Agenda Report
Fullerton City Council
MEETING DATE: AUGUST 20, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: ELLIS CHANG, DIRECTOR OF ADMINISTRATIVE SERVICES PREPARED BY: TONI SMART, DEPUTY DIRECTOR OF ADMINISTRATIVE SERVICES SUBJECT: APPROVED WRITE-OFFS BY CITY MANAGER AND WRITE-OFFS REQUIRING CITY COUNCIL APPROVAL REPORT
SUMMARY
This report contains delinquent accounts receivable balances under $50,000 approved for write-off by the City Manager and write-offs over $50,000 requiring City Council approval.
PROPOSED MOTION
Receive and file delinquent accounts receivable balances under $50,000 approved for write-off by the City Manager.
Approve delinquent accounts receivable balances over $50,000 write-off.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Do not receive and file
Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
The two largest write-offs have to do with property damage. The City received insurance payments to fullest extent on both claims.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
All write-offs reflected in this report increase expenditures in the 2023-24 Fiscal Year by $474,889.81. $41,317.97 of that amount is attributable to the General Fund.
Staff requests City Council approval to write-off $358,344.41 of outstanding accounts receivable balances. These balances relate to two separate property damage claims which the City has accepted insurance settlements for.
Accounting standards require write-off of accounts receivables when staff determines the receivable likely uncollectible. However, staff may continue collection efforts after write-off.
BACKGROUND AND DISCUSSION
City Council adopted Resolution No. 2023-017 on March 7, 2023 granting City Manager authority to write-off certain accounts under $50,000 deemed uncollectable. Additionally, City Council approved the amended Statement of Financial Policies, adding Section 10 to clarify the processing, collecting and disposing of delinquent receivable balances that included annually informing City Council of write-offs approved by the City Manager in the preceding fiscal year.
Invoices requested for write-off approval have either exceeded the statute of limitations for collection, determined uncollectable by Departments after exhausting collection efforts or include the remaining balance of property damage claims after accepting insurance settlements. Fiscal year-end audit procedures require review and assessment of collectability of outstanding accounts receivables. Accounting standards require receivables write-off when the City determines accounts receivable uncollectible.
The City Manager authorized $474,889.81 write-off in uncollectable receivables on August 1, 2024. This amount included two property damage invoices with a remaining $358,344.41 balance that exceeded the $50,000 authorized limit after Risk Management acceptance of insurance settlements.
Attachments:
Attachment 1 – Write-off Report
cc: City Manager Eric J. Levitt
Approved Write-Offs By City Manager and Write-Offs Requiring City Council Approval August 20, 2024 - Page PAGE \* MERGEFORMAT 2