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Home My WebLink About08/04/2020 06 2nd Quarter 2020 Accounts Receivable Status Report; Utility Account BalancesB US INE S S O F T HE C I T Y C O UNC I L YAK I M A, WAS HING T O N AG E ND A S TAT E M E NT I tem No. 6. F or Meeting of: August 4, 2020 I T E M T IT L E :2020 2nd Quarter Receivables S tatus Report and Update on Utility A ccount Balances S UB M IT T E D B Y:S teve Groom, Director of Finance and Budget S UM M ARY E X P L ANAT I O N: This report lists all accounts receivable balances handled through Central B illing, including Recurring Receivable and I nstallment Accounts. T he report has the following components: S taff Report E xhibit I -- A ccounts Receivable S ummary (I ncludes total amounts billed and collected during the quarter.) E xhibit I I -- Gambling Delinquency Detail E xhibit I I I -- L ocal I mprovement District (L I D) Receivables The outstanding balance of recurring receivables were billed through Central Billing as of J une 30, 2020. A separate 60-day update on Utility Billing balances is also attached. The suspension of water shutoffs due to nonpayment continues to be in effect. No further action by Council is recommended at this time. I T E M B UD G E T E D:NA S T RAT E G I C P RI O RI T Y:P ublic Trust and Accountability AP P RO V E D F O R S UB M IT TAL B Y T HE C IT Y M ANAG E R RE C O M M E ND AT I O N: Review only. S ubmitted for routine transparency and accountability purposes. AT TAC HM E NT S : Description Upload Date Type Cover Memo 7/21/2020 Cover Memo Quarterly Report 7/28/2020 Backup Material 1 UTILITY SERVICES DIVISION TO: City Council Alex Meyerhoff, Interim City Manager FROM: James Dean, Utility Services Division Manager Steve Groom, Finance Director DATE: July 21, 2020 RE: Update on Utility Account Balances. This is to provide feedback on the economic impact of the COVID-19 emergency on the City’s Utility Services Billing, since the emergency declaration in March and subsequent Governor’s Stay-At-Home Order. The concern expressed is whether increasing balances might indicate a citywide inability to pay utility bills due to the economic impact of the COVID-19 pandemic. Receivable balances, in total, decreased in June and the number of payment arrangements also decreased. Utility Services bills for Water, Waste Water, Solid Waste & Irrigation on a 60 day rotating cycle. Approximately 10,000 of our customers are served by Nob Hill Water Association and are only billed for Waste Water and or Solid Waste services. The division also prepares invoices for the Storm Water utility which are billed initially through Yakima County as part of the property taxes. As the graph at right shows, the trend in receivables for balances from April to May increased in the 31-60 day aging report with the exception of the Water utility which experienced a decrease of $23,393. In June the outstanding receivables balance for all three services decreased below the balances for April. Receivable balances in May in the 61-90 day category, with the exception of Solid Waste, increased compared to the balances in April. In June, the balances in Solid Waste increased slightly above both April and May. June Waste Water balances fell below May, but were up from April, and June Water balances were below balances for both April & May. 2 UTILITY SERVICES DIVISION The trend in Pay Arrangements is shown at right. Pay Arrangements are established for customers who will be unable to bills within the seven day grace period given past the due date of the bill. Pay arrangements are a snap shot in time and can vary depending on the day the report is generated. While there was an initial increase in the month of May over April the two subsequent months show a decline in the number of customers requesting pay arrangements. In talking to customers, we’re hearing that those who have a need are able to make arrangements. While the Pandemic is affecting them, the suspension of shut offs and making payment arrangements seems to fit their financial situation. As always, please forward customer inquiries to Utility Services Division. Customers are encouraged to call (509) 575-6080. 