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03/06/2012 04D Accounts Receivable Status Report - 4th Quarter 2011 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 4.D- For Meeting of: March 6, 2012 . ITEM TITLE: Accounts Receivable Status Report - 4th Quarter 2011 SUBMITTED BY: Finance Department CONTACT Cindy Epperson, Acting Director of Finance and PERSON/TELEPHONE: Budget 575 - 6070 SUMMARY EXPLANATION: This report lists all accounts receivable balances handled through Central Billing, including Recurring Receivable and Installment Accounts. The report has the following components: -Staff Report Exhibit I -- Accounts Receivable Summary (Includes total amounts billed and collected during the quarter.) Exhibit II -- Gambling Delinquency Detail •Exhibit III -- SIED Loans Summary Exhibit IV - Local Improvement District (LID) Receivables The outstanding balance of recurring receivables billed through Central Billing as of December 31, 2011 is $723,101 which includes $540,865 for General Receivables and $182,236 for Gambling Taxes. The outstanding balance for Installment Accounts that have been billed as of December 31, 2011 is $108,361, which includes $16,462 for SIED Loans and $91,898 for LID Assessments. Resolution Ordinance Other Report (specify) Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Source: Phone: APPROVED FOR SUBMITTAL: 7174: a/ 17/ City Manager STAFF RECOMMENDATION: Accept Report BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download ❑ Accounts Receivable Report - 4th Quarter 2011 0 City of Yakima FINANCE DEPARTMENT STAFF REPORT February 28, 2012 SUBJECT: Accounts Receivable Status Report 4th Quarter 2011 SUBMITTED BY: Finance Department CONTACT PERSON: Cindy Epperson, Acting Director of Finance and Budget This report reflects the status of Central Billing Accounts Receivables and Installment Accounts at December 31, 2011. CENTRAL BILLING ACCOUNTS RECEIVABLE A summary of each category (type) of account billed through Central Receivables, by frequency of billing, the number of customers, the balance at the beginning of the reporting period, the quarterly activity of billings and payments and the aged receivable balance in each category as of December 31, 2012, is displayed in Exhibit I. Each category billed has different collection requirements. For example, unpaid Sewer contracts become a lien against the real property. Other billing categories, however, such as traffic, miscellaneous, and parks billings, do not become a lien, and City must use a collection agency or other collection action. In this report a narrative is provided for the accounts that include information regarding those accounts that are notable in size, aged at least 120 days, have been placed with the collection agency, are currently being pursued through legal proceedings, or are determined by the City's collection agency to be uncollectable. The City's collection agency determines that an account is uncollectable when the account is beyond the statute of limitations for collection, the agency cannot locate the party, or the customer has been declared bankrupt. At year end, if an account has been deemed uncollectable, the account is recommended for write -off to City Council. Once an item has been billed it takes Council action to remove it from our records. (Exception: write - offs of Municipal Court delinquencies are authorized by the Municipal Court Judges.) The write - offs approved by Council in December 2011 have been removed from the balances in this report. RECURRING RECEIVABLES Downtown Yakima Business Improvement District- Annually /Quarterly (DYBID) — This is an assessment that became effective September 2008, and replaced the prior Parking & Business Page 1 of 6 Improvement Area (PBIA). There are two types of billings; quarterly to all property / business owners and annual billings to all individual businesses located in this area. The first annual charge was billed on 1/29/09. This assessment expired in August, 2011; therefore, the third quarter billing was the final billing for this district. Annual Charges - The $5,508.75 in the "Collection" column represents 35 accounts. Quarterly Charges — The $16,760.64 in the "Collection" column represents 35 accounts. Fire Alarm Monitor (FAM) — The $75.00 in the "Collection" column represents one account. Front Street Business Improvement Assessment (FSBI) — The $601.25 in the "Collection" column represents 6 accounts. Fruitvale Canal Billing — There is a separate irrigation fee for customers connected directly to the Fruitvale Canal, which involves billing 50 accounts annually. The $275.00 in the "Collection" column represents 5 accounts. Miscellaneous Billing — The billings under this category are mainly for transit bus passes and refuse charges. The $7,735.70 in the "Collection" column represents 61 accounts; 60 for refuse bin charges and one for lost video equipment. Intergovernmental — This category includes billings to other governmental agencies, such as the Yakima Air Terminal, Yakima County and local police and fire departments. As of the end of the quarter, there are no accounts in collection. All balances over 90 days old were paid in January. Traffic Engineering / Engineering Billing — This account is generally for sidewalk safety repairs, and currently has nothing in collection. Parking and Business Improvement Assessment (PBIA) — The $110.00 in the "Collection" column represents 7 accounts which are being pursued by a collection agency on behalf of the City. This PBIA expired in April 2008 and has been replaced by the Downtown Yakima Business Improvement District. Parks