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
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.
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.
1. Accept the information as presented; Or
2. Such alternative action as the Commission may deem appropriate
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.
Prepared by: Gladys Johnson
Attachments: Yes____ No _x__
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________