AGENDA TITLE:
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Adopt a Resolution Authorizing the Acting City Manager to Execute the Write-Off of General Billing Bad Debts from Fiscal Years 2017 to 2021 and Approve the Total Write-Off Amount of $245,550 (IS - FIN)
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MEETING DATE:
November 5, 2025
PREPARED BY:
Tarra Sumner, Revenue Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution authorizing the Acting City Manager to execute the write-off of general billing bad debts and approve the total write-off amount of $245,550 recorded in fiscal year 2025.
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BACKGROUND INFORMATION:
On April 20, 2022, the City Council adopted Resolution No. 2022-100 approving the Collection and Write-Off of Uncollectable General Billing policy (“Policy”). In the Policy, the Finance Department/Revenue Division is responsible for identifying and writing off bad debt once considered uncollectible. Several departments utilize the general billing for fees, fines, and charges of services rendered. When these charges remain uncollectible, they accumulate in the General Ledger accounts and can lead to inaccurate financial reporting.
The Policy provides for the following collection processes: in-house collection, external debt collection, and write-off. Debt is collected through general billing for 45 days after due date. After 45 days have passed, the debt is referred to an outside collection agency. The external collection agency will send letters for 45 days; on the 46th day, active collections will be implemented. Using an outside collection agency may increase collection before the write-off and lessen the amount to write-off. After four years of non-payment, the debt will be cleared from the City’s financial system following the write-off process.
There will be situations where difficulty will be experienced with recovering a debt. The debt collection process can reach a point where it is inappropriate, overly expensive, or uneconomic to pursue further action. It would be more cost-effective for Council or City Manager to write off these debts in these situations rather than pursuing further action.
At the discretion of the Council or City Manager, debt will be written off in the following circumstances:
a) The debtor has left the address given and cannot be traced; or
b) The amount is too small for legal action to be taken, or is not economically viable to pursue further; or
c) The debtor is deceased, and the amount is uncollectable; or
d) The debtor has become bankrupt; or
e) Recommendation of the Revenue Division that the amount is not collectible; or
f) The debt is subject to a legal judgment or court order decision.
The total write-off for the years 2017 through 2021 is $245,550, per Attachment 1. The amount to write-off is an accumulation of bad debt from extended write-off during those years. Totals for write-offs in the future years may be less, and with the implementation of ongoing collection diligence, the write-off totals will continue to decrease.
The total write-off amount requested is calculated as of August 25, 2025, for purposes of obtaining Council approval for the Acting City Manager to execute the write off. However, the final write-off amounts may be lower due to payments received through collection efforts.
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
The current year (2025) write-off is $245,550. This amount fluctuates each year depending on bad debt accrual.
FUNDING AVAILABLE:
Not applicable.