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UNCOLLECTIBLE ACCOUNTS RECEIVABLE
I. PURPOSE
The purpose of this policy is to establish procedures regarding the write-off of uncollectible receivables.
Il.
To ensure strong financial management practices, the proper controls over revenues are imperative in accounts receivable management and general oversight over the various revenues, including fees and developer deposits, collected. Efforts should be made to pursue the timely collection of III. POLICY
The timely identification of potential losses is an essential element in been exhausted in its collection. This policy is to ensure accurate recordings of such processes.
IV. PROCEDURES
Prior to determining whether an account should be written off, the following a. The city shal bit on a moithily basis
•. Than du date from the biling date should be at least 30 days but no more c. Accounts with an outstanding balance should be sent a letter if full d. Non-emergency services are discontinued for delinquent customers.
Customers will be reinstated when payment in full is received. Generally this will refer to developer accounts when no additional work will be e. The City shall contact the delinquent account holder at least twice in writing. The second notification shall warn the account holder that if the amount owing is not received within 30 days, the account will be turned over for collection by a collection agency.
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f. The City, may, at its discretion, offer a repayment option to the delinquent account holder.
g. The City may take the account holder to small claims court to collect the h. Customers who remit "insufficient funds" checks more than two (2) times will be required to pay in cash or money order.
i. Delinquent accounts shall be turned over to a collection agency if no payments have been received within 120 days of initial billing. j. The City shall contract with a collection agency to handle those accounts the City has not, by acting with due diligence, been able to collect. k. City Council - The Finance Director will submit to the City Manager for presentation to and approval by the City Council, a memorandum detailing the recommended write offs and a summary of the due diligence completed.
ADDITIONAL INFORMATION - The following represent criteria for writing off delinquent accounts:
a. Costs of further recovery actions will exceed estimated recovery amounts b. Inability to locate debtor
c. Forgiveness of debt as approved by Council
d. Debtor has declared a Chapter 7 bankruptcy
e. Court judgments
f. Accounts owned by companies no longer in business and for which collection efforts have failed.
g. Accounts of deceased persons
h. Other reasons on a case by case basis
i. The Finance Director has the authority to approve write offs in the amount of $50 or less.
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RESOLUTION NO. 08-1916
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MURRIETA.
CALIFORNIA ADOPTING A POLICY FOR UNCOLLECTIBLE
ACCOUNTS RECEIVABLE
WHEREAS, the City of Murrieta has the need to provide a mechanism for writing off uncollectible accounts receivable; and
WHEREAS, in order to properly address uncollectible accounts receivable, the City of Murrieta needs a policy to direct staff in the procedures; and WHEREAS, a policy has been developed to address delinquent accounts, OW, THEREFORE, BE IT RESOLVED by the City Council of Murriet alifomia, that the Policy for Uncollectible Accounts Receivable is hereb approved.
PASSED, APPROVED AND ADOPTED this 154 day of January, 2008.
Richard 7. Lifts
Richard H. Gibbs, Mayor
ATTEST:
1K 0
A. Kay Vinson, City Clerk
APPROVED AS TO FORM:
I, A. Kay Vinson, City Clerk of the City of Murrieta, California, do hereby certify under penalty of perjury that the foregoing Resolution was duly adopted at a egular meeting of the City Council on the 15 day of January 2008 by th Howing roll call vote
AYES: Bennett, Enochs, Gibbs, McAllister, Thomasian
NOES: None
ABSENT: None
ABSTAIN: None
any line.
(Seal)