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HomeMy WebLinkAboutReg 2012-10-15 Item 4C - Resolution - Cancellation of Past Due Accounts Receivable and Returned Check Write-OffsCOUNCIL AGENDA SYNOPSIS Initials Meefin Date Prepared b M ors review Council review 10/15/12 PM ITEM INFORMATION ITEMNO. 4.C. STAFF SPONSOR: PEGGY MCCARTHY ORIGINAL AGENDA DATE: 10/15/12 AGENDA ITEM TITLE Resolution Ordering the Cancellation of Past Due Accounts Receivable CATEGORY Discussion Mtg Date Motion Mtg Date Resolution Mtg Date 10/15/12 Ordinance Mtg Date Bid Award illltg Date Public Hearing Mtg Date Other Mtg Date SPONSOR Council Mayor HR DCD Finance Fire IT P &R Police PWI 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: 10/02/12 COMMITTEE CHAIR: QUINN RECOMMENDATIONS: SPONSOR /ADMIN. Finance Department COMMITTEE Unanimous Approval; Forward to Consent Agenda 10/15/12 COST IMPACT FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 10/15/12 MTG. DATE ATTACHMENTS 10/15/12 Informational Memorandum dated 9/30/12 Resolution in draft form with Attachment A Minutes from the Finance and Safety Committee meeting of 10/2/12 2 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 30, 2012 SUBJECT: Cancellation of Accounts Receivable ISSUE Each year a resolution comes before the Council for the cancellation of uncollectible accounts receivable. For 2012, these items include: False Alarms equaling $25.00, Miscellaneous Billings equaling $8,423.64 and NSF checks equaling $329.25 in the total amount of $8,777.89. 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, a second notice is sent specifying due date, after which, the receivable will be forwarded to the collection agency. The collection agency sends a series of three letters for the original amount due, with the final letter advising that legal action will be taken if payment is not made. If there is no response from debtor to the letter series, the debt is then reported to the national credit bureaus. After the debtor is given a final opportunity to dispute the claim, the collection agency then pursues legal action. This includes attaching checking accounts, garnishments, lawsuits and other legal methods. Note: Effective September 1, 2012 the City has changed collection agencies from Evergreen Professional Recoveries to Armada Corp. This change will bring about a Web- based, more efficient and streamlined collections process saving the City both time and money. Another advantage to using Armada is that the City will receive weekly payments of amounts collected, rather than payment on a monthly basis as in the past. DISCUSSION The proposed amount of the 2012 cancellation of Accounts Receivable is significantly lower than in prior years. This is attributable to two main factors: Our new TMC regarding business licensing allows us to withhold a business license until such time any debt owed by the licensee to the City has been paid. As such, debtors who had not responded to our requests for payment are now paying their debts in order to have their business license issued. There were only two Street Department billing cancellations for 2012 (compared to 8 in 2011). One billing was an unknown hit and run ($3,372.70). The other, ($4470.94), reflects the balance due after a $10,000.00 payment by debtor's insurance company. These two billings together comprise 89% of this year's cancellations. 3 INFORMATIONAL MEMO Page 2 FINANCIAL IMPACT The financial impact of cancelling $8,777.89 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. 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 15, 2012 Regular Meeting. ATTACHMENTS Draft Resolution with Attachment A. 4 WA2012 Info Memos- CounciMccountsReceivable.doc ;CI'ty of Tukwi LIVIA 01 1 IN 1604 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 WASHINGT NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, i' Miscellaneous Accounts Receivable and Returned Checks. The total of $8,777.89 (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 2012. Christy O'Flaherty, MMC, City Clerk 9 Verna Seal, Council President Filed with the City Clerk:_ Passed by the City Council: Resolution Number: Shelley M. Kerslake, City Attorney Attachment A Past -Due Accounts Receivable and Returned Check Write -offs as of September 30, 2012 WAVVord Processing\Resolutions\Past Due Accts Recv Write -offs 9 -18 -12 LA: bjs Page 1 of 1 5 N attachment a past due accounts receivable and returned check write-offs as of 9/30/2012 n.* City Of Tukwila Finance and Safety Committee FINANCE AND SAFETY COMMITTEE Meeting Minutes October 2, 2012 5:15p.m.; Conference Room 93 PRESENT Councilmembers: De'Sean Quinn, Chair; Dennis Robertson and Kate Kruller Staff: David Cline, Peggy McCarthy, Vicky Carlsen, Chris Flores, Bob Giberson, Bob Benedicto, Gail Labanara and Kimberly Matej CALL TO ORDER: Committee Chair Quinn called the meeting to order at 5:15 I. PRESENTATIONS No presentations. II. BUSINESS AGENDA A. Resolution: Annual Cancellation of Accounts Receivable (Past Due and Returned Checks) Staff is seeking Council approval of an annual resolution to cancel (write -off) account receivables deemed uncollectible. This year's annual account receivable write -off totals $8,777.89. Staff reviewed the process by which Accounts Receivable determines items as uncollectible. This year's write -offs are lower than last year's which can be attributed to: less accidents caused by unknown or uninsured motorists, and a change to the Tukwila Municipal Code which withholds business licenses and /or renewals until such debts are paid to the City. The City is also utilizing a different debt collection agency. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 15 CONSENT AGENDA. B. Resolution: Annual Cancellation of Outstanding Claims and Unredeemed Property At staff request, this item has been moved to the October 16, 2012, Finance Safety Committee meeting. New information has become available that may affect the processing of this annual cancellation. RETURN TO OCTOBER 16 FINANCE SAFETY COMMITTEE MEETING. C. Proposed Facilities Plan Staff is seeking Committee confirmation of the need for a Facilities Plan for the City, as well as input on the proposed Facilities Plan included in the Committee agenda packet. Staff utilized a PowerPoint presentation to provide the Committee with an overview and summary of a proposed Facilities Plan, which outlines options for the replacement and /or retrofit of City buildings. After the presentation, and a brief discussion, the Committee confirmed that there is a need for the City to have a Facilities Plan. Additional comments from the Committee Members are bulleted below: Committee Member Robertson: Believes that a Facilities Plan is the right thing to do; however, it appears to be more logical to wait for the conclusion of the Strategic Plan to ensure the Facilities Plan is supported by the Strategic Plan outcomes. Has some inquiries about prioritization, but relates prioritization back to the conclusion of the Strategic Plan. Committee Member Kruller: Believes there may be some timing concerns in consideration of the current economy. Requested benchmarking to identify what similar and /or surrounding jurisdictions are doing in regard to facilities.