RESOLUTION NO. 24-____
Resolution authorizing the write-off of uncollectible housing loan receivables with a $2.6 million balance, including a $638,310 in penalties due to foreclosure, bankruptcy, and business closures and THE restructuring of non-performing loans that have overdue balances.
WHEREAS, the staff has furnished a schedule reflecting an uncollectible housing loan receivables balance of $2.6 million due to foreclosure, bankruptcy, and business closures, including $638,310 in penalties. The staff recommends that these accounts be written off; and WHEREAS, it is in the best interest of the Housing Successor to follow Generally Accepted Accounting Principles (GAAP) to not overstate assets and income; and WHEREAS, the Code of Federal Regulations (24 CFR 902.33), as further defined by the Department of Housing and Urban Development in supplementary guidance, requires that financial reports shall be prepared in accordance with GAAP, which dictate that Account Receivables be stated at the net realizable value; which is the gross receivable less the allowance for doubtful accounts, and that bad debts are to be written-off if accounts are deemed to be uncollectible; and WHEREAS, restructure non-performing loans that have overdue balances and staff will develop an administrative plan to restructure non-performing loans.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hercules, that the City Manager is authorized to dispense with certain uncollectible and non-performing loans and penalties as follows:
Write-off loans with a $2.6 million balance that are uncollectible due to foreclosures, bankruptcy, and business closures as summarized in Table 2.
Write-off or forgive $638,310 in penalties for 45 loans as summarized in Table 2.
Restructure non-performing loans that have overdue balances. City staff will develop an administrative plan to restructure non-performing loans and present it to City Council at a future meeting.
The foregoing Resolution was duly and regularly adopted at a regular meeting of the Public Financing Authority of the City of Hercules held on the 9th of July 2024, by the following vote of the Council:
AYES:
NOES:
ABSTAIN:
ABSENT:
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Dan Romero, Mayor
ATTEST:
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Eibleis Melendez, City Clerk