AGENDA MEMORANDUM

 

 

Meeting Date:           October 11, 2010

 

From:                          Jerry Boop, Finance Director, CPA, CGFO

 

Subject:                      Accounts Receivable Write Offs

 

 

Staff Recommendation:

No action is required.  This memo serves as formal notification to the City Commission pursuant to internal policy.  This has no impact on the operating (income) statement.  It simply reclassifies a portion of the accounts receivable on the balance sheet as uncollectible.

 

Analysis:

Internal policy requires that the Finance Director annually write off, at the end of each fiscal year, the previous year’s amount of accounts receivable determined to be uncollectible.  Uncollectible is defined as an account that is unpaid 120 days after the customer’s service has been terminated.  This policy does not prevent the City of Leesburg, from maintaining records on terminated accounts and subsequently collecting these amounts, should the customer attempt to renew service with the City.  Furthermore, when an account is written off pursuant to this policy, it has no impact on any pending or yet to be initiated collection efforts.  It has been the longstanding policy of the City that accounts are not written off until they remain in “C” (collection agency status) for one year.

 

At the end of the previous fiscal year the City reported a total of 1,658 past due utility accounts which were comprised of 58 commercial and 1,600 residential accounts totaling $681,622.  The diligence of the collections and customer service staff has reduced the total amount written off by $82,835 to 598,787.  In addition the City has recognized $15,274 in miscellaneous receivables as uncollectable bringing the total amount written off to 614,061.  Following is a summary of amounts written off by fund:

 

 

 

 

 

 

 

 

 

 

 

 

Write off detail for FY2009:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

 

 

Amount

 

Balance as of

 

Percentage

Fund

 

Written off

 

August 31, 2010

 

Written off

General

 

19,953.14

 

388,683.17

 

5.15

Carver CRA

0.00

84.58

0.00

Stormwater

 

11,094.32

 

113,241.54

 

9.80

Electric

 

423,080.79

 

6,314,242.44

 

6.70

Gas

 

28,037.34

 

273,977.58

 

10.23

Water

 

43,497.59

 

449,626.37

 

9.67

Wastewater

 

57,893.31

 

542,066.29

 

10.68

Communications

 

30.21

 

37,822.61

 

0.08

Solid Waste

 

30,474.54

 

282,476.4

 

10.79

Health Ins. Fund

 

0.00

 

256.28

 

0.00

0.00

1,923.20

0.00

TOTAL

 

614,061.24

 

8,403,400.46

 

7.31

  

 

Fiscal Impact

 

The City annually appropriates funds for bad debt expense based on the prior year’s collection history.  Accordingly, the amount budgeted and expensed to bad debt is based on estimates.

 

 

Options:

1.  No Action.

2.  Such alternative action as the Commission may deem appropriate

 

Fiscal Impact

None

 

Submission Date and Time:    10/8/2010 5:19 PM____

 

Department: _Finance_____________

Prepared by:  _Jerry Boop____________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head __JB____

 

Finance  Dept. _____JB___________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________