3 FINANCE DEPARTMENT To: Mayor and City Council Alex Meyerhoff, Interim City Manager From: Steve Groom, Finance Department Kathy Miles, Financial Services Date: July 21, 2020 Subject: Accounts Receivable Status Report - 2nd Quarter 2020 The purpose of this report is to provide transparency and accountability, to confirm budgeted revenues were billed and to present the status of receivables that are billed centrally by the Finance Department as of June 30, 2020. The COVID emergency was declared in Yakima on March 11th after which utility shutoffs ceased as a means of collection. Utility receivables are billed for two months per cycle and may increase as billings across the city are processed into the next quarter and payment plans increase. Summary •Total Utility Billing revenue for the quarter was $9.3 million. •Total Utility Billing accounts ending balance increased by $611,237 or 14.6% due to billings exceeding payments. •Total General Billing accounts ending balance decreased by $180,175 or 15.2% from prior quarter, mainly due to yearly billing activity. •Accounts in collection total $185,576, or 18.5% of total ending balance. •Total LID (Local Improvement District) accounts ending balance decreased by $3,831 or 10.1% from prior quarter. •The collections process is managed continuously and reviewed monthly •Past due accounts are placed monthly with the city’s collection agency. Note for this quarter only: The placement of items that were due to go to collection with an agency was put on hold in March. Collection Processes Collection requirements vary between types of billing. For example, the City uses a collection agency to collect significantly past due accounts in categories such as traffic, miscellaneous, and parks, whereas unpaid sewer contracts become a lien against the real property. Collection activity of delinquent LID accounts are coordinated with the City’s legal department. Collection of Utility Billing accounts involves communication with customers, following up with reminders and potentially cutting off service for non- payment. Payments can be made through automatic debit, on-line, drop-box or in person at City Hall. Accounts are sent to the City’s collection agency when the balance is more than 90 days past due. 4 GENERAL RECEIVABLES DETAIL Exhibit I Downtown Yakima Business Improvement District (DYBID) - Annually/Quarterly DYBID funds provide downtown services including cleaning, maintenance, landscaping, safety and business development activities. There are two types of billings, quarterly to all property/ business owners and annual billings to all individual businesses: Annual Charges - The $9,881 in the collection column is for 52 accounts. Quarterly Charges - The $9,115 in the collection column is for 14 accounts. Fire Inspections The Fire Department is currently doing about 500 inspections and compliance re-inspections per month; there are currently 429 accounts in collection for a total of $74,427. Front Street Business Improvement (FSBI) Assessment Originally created in 2006, this program was created for the purpose of assisting trade, economic viability and livability within the FSBI area. A total of 11 accounts are in collection, totaling $2,818. Fruitvale Canal Billing A separate irrigation fee for customers connected directly to the Fruitvale Canal, which is not owned by the City. The City buys water through shares to serve City customers. There are 50 accounts billed annually. A total of 3 accounts are in collection, totaling $131. Miscellaneous Billing Recurring billings in this category include transit bus passes for non-governmental entities, refuse charges, rents and retiree premiums for health benefits. A total of 24 accounts are in collection, totaling $10,713, primarily for Police event services and refuse bin charges. Intergovernmental This category includes billings to other governmental agencies, including state agencies, counties, cities, school districts, and local police and fire departments. Generally considered collectible, balances are normally only a result of the timing of payments. Traffic Engineering / Engineering Billing This account is generally for sidewalk safety repairs, and currently has nothing in collection. Parks and Recreation Billing This account includes billings for pool and field rentals, along with other program charges. A total of 12 accounts are in collection totaling $5,982. Airport The majority of the $3,150 the collection column is for two vendors. Most of these charges are for a delinquent lease, which is still incurring charges. The City continues to seek resolution. The $2,615 in the legal column pertains to a land lease that the cities Legal department is looking into. The Water/Wastewater Invoices and Connections A total of 22 accounts are in collection, totaling $53,641, mainly for Wastewater pretreatment and strong water fees, Water permits and Water and Wastewater equipment. 