HomeMy WebLinkAbout1984-10-02; City Council; 7885; Authorization to Remove Bad Debts from City BooksCl w > 0 er: a. a.
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RECOMMENDED ACTION:
AUTHORIZATION TO REMOVE BAD DEBTS
FROM CITY BOOKS
DEPT. HD.--r-t-:=-rl·-
CITY ATTY _ _,,__
Adopt Resolution No. 71.S:-?.. authorizing the Finance Director to remove certain
bad debts from the City books.
ITEM EXPLANATION
From time to time, the City is forced to write off debts for utility or other
services which have become uncollectable through the normal course of business.
Every business experiences some losses and, although the staff makes every
effort to prevent these losses, these become a normal cost of doing business.
Before accounts are written off, the staff must make every effort to loc1cte the
responsible party and collect the amounts that are due. In the case of utility
services (ie. water, sewer or trash) the City can control the amount of the bad
debt by discontinuing service to the occupant as soon as the debt becomes
delinquent. After a debt is recognized as uncollectable, the Ci½Y has the
option of continuing to attempt collection or to turn accounts over to a
collection agency, or the use of small claims court actions. The City uses
collection agencies in certain cases such as damage to City property or
paramedic services and uses small claims court in the case of business licenses
or other taxes due the City.
This request to remove bad debts from the City books relates to $18,656.a □ of
utility accounts ($8,830.31 in City related customers and $9,826.49 received in
the assumption of Costa Real customers.) The $8,830.31 in bills from customers
which have historically been City customers represents three years accumulation
of bad debts and a loss rate of about 0.07%. This is a threefold improvement
over the previous bad debt write offs which equated to a loss rate of about
0. 22~6.
FISCAL IMPACT
The write off of the tot.al <li18,656.80 will reduce total revenue recorded for the
water and sanitation enterprises for 1984 and will reduce the emount that Coast
Waste Management will receive for refuse collection payments. The Finance staff
will determine hnat portion of the proposed write off will be charged against
which fund. The net impact on any of these funds will be minimal. Also, the
City will continue collection on ·these accounts where possible so some recovery
may still be made.
EXHIBITS
Resolution No, 7,ZS::J... , authorizing the Finance Director to remove certain
bad debts from the City Books of Account.
List of bad debts to be written off (on file in Finance Department).
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l RESOLUTION NO. 7752
"" NI A RESOLUTION CF THE CITY COUNCIL CF fHE CITY CF
CARLSF_l~D AUJHORIZ!t-n THE rINANCE 0DIRECiOR TO· wRITE
OFF CERTAIN BAD DEBTS FROM.THE CITY BOOKS OF ACCOUNT. 3
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WHEREAS, from time to time the City experiences bad debt losses which occur
in the normal course of business; and
WHEREAS, the City has not authorized the removal of such bad debts for
approximately three years; and
WHEREAS, the City staff has made a!l reasonable attempts to collect these
debts prior to this action; and
WHEREAS, the Finance Director will continue to persue the collection of
these debts in whatever way possible.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the C~ty of Carlsbad
that the debts shown on the attached list are hereby removed from the City Book$
of Accounts and shall be considered uncollectable for accounting purposes.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of
the City of Carlsbad on the 2nd day of Octoter
following vote, to wit:
AYES: Council .[{eroers c.asler, Lewis, Chick and Prescott
NOES: N::me
ABSf".NT: Council M9rnber Kulch.in
ATTEST:
Al~~~
(SEAL)
, 1984, by the