Item No: 6A

Meeting Date: November 13, 2012

From: William Spinelli, CPA, Finance Director

By Gladys Johnson, Deputy Finance Director

Subject: Year End Write offs Fiscal Year 2010-2011

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 1,146 past due utility accounts which were comprised of 55 commercial and 1,091 residential accounts totaling $380,227. The revised deposit policy, implementation of FACTA and the combined diligence of the collections and customer service staff has reduced the total amount written off by $16,450.07 to $363,776.93 over the fiscal year. In addition, the City has recognized $12,081.98 in miscellaneous receivables as uncollectable bringing the total amount written off to $375,858.91.

Options:

1. Accept the information as presented; Or

2. Such alternative action as the Commission may deem appropriate

Fiscal Impact:

The fiscal impact for these amounts has been recorded as bad debt expense in the City’s financial statements as a normal course of business throughout the fiscal year.

Submission Date and Time: 11/8/2012 4:25 PM____

Department: _Finance/Accounting__ Prepared by: Gladys Johnson Attachments: Yes____ No _x__ Advertised: ____Not Required ______ Dates: __________________________ Attorney Review : Yes___ No ____ _________________________________ Revised 6/10/04

Reviewed by: Dept. Head ________ Finance Dept. __________________ Deputy C.M. ___________________ Submitted by: City Manager ___________________

Account No. _________________ Project No. ___________________ WF No. ______________________ Budget ______________________ Available _____________________