5 GAMBLING TAX DETAIL Exhibit II Gambling Tax The power to impose a Gambling Tax was adopted by ordinance in the City of Yakima in 1974. The largest part of these taxes come from card games, with Punch boards, pull tabs and amusement games making up for the rest. This quarter the City received $198,396 in gambling tax revenue, this represents 42.9% of the budgeted amount for the year ($1,053,000). Gambling Tax Delinquencies Exhibit II details the status of delinquent gambling tax accounts. The beginning and ending balances are primarily comprised of two delinquent accounts. One, totaling $15,719, has been sent to collection and the second, totaling $1,855, is making payments, coordinating with the City's Legal Department. The City informs the Gambling Commission of the status of these accounts and keeps them informed of any changes to further any collection efforts. According to RCW 9.46.070, the Gambling Commission has the authority to revoke or suspend a gambling licenses for violation of any provisions of the rules and regulations adopted in the code. LID ASSESSMENT DETAIL Exhibit III Local Improvement District (LID) LID assessments are generally for improvements made to a parcel related to the Wastewater system. There are currently six LID's that the City is collecting assessments on, improvements all done previous to 2009. Delinquent amounts are unpaid installments for prior years plus interest. At of the end of the quarter, the delinquent principal balance is $34,066. When accumulated interest ($15,507) and penalties ($19,580) are added, the total amount past due is $69,153. The City's Legal Department is involved with collection efforts. 6 RECURRING RECEIVABLES SUMMARY Exhibit I Quarterly Activity Status Beginning Payments/Ending Current to Over Over Enterprise Receivables Balance Billed Write-offs Balance 90 Days 90 Days 120 Days Collection Legal Wastewater $ 1,986,252 $ 5,098,626 $ 4,826,577 $ 2,258,301 $ 943,971 $ 63,944 $ 1,250,386 $ — $ — Water 829,051 2,091,950 1,848,321 1,072,680 596,994 22,874 452,812 — — Refuse 1,022,749 1,838,050 1,876,538 984,261 447,133 22,876 514,252 — — Irrigation 343,964 901,662 767,615 478,011 210,356 18,068 249,587 — — Total Enterprise Receivables $ 4,182,016 $ 9,930,288 $ 9,319,051 $ 4,793,253 $ 2,198,454 $ 127,762 $ 2,467,037 $ — $ — Central Billing Receivables Downtown Yak Bus Impr Dist Annual (DYBIDA)$ 32,589 $ (5,221) $ 5,382 $ 21,987 $ 200 $ — $ 11,906 $ 9,881 $ — Quarterly (DYBID) 35,390 37,722 47,556 25,556 5,071 — 11,369 9,115 — Fire Inspections 108,537 3,815 14,534 97,818 2,435 1,595 19,361 74,427 — Front Street Business Impr (FSBI) 5,530 1,234 1,260 5,504 818 — 1,869 2,818 — Fruitvale Canal Billing (FC) 350 2,985 2,319 1,016 810 — 75 131 — Miscellaneous 27,113 246,236 243,112 30,237 14,540 1,029 3,955 10,713 — Intergovernmental 488,087 716,989 727,450 477,626 468,552 7,997 1,078 — — Traffic Eng./ Engineering 1,470 — — 1,470 — — 1,470 — — Parks & Recreation (WEED) 6,299 — — 6,299 — — 317 5,982 — Airport 68,162 174,307 180,628 61,841 44,819 4,177 7,080 3,150 2,615 Gambling 17,574 198,396 198,396 17,574 — — — 15,719 1,855 Water/WW Invoice & Connections City of Yakima 288,050 337,876 475,712 150,214 74,582 — 21,992 53,641 — Terrace Heights/Union Gap 106,607 319,098 317,265 108,440 108,440 — — — — Total Central Billing Receivables $ 1,185,758 $ 2,033,437 $ 2,213,614 $ 1,005,582 $ 720,267 $ 14,798 $ 80,472 $ 185,577 $ 4,470 Original Beginning Quarterly Activity Ending Delinquent Principal Principal Total Principal Interest &Total Installment Receivables Balance Balance Principal Interest Payments Balance Principal Penalties Past Due LID Assessments $ 1,773,787 $ 37,898 $ 3,831 $ — $ 3,831 $ 34,067 $ 34,066 $ 35,087 $ 69,153 7 GAMBLING TAX DETAIL Exhibit II 2nd Quarter Account(s) sent to Collection:Balance Michael's Tavern (1st - 4th Qtr 13)$ 11,938 Michael's Tavern (1st - 2nd Qtr 14) 3,781 15,719 Account(s) with payment arrangements set up by Legal: Brews & Cues (1st - 4th Qtr 14) 1,855 Total $ 17,574 LID ASSESSMENT DETAIL Exhibit III Quarterly Activity Delinquent # of Beginning Ending Total LID # - Description Accts Balance Payments Balance Principal Interest Penalties Past Due 1052 - Willow Area Water Main 1 $ 286 — $ 286 $ 285 $ 390 $ 489 $ 1,164 1057 - N. 84th Avenue & Hawthorne Drive Sewer 1 2,220 — 2,220 2,221 1,943 2,579 6,743 1058 - N. 95th Avenue, 94th Place, W. Yakima Avenue Sewer 1 4,116 — 4,116 4,116 4,327 6,188 14,631 1060 - N. 85th Avenue & Kail Drive Sewer 4 5,185 2,592 2,593 2,592 136 — 2,728 1061 - Simpson Lane Sewer 13 26,091 1,239 24,852 24,852 8,711 10,324 43,887 Total 20 $ 37,898 $ 3,831 $ 34,067 $ 34,066 $ 15,507 $ 19,580 $ 69,153 8