Item 239/2024
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Patricia Song
Dept:
City Manager Dept: Finance
Date: June 11, 2024
Subject: Adoption of a Resolution establishing an Unclaimed Property Policy (Action Item)
OBJECTIVE
For the City Council to adopt the attached resolution establishing the City of Garden Grove Unclaimed Property Policy.
BACKGROUND
Unclaimed property is generally defined as any financial asset left inactive by its owner for a period of time, typically three years. Per State Government Code sections 50050 -50057, funds held by the City which remain unclaimed for a period of over three years, after the City exhaust its effort to return such funds to the proper owners, maybe escheated by the City.
Escheat is the legal process of lapsing or reverting ownership of unclaimed private property to the government by operation of law. The City follows the Government Codes and establishes the attached Unclaimed Property Policy to provide the proper procedures to escheat long standing unclaimed checks and deposits and to ensure the propriety of the related accounting transactions.
DISCUSSION
The Unclaimed Property Policy is established to provide the proper mechanism to process and potentially escheat long-standing unclaimed checks issued and deposits held by the City of Garden Grove.
Unclaimed checks are payments issued by the City, which are not cashed by their recipients within 180 days after the date of issue. Unclaimed deposits are refundable deposits that meet the refund eligibility, or payments that did not clear the recipient’s financial institution, which have been unclaimed for a period of over three years. For funds held by the City which remain unclaimed for a period of over three years, per Government Code sections 50050 - 50057, the City must make every effort to return such funds to the proper individuals.
Sections 50050-50051 require the list of unclaimed checks and deposits be published as a public notice once a week for two consecutive weeks in a newspaper of general circulation published in the local agency. The unclaime d funds shall then become the property of the City on a designated date not less than 45 days nor more than 60 days after the first publication of the notice. Section 50052 provides guidelines for the claiming process.
Item 239/2024
Section 50053 states that if such money becomes the property of the City and is in a special fund, the City Council may authorize to transfer it to the General Fund of the City. Per Section 50055, any unclaimed funds that are less than fifteen dollars ($15.00) and more than one - year-old, can be transferred to the General Fund without the publication of a notice.
A review of unclaimed funds will be completed annually. Prior to publishing the notice, the City will attempt to contact the owners for amounts greater than $500. For unclaimed checks, a list will be published on the City’s official website, along with i nstructions to claim such funds, including the Claim Form and required supporting documentations. The Finance Director or his/her designee will review the claims and make determination for approval or denial. When unclaimed funds become the property of the City of Garden Grove, the money will be recorded in the funds where original payments were made from, unless the City Council authorizes the funds be recorded in the City’s General Fund.
The Unclaimed Property Policy adheres to the California Government Codes, and was established following best practices to ensure transparency and compliance. The Policy was reviewed and approved by the Committee on Operations and Organizational Policies (COOP) on May 23, 2024.
FINANCIAL IMPACT
There is no financial impact to adopt the attached resolution establishing the City of Garden Grove Unclaimed Property Policy.
RECOMMENDATION
It is recommended that the City Council:
• Adopt the attached Resolution establishing the City of Garden Grove Unclaimed Property Policy.
ATTACHMENTS
1. Resolution establishing the City of Garden Grove Unclaimed Property Policy
2. City of Garden Grove Unclaimed Property Policy