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Home My WebLink AboutFIN 2020-09-14 Item 1B - Resolution - Cancellation of Past Due Accounts PayableCity of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Vicky Carlsen, Finance Director BY: Cindy Wilkins – Fiscal Specialist CC: Mayor Ekberg DATE: September 14, 2020 SUBJECT: Cancellation of Accounts Receivable Updated after the Finance Committee Meeting on Monday, September 14, 2020 ISSUE Each year a resolution comes before the Council for the cancellation of uncollectable accounts receivable. For 2020, these items include: False Alarms equaling $2,650.00, Miscellaneous Billings equals $14,635.74 for a grand total of $17,285.74. 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 the 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 has 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. When 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 collection process. DISCUSSION The proposed amount of the 2020 Cancellation of Accounts Receivable is $17,285.74. This is an annual housekeeping item. FINANCIAL IMPACT The financial impact of cancelling $17,285.74 will be to reduce our accounts receivable balance by this amount. Please note that while we are writing off the accounts receivable for accounting 5 INFORMATIONAL MEMO Page 2 purposes., the accounts are still being actively worked for collection purposes with the exception of those accounts where a responsible party cannot be identified. Accounts covered by bankruptcy law cannot be pursued. RECOMMENDATION The Council is being asked to approve the annual resolution authorizing the cancellation of Accounts Receivable and to forward this item to the Regular Meeting Consent Agenda of 9/21/20. ATTACHMENTS Attachment A – 2020 AR Write-Offs 2018 and Prior Attachment B – Historical Write-Offs 6 :?:RUG3URFHVVLQJ?5HVROXWLRQV?3DVW 'XH$FF WV5HFHLYDEOHV &:EMV 5HYLHZDQGDQDO\VLVE\%DUEDUD6D[WRQ 3DJHRI $5(62/87,212)7+(&,7<&281&,/2)7+( &,7< 2) 78.:,/$:$6+,1*72125'(5,1* 7+(&$1&(//$7,212)3$67'8($&&28176 5(&(,9$%/( :+(5($6FHUWDLQUHFHLYDEOHVDQGFKHFNVKDYHEHHQGHHPHGXQFROOHFWDEOHDIWHU HIIRUWVE\ERWKWKH&LW\DQGDFROOHFWLRQDJHQF\KDYHEHHQXQVXFFHVVIXODQG :+(5($6LQWKHHYHQWRIQHZLQIRUPDWLRQWKH&LW\ZLOOFRQWLQXHWRSXUVXHWKHVH UHFHLYDEOHVZKHQ HYHU SUDFWLFDO 12: 7+(5()25( 7+( &,7< &281&,/ 2) 7+( &,7< 2)78.:,/$ :$6+,1*721+(5(%<5(62/9(6 $6)2//2:6 0LVFHOODQHRXV$FFRXQWV5HFHLYDEOH 7KH WRWDORISHU$WWDFK PHQW$ LVGHHPHGXQFROOHFWDEOH 3$66('%<7+(&,7<&281&,/2)7+(&,7<2)78.:,/$:$6+,1*721DW D5HJXODU0HHWLQJWKHUHRIWKLVBBBBBBBGD\RIBBBBBBBBBBBB BBBBB $77(67$87+(17,&$7(' &KULVW\2 )ODKHUW\00&&LW\&OHUN 'H¶6HDQ4XLQQ&RXQFLO3UHVLGHQW $33529('$672)250%< )LOHGZLWKWKH&LW\&OHUN 3DVVHGE\WKH&LW\&RXQFLO 5HVROXWLRQ1XPEHU 2IILFHRIWKH &LW\$WWRUQH\ $WWDFKPHQW $:ULWH2IIV 7 Attachment A - 2020 Write-Offs Acct #Customer Name Date Invoice #Billing Description GL Account Amount Notes 000154 KRAMER KONSTRUCTION 09/11/18 RT-00076 REINSPECTION TENANT FEES R 000.342.400.02.00 100.00 To Collections 1/27/2020 100.00$ 000104 BEVERLY NUAMAH 04/17/18 PF-03742 POLICE FALSE ALARM #3 R 000.342.800.00.00 150.00 To Collections 10/8/2019 SOMALI SOMGRO Inc 05/31/18 PF-03754 Police False Alarm #3 R 000.342.800.00.00 150.00 To Collections 8/10/2018 000104 BEVERLY NUAMAH 07/05/18 PF-03782 POLICE FALSE ALARM #4 R 000.342.800.00.00 200.00 To Collections 10/8/2019 000125 TOYS R US DELAWARE INC 07/05/18 PF-03775 POL FALSE ALARMS #3-7 R 000.342.800.00.00 950.00 To Collections 10/8/2019 000146 JET FUEL ESPRESSO 08/29/18 PF-03808 POL FALSE ALARM #3 R 000.342.800.00.00 150.00 To Collections 1/27/2020 000193 Seattle Char/Habit Burger 11/14/18 PD-00178 Police False Alarm #3 R 000.342.800.00.00 150.00 To Collections 10/8/2019 000180 Electronic Service Provider 11/17/18 PD-00152 Police False Alarm #3 R 000.342.800.00.00 150.00 To Collections 8/17/2020 000104 BEVERLY NUAMAH 11/19/18 PD-00205 POLICE FALSE ALARM #5 R 000.342.800.00.00 200.00 To Collections 8/17/2020 000146 JET FUEL ESPRESSO 11/19/18 PD-00201 POLICE FALSE ALARM #4 R 000.342.800.00.00 200.00 To Collections 1/27/2020 000207 Church by the Side of the Road 12/17/18 PD-00222 Police False Alarm #3 R 000.342.800.00.00 150.00 To Collections 10/8/2019 000193 Seattle Char/Habit Burger 12/29/18 PD-03843 Police False Alarm #4 R 000.342.800.00.00 200.00 To Collections 10/8/2019 2,650.00$ EZELL EDWARD EZELL 07/20/17 MB-02619 Property Damage WORK ORDER 21701601 R 000.344.100.00.00 12,378.28 To Collections 10/13/2017 000258 JASMINE LYONS 12/31/18 PM-00113 Property Damage WO 21801607 CASE 18-7205 R 000.344.100.00.00 2,157.46 To Collections 10/8/2019 14,535.74$ Total Write-Offs: 17,285.74$ 8 Attachment B - Historical Write-Offs Resolution 1777 2012 8,777.89$ Resolution 1805 2013 30,702.97$ Resolution 1843 2014 36,240.62$ Resolution 1865 2015 27,887.91$ Resolution 1893 2016 47,680.46$ Resolution 1916 2017 9,005.25$ Resolution 1948 2018 12,832.35$ Resolution 1969 2019 53,109.56$ Resolution 2020 2019 Cancellation of Accounts Receivables - Finance Committee 092319 9