections To collections 03/18/15- will not respond to collections To collections 4/24/14- business closed 3/30/15 iscellaneous Billings Date Customer Fund # Invoice /Ck # Amount 05/30/14 lAirpro Equipment Inc. 000 RF -01120 $ 60.00 05/01/13 Amara Pointe Apartments -GWP 000 RF -00991 „ $ 60.00 06/21/13 Amara Pointe Apartments -GWP 000 RF- 01005 $ 85.00 07/08/13 Amara Pointe Apartments -GWP 000 RF- 01009 $ 110.00 07/31/13 Amara Pointe Apartments -GWP 000 RF- 01023 $ 135.00 01/17/14 'Arden B 000 RF- 01069 $ 26.36 For Fire Re- Inspection Fee 12/31/13 Aaron Clark 000 MB -01445 $ 2,696.35 03/14/13 Courtyard at South Station Apts 000 RF -00942 $ 60.00 05/30/14 ;Courtyard at South Station Apts 000 RF- 01126 ' $ 60.00 07/22/14 j Courtyard at South Station Apts 000 RF -01162 '; $ 85.00 12/17/13 - Emporio 000 RF -01050 L$ 60.00 12/31/13 Raage Farah /Geico Insurance 000 MB- 01439 , $ 7,678.36 12/30/15 ! Info Only -Hit and Run 000 MB- 02074 $ 18 573.22 12/30/15 'Info Only -Hit and Run 000 07/10/14 ,Yuanshan Jiang 401 01/17/14 I Mad Pizza 000 08/12/14 Muna Mini Mart 000 02/19/14 Sunrise Suite Apartments 000 08/18/14 Christopher Tjarneberg 000 Total Misc. Billings MB -02075 $ 8,186.81 UM -00037 $ 4,301.24 RF -01074 RF -01182 RF-01099 $ MB- 01596 ^; $ $ Date ; Customer 8/18/14 Sabreah Mason 8/28/14 ,Sabreah Mason 6/26/15 !Jhinea Martinez 7/24/15 Jason Robbins Total Returned Checks Fund # Invoice /Ck # 000 1121 $ 000 1123 $ 000 1105 $ 411 1113 $ Write -off Grand Total Fire Re- Inspection Fee Fire Re- Inspection Fee Fire Re- Inspection Fee Fire Re- Inspection Fee Fire Re- Inspection Fee Replace streetlight pole Fire Re- Inspection Fee Fire Re- Inspection Fee .._Fire Re- Inspection Fee Re Inspection Fee Repair signal head, new jersey barrier Replace streetlight pole and cabinet Replace guardrail Replace fire hydrant Fire Re- Inspection Fee Fire Re- Inspection Fee Fire Re- Inspection Fee Replace complete light pole assembly Notes To collections 9/15/14-business closed 3/12/15 To collections 11/25/13 ,To collections 11/25/13 To collections 11/25/13 To collections 11/25/13-closed under this owner 5/24/12 Balance after payment from collection agency To collections 4/24/14- DUI and no insurance To collections 6/6/13 To collections 9/22/14 To collections 11/20/14 To collections 4/24/14- business closed 6/30/14 In dispute with Geico Insurance Hit and run- party who caused damage is unknown Hit and run- party who caused damage is unknown To collections 10/14/14- no insurance 25.00 To collections 4/24/14- business closed 2/25/15 -bal after collections 60.00 To collections 11/20/14 but business had changed hands by then 60.00 , To collections 4/24/14 4,402.34 ! jTo collections 12/22/14 -no insurance & driving while lic suspended 46, 724.68 Returned Checks Amount For 200.00 Summer Camp -TCC 200.00 Summer Camp -TCC 90.00 '', Summer Camp -TCC 54.71 Greens Fees & Putter 544.71 Notes To collections 10/20/14 To collections 10/20/14 To collections 08/14/15 To collections 9/4/15 $ 47, 680.46 Write -offs 08.31.16- Attachment A.xlsx 9/28/2016 12 FINANCE AND SAFETY COMMITTEE Meeting Minutes City Council Finance and Safety Committee October 4, 2016 - 5:30 p. m. - Hazelnut Conference Room, City Hall Councilmembers: Verna Seal, Chair; Dennis Robertson, Kate Kruller Staff: David Cline, Mike Villa, Marty Grisham, Brandon Miles, Gail Labanara, Peggy McCarthy, Vicky Carlsen, Jake Berry, Derek Speck, Laurel Humphrey Guest: Jerry Thornton, Community Police Advisory Board member CALL TO ORDER: Chair Seal called the meeting to order at 5:30 p.m. I. PRESENTATIONS 11. BUSINESS AGENDA A. Interlocal Agreement: South King County Fire Training Consortium Staff is seeking Council approval of an interlocal agreement to continue participation in the South King County Fire Training Consortium in the amount of $52,108.00 for a term from January 1, 2017 through December 31, 2019. Participation in the Consortium has continued to be beneficial to the Fire Department and to the City. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 10, 2016 COMMITTEE OF THE WHOLE. B. Resolution: Orderine the Cancellation of 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 $411.07, miscellaneous billings equaling $46,724.68 and NSF checks equaling $544.71 for a total of $47,680.46. Councilmember Robertson asked for additional detail regarding the fire re- inspection fees at Amara Pointe Apartments back in 2013. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 17, 2016 REGULAR CONSENT AGENDA. C. Lodging Tax Approval Process Staff is seeking Council approval of a proposed process for approval of lodging tax applications. The City collects a 1% excise tax on overnight lodging stays which can be spent on tourism promotion if approved by the Lodging Tax Advisory Committee (LTAC) and the City Council. The Washington State Attorney General recently issued an informal opinion that municipalities could change the dollar amounts recommended by the lodging tax advisory committee if the advisory committee is given 45 days' notice before the City Council takes final action. This differs from past interpretation of state law and Tukwila's practice in which the Council only approved or denied recommendations from LTAC. 13