ITEM 4.6
CITY MANAGER' SREPORT
AUGUST 10, 2026 CITY COUNCIL REGULAR MEETING
ITEM: APPROVE WRITE- OFF OF UNCOLLECTIBLE UTILITY
AND MISCELLANEOUS CUSTOMER ACCOUNTS FOR
FISCAL YEAR 2025/6
RECOMMENDATION: Adopt Resolution to Approve Write -Off of Uncollectible Utility and Miscellaneous Accounts for
Fiscal Year ( FY) 2025/6
SUMMARY:
Generally Accepted Accounting Principles ( GAAP) and Governmental Accounting Standards Board ( GASB) require municipalities to evaluate and write- off delinquent accounts that are deemed uncollectible. As part of the annual audit process and in compliance with both GAAP and GASB requirements, the Finance Department has reviewed unpaid delinquent accounts assigned to collections. After a thorough review, staff has determined $ 192,73 to be uncollectible for FY 2025/6as detailed in Table 1 below:
My v
Customer
Account Type
FY 2024/5
Approved
Write -Offs
FY 2025/6
Recommended
Write -Offs
Increase/
Decrease)
oho
No. of
Accounts to
be Written -
Off
Utility Customers
Residential and
Commercial) 110, 610 131, 665 19. 04% 296
Miscellaneous
Customers 0 60, 508 8
Totals 110, 610 192,73 304
The recommended utility write- offs represent 0. 78% of the annual water and sewer charges billed to customers in FY 2025/6. The utility debt includes amounts from customers who have closed their account with the City without settling their final bills. The utility write- off amount in FY 2025/6has increased by $ 21, 055.0or
19. 04%, from the prior fiscal year.
The recommended miscellaneous write- off amount of $ 60, 508 include charges rendered by City Attorney' s
Office. These charges include property damage, labor
costs, material and repairs.
Although these accounts will reflect as " written off" in the City' sfinancial system, additional collection measures are in place to seek repayment. For instance, the collection agency will continue to pursue repayment efforts on these accounts and forward any recovered payments to the City.
Tonight, Staff is requesting Council' sapproval to write- off $192,73 of uncollectible utility and miscellaneous charges.
CITY MANAGER' SREPORT PAGE 2
AUGUST 10, 2026 CITY COUNCIL REGULAR MEETING
UNCOLLECTIBLE UTILITY AND MISCELLANEOUS CUSTOMER ACCOUNTS BACKGROUND:
On May 19, 1998, the City Council of the City of Lathrop adopted Resolution 98- 664 regarding the approval and implementation of a revenue collection policy. On October 18, 2010, Council authorized the execution of an agreement with Golden State Collections, LLC.
The collection policy was established to help decrease the number of delinquent accounts ( 60- 90 days). After unsuccessful collection attempts by City staff, the policy allows City staff to refer customers' accounts that remain unpaid for 60- 90 days to the collection agency for collection proceedings. The collection agency operates on a commission - based structure. Their fee is 30% of the total amount collected.
Currently, there are two types of customer accounts referred to the collection agency:
utility and miscellaneous customer accounts. The utility customer accounts include charges for water and wastewater who have closed their account with the City without paying their final bill. Miscellaneous customer accounts include charges rendered by:
Finance, City Attorney' sOffice, Animal Control, Community Development, Police, Parks & Recreation, and Public Works. Charges include animal impound, unpaid business license and programming fees, court ordered restitution, materials/ equipment, and checks returned for insufficient funds.
Utility Customer Accounts
During FY 2025/6, Golden State Collections, LLC, received claims for further collection processed on 213 delinquent utility customer accounts totaling $ 110, 610.
Of the $ 110, 610 assigned to Golden State Collections, LLC, the agency recovered 951 from 10 customer accounts recorded on the current and prior year claims. This represents a 0. 86% recovery rate from the total amount referred ( see Table 2).
Table 2.
Utility Customer Accounts
FY
2022/3
FY
2023/4
FY
2024/5
Total Utility Customers 9, 895 10, 528 11543
Accounts Sent to Collection Agency 198 226 213
Amount Assigned to Collection Agency 184, 313 120, 620 6110,0 Amount Recovered by Collection Agency 54, 658 927 s951
Recovery Rate 2. 52% 0. 77% 0. 86%
Total Write -Offs 184, 313 120, 620 110, 610
The utility write- off amount in FY 2025/6has increased by $ 21, 055 or 19. 04%. Of the 296 utility customer accounts, there are 103 residential accounts with past due CITY MANAGER' S REPORT PAGE 3
AUGUST 10, 2026 CITY COUNCIL REGULAR MEETING
UNCOLLECTIBLE UTILITY AND MISCELLANEOUS CUSTOMER ACCOUNTS balances of $ 500 or more. These accounts total approximately $ 81, 000 and makes up for 61. 52% of the overall utility write off amount.
