Agenda Report
Fullerton City Council
MEETING DATE: March 7, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: Ellis chang, director of administrative services PREPARED BY: TONI SMART, FISCAL SERVICES MANAGER
SUBJECT: uncollectible accounts receivable Write-off authority
SUMMARY
City Council consideration to grant City Manager write-off authority and approve amendments to the Statement of Financial Policies regarding processing, collecting and disposing of uncollectible accounts receivable across City departments.
RECOMMENDATION
Adopt Resolution No. 2023-XXX.
RESOLUTON NO. 2023-XXX - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FULLERTON, CALIFORNIA, GRANTING AUTHORITY TO THE CITY MANAGER TO WRITE OFF CERTAIN ACCOUNTS DEEMED UNCOLLECTIBLE Approve amended Statement of Financial Policies, adding Section 10 Delinquent Accounts Receivable, to clarify the processing, collecting and disposing of delinquent accounts receivable balances and require City Manager approval to write-off uncollectable accounts receivable balances under $50,000.
CITY MANAGER REMARKS
The City Manager and Administrative Services Director are looking for City Council to consider approval of writing off receivables that are greater than three years old or considered uncollectable. In addition, we have proposed a policy moving forward.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
This action would generate an approximate $219,000 one-time write-off of uncollectable receivables over three years old or approved as uncollectable by departments in FY 2022-23. Staff projects $105,000 of the write-off attributable to the General Fund. The $114,000 balance includes a $62,125 uncollectable balance in the Airport Fund from 2009. The remaining $51,875 comprises uncollectable balances included in Special Revenue and other Funds.
DISCUSSION
Staff determined the need for a consistent procedure for processing, collecting and disposing of uncollectible account balances while implementing the general and utility billing system. Staff is working with the new system consultants to set up the system in alignment with the Statement of Financial Policies Section 10, Delinquent Accounts Receivable and that the City Manager may approve writing-off amounts deemed uncollectable under $50,000. City Council approved initial write-offs of delinquent receivables over three years old on September 20, 2022 as part of this effort. Staff have continued to perform a review of accounts deemed uncollectable due to the statute of limitations or uncollectable based on discussions and approval from departments and has identified approximately $216,000 for immediate write-off. The initial write-off of uncollectable receivables ensures staff brings only collectable balances into the new system planned for June 2023 a go-live date. Staff will provide a list of all accounts written off to City Council shortly thereafter. Staff will adhere to the approved Statement of Financial Policies Section 10, Delinquent Accounts Receivable after the initial write-off and annually write-off and report to City Council thereafter.
Attachments:
Attachment 1 – Draft Resolution No. 2023-XXX
Attachment 2 – Statement of Financial Policies, Amended Draft cc: City Manager Eric J. Levitt
Uncollectible Accounts Receivable Write-Off Authority
March 7, 2023 - Page 2