HomeMy WebLinkAboutFIN 2024-09-23 Item 1C - Resolution - Cancellation of Past Due Accounts ReceivableCity of Tukwila
Thomas McLeod, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance & Governance Committee
FROM: Tony Cullerton, Interim Finance Director
BY: Cindy Wilkins, Fiscal Specialist
CC: Mayor McLeod
DATE: September 23, 2024
SUBJECT: Cancellation of Uncollectable Accounts Receivable
ISSUE
Each year a resolution comes before the Council for the cancellation of uncollectable accounts
receivable. For 2024, these items include:
• Community Development invoice
• Fire False Alarms
• Police False Alarms
• Public Works invoices
GRAND TOTAL:
$6,000.00
7,000.00
18,300.00
11,675.11
$42,975.11
BACKGROUND
The process for tracking accounts receivable is quite thorough. The steps below are followed
prior to preparation of the attached write-off resolution.
• The Finance Department sends an invoice to a customer, payable in 30 days.
• If payment is not received within 30 days, the receivable is forwarded to our collection
agency, Armada, and placed into pre -collect status.
• Next, 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 in pre -collect status have passed, 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 change in status from pre -collect to active collections and advising that payments must
now be made through the collection agency.
• When 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 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.
• 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 2024 Cancellation of Accounts Receivable is $42,975.11. This is
an annual housekeeping item.
13
INFORMATIONAL MEMO
Page 2
FINANCIAL IMPACT
The financial impact of cancelling $42,975.11 will be to reduce our accounts receivable balance
by this amount. Please note that while we are writing off the accounts receivable for accounting
purposes, the accounts are still being actively worked on for collection purposes except for
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
October 7, 2024.
ATTACHMENTS
Proposed Draft Resolution
Attachment A — 2024 AR Write -Offs
Attachment B — Historical Write -Offs
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ORDEING THE
CANCELLATION OF PAST DU ACCOUNTS
RECEIVABLES
WHEREAS, certain receivables have been teemed u lectable after efforts by
the City have been unsuccessful; and
WHEREAS, the City's collection agency,a, will continue to pursue these
receivables when practical;
NOW, THEREFORE, THE CITY O ' aF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESO S A' LO ' S:
Miscellaneous Accou e total of $42,975.11 (per Attachment A)
is deemed uncollectable.
PASSED BY TH • IL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting
ATTEST/AUTHENTICA
Andy Youn, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
Attachment A: 2024 AR Write -Offs
Mohamed Abdi, Council President
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
2024 Legislation: Cancellation of past due accounts receivables
Version: 09/18/2024
Staff: S. Wright Reviewed by: Melissa McCormick Page 1 of 1
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16
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Attachment B - Historical Write -Offs
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 2001
2020
$ 17,285.74
Resolution 2031
2021
$ 5,492.03
Resolution 2051
2022
$ 34,324.45
Resolution 2078
2023
$ 70,835.55
19