Staff will continue to re -enforce current programs that offers payment assistance, such as extending payment due date or granting payment arrangement to utility customers carrying past due balances. In addition, the Finance Department conducts a review of all new customers prior to establishing service to ensure there are no outstanding balances.
Miscellaneous Customer Accounts
Miscellaneous customer accounts referred to collections for FY 2025/6 totaled 60, 508 from 8 accounts related to City Attorney' sOffice, as summarized in Table 3.
City Attorney' s office attempts to collect from individuals and insurance claims due to property damage, labor costs, material and repairs.
Table 3.
Miscellaneous
Customer Accounts
Animal
Services
Public
Works
Parks
Rec Misc.
FY
2025/6
Accounts Sent to Collection
Agency
0 0 0 8 8
Amount Assigned to
Collection Agency
0 0 0 60, 508 60, 508
Amount Recovered by
Collection Agency
0 0 0 0 0
Total Write- offs 60, 508
REASON FOR RECOMMENDATION:
The Finance Department has conducted a thorough review of the utility and miscellaneous customer accounts and recommends $ 192,73 to be considered uncollectible. By approving the recommended write off amounts, the City is not forgiving the outstanding balances but is acknowledging that payment is not expected to be received.
FISCAL IMPACT:
Decrease customer' soutstanding balances due to uncollectible debt as follows:
Utility customer accounts:
Miscellaneous customer accounts:
Total amount of uncollectible accounts:
131, 665
60, 508
192,73
CITY MANAGER' S REPORT PAGE 4
AUGUST 10, 2026 CITY COUNCIL REGULAR MEETING
UNCOLLECTIBLE UTILITY AND MISCELLANEOUS CUSTOMER ACCOUNTS ATTACHMENTS:
A. Resolution to Approve Write -Off of Uncollectible Utility and Miscellaneous Accounts for Fiscal Year ( FY) 2025/6
CITY MANAGER' S REPORT PAGE 5
AUGUST 10, 2026 CITY COUNCIL REGULAR MEETING
UNCOLLECTIBLE UTILITY AND MISCELLANEOUS CUSTOMER ACCOUNTS APPROVALS:
712 84 Z 0 ZCo
R.. pale Bulsara- Popal Date
Utility & Revenue Services Manager
Cari James
Director of ' L ance
7// ,
Date
7 / 7 0 Z O Z I,
Thomas Hedegard Date
Deputy City Manager
Salvador Navarrete
City Attorney
2- z •z.o2- 1(
Date
g•y•zco
Stephen J. Salvatore Date
City Manager
RESOLUTION NO. 26-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP TO
APPROVE THE WRITE- OFF OF UNCOLLECTIBLE UTILITY ACCOUNTS - FOR FISCAL YEAR 2025/6
WHEREAS, Generally Accepted Accounting Principles ( GAAP) and Governmental Accounting Standards Board ( GASB) require municipalities to evaluate and write- off delinquent accounts that are deemed uncollectible; and WHEREAS, as part of the annual audit process and in compliance with both GAAP and GASB requirements, the Finance Department has reviewed unpaid delinquent accounts assigned to collections; and
WHEREAS, after a thorough review, staff has determined $ 192,73 to be uncollectible for FY 2025/6 as detailed in Table 1 below; and Customer
Account Type
FY 2024/5
Approved
Write -Offs
FY 2025/6
Recommended
Write -Offs
Increase/
Decrease)
0/
No. of
Accounts to
be Written -
Off
Utility Customers
Residential and
Commercial) 110, 610 131, 665 19. 04% 296
Miscellaneous
Customers 0 60, 508 8
Totals 110, 610 192,73 304
WHEREAS, the recommended utility write- offs represent 0. 78% of the annual water and sewer charges billed to customers in FY 2025/6. The utility debt includes amounts from customers who have closed their account with the City without settling their final bills. The utility write- off amount in FY 2025/6has increased by $ 21, 055 or 19. 04%, from the prior fiscal year; and
WHEREAS, the recommended miscellaneous write- off amount of $ 60, 508 include charges rendered by City Attorney' s
Office. These charges include property
damage, labor costs, material and repairs;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lathrop approves the write- off of uncollectible accounts in the amount of $ 131, 665 in Utility Customers and $ 60, 508 in Miscellaneous Customers for Fiscal Year 2025/6.
The foregoing resolution was passed and adopted this 10th day of August, 2026, by the following vote of the City Council, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Paul Akinjo, Mayor
ATTEST: APPROVED AS TO FORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney
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