Agenda Item No: N.12
AGENDA REPORT
DATE: October 21, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025 -206 FN Authorizing the Director of Finance to Write Off Uncollectible Debt
Authorizing the Director of Finance to Write Off Uncollectible Debt
Funding Source: N/A
Contact: John Furtado, (707) 428-7629
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
In addition to proactively collecting the City’s delinquent accounts, it is also important to write off the City’s uncollectible debts to ensure the City’s financial statements are reflected correctly.
DISCUSSION
The attached resolution authorizes the director of finance to write off uncollectible utility accounts and non-utility accounts. In response to comments provided by its external auditor, the City adopted a policy that requires the council to approve the write-off of accounts with balances greater than or equal to $1,000. There are 23 uncollectible utility accounts that closed between July 1, 2019, and June 30, 2025, and are in excess of $1,000 for a total of $58,066 ($12,979 – Sewer and $45,087 – Water). These are detailed in Exhibit A. It should be noted that such write- offs are not a relinquishment of the City’s claim for debts due to the City. Even after writing off accounts that are deemed uncollectible, the Finance Department will continue to pursue collection on the accounts to the extent legally possible.
The total water write-off amount is $381,256 made up of 1,758 accounts. The total sewer write- off amount is $262,428 made up of 1,542 accounts.
FINANCIAL IMPACT
The Finance Department establishes reserves for bad debt to cover potential write -offs for uncollectible accounts. The bad debt reserves are funded as an estimate of total billings each year. The accounts recommended for bad debt write-off will be offset by the bad deb t reserves that have been established. During the City’s annual external audit of the City’s financial statements, the City’s external auditors review the City’s bad debt exposure as well as the adequacy of the bad debt reserves.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
City Council may choose not to approve the resolution, which would result in inaccuracies in the City’s financial statements.
COORDINATED WITH
N/A
STAFF CONTACT
John Furtado, Director of Finance
(707) 428-7629
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Exhibit A