and Recreation Billing — The $1,616.50 in the "Collection" column represents 4 accounts. Section 108 Loan Fees — The $11,950.00 in the "Over 120 Days" column represents annual financial custodian fees. Police Innate Medical Reimbursement — In May 1999, the City started billing former inmates for medical costs incurred while in custody. At the Municipal Court study session in January, 2001, Council determined that performing this billing was not cost effective, and directed that this billing process be stopped. The 4 remaining accounts which have not yet met the write -off - criteria have a balance of $448.42 and are currently in collection. Water / Wastewater Invoices and Connections — The $22,000.83 in the "Collection" column is for 25 Water /Sewer invoices / contracts and fire hydrant meter charges, damages and utility back billings sent to collection agency for follow up. Page 2 of 6 Gambling Tax During this quarter, $190,947.43 in gambling tax payments has been received. Year to date gambling taxes collected are $847,764 or 97.6% of the 2011 budget of $869,000. Gambling Tax Delinquencies — Exhibit II details the status of delinquent gambling tax accounts. The delinquent accounts of 3 gambling establishments, totaling $16,196.56, have been sent to collections. A fourth account owes the City $160,819.30 in past due gambling taxes and penalties. In July 2008, the City filed a Complaint in Yakima County Superior Court for collection of the unpaid gambling taxes and penalties against the casino and officers, directors and /or managers. Per an e -mail notice from the Gambling commission in September 2008, the business surrendered its gambling license. In May 2009, the casino and one of the individuals filed Chapter 7 bankruptcy and subsequently were discharged by the bankruptcy court. On January 29, 2010 a default judgment was obtained against one of the defendants for this outstanding balance plus expenses. In early 2012, the attorney handling this case recommended that the City write off this debt due to the inability to collect the debt. Consequently, it will be written off at the end of the year. The last account had entered into payment arrangements with the City, which were not met, and is in the process of being sent to collection. The Gambling Commission is aware of these delinquencies and is routinely informed of any status changes. As soon as a judgment is granted on any establishment, the Gambling Commission can revoke a license. INSTALLMENT ACCOUNTS SIED Loans — Yakima County administers a program entitled Supporting Investment in Economic Development (SIED). The City uses this program, which offers i/z grant and 1/2 loan, for infrastructure improvements and enters into loan agreements with the companies that benefit from the improvements, with a 5 -year amortization. As of the end of the quarter, the balance due was $16,462.37. Exhibit III summarizes the status of the outstanding SIED loans. Local Improvement District (LID) — LID balances are installment accounts (usually with a 10- year amortization schedule) that have annual payments. Exhibit IV summarizes the status of outstanding LID receivables. The delinquent amounts are unpaid installments for prior years. The principal amounts include both the unbilled portion of the liability and any balance currently billed but not past due. As of the end of the quarter, the delinquent balance, which includes fines and penalties, is $91,898.43. Of the total past due, $18,975 is from ten accounts that are past due for three to five years. An LID represents a lien against the property and State law requires foreclosure after 3 years assessments are past due. The Finance Department is attempting to collect these delinquent accounts in an attempt to minimize possible foreclosures in the future. Legal is notified of any delinquency that is over 2 years in arrears. Page 3 of 6 EXHIBIT I ACCOUNTS RECEIVABLE. (as of December 31, 2011) CENTRAL BILLING ACCOUNTS RECEIVABLE Approximate Quarterly Activity Status Billings Beginning New Invoices Ending Current to Over Over To To Recurring Receivables M Q A Balance Billed Payments Balance 90 Days 90 Days 120 Days Collection Legal Downtown Yak Bus Impr Dist Annual (DYBIDA) - - 300 $8,400.00 $0.00 $1,141.25 $7,258.75 $0.00 $0.00 $1,750.00 $5,508.75 - Quarterly (DYBID) - 300 - 22,883.60 - 1,026.23 21,857.37 - - 5,096.73 16,760.64 - Fire Alarm Monitor (FAM) - 90 - 487.50 4,852.50 4,890.00 450.00 277.50 - 97.50 75.00 - Front Street Business Impr (FSBI) - 20 - 1,557.03 - 238.28 1,318.75 - - 717.50 601.25 - Fruitvale Canal Billing (FC) - 30 275.00 - - - 275.00 - - - 275.00 - Miscellaneous 200 - - 51,010.18 185,752.77 133,861.61 102,901.34 94,151.73 - 1,013.91 7,735.70 - Intergovernmental 1 4 15 662,740.67 94,376.83 680,474.14 76,643.36 20,244.87 23,391.00 33,007.49 - - Traffic Eng./ Engineering 1 1 - 200.00 128,755.82 95,295.50 33,660.32 33,510.32 - 150.00 - - Parking & Bus Impr Assess (PBIA) - 1 - 110.00 85.08 85.08 110.00 - - - 110.00 - Parks & Recreation (WEED) 10 - - 7,919.36 12,124.61 3,000.78 17,043.19 10,436.69 3,288.00 1,702.00 1,616.50 - Section 108 Loan Fees t - - 1 11,950.00 - - 11,950.00 - - 11,950.00 - - Police Inmate Medical Reimb - - - 448.42 - - 448.42 - - - 448.42 - W ater/W W Invoke & Connections City of Yakima 10 - 2 81,582.17 793,611.72 628,008.60 247,185.29 174,404.44 - 50,780.02 22,000.83 - Terrace Heights/Union Gap 2 2 4 49,334.03 232,582.45 262,152.83 19,763.65 19,763.65 - - - - Sub - total Receivables 224 418 352 898,897.96 1,452,141.78 1,810,174.30 540,865.44 352,789.20 26,679.00 106,265.15 55,132.09 - Gambling Tax - 20 - 182,235.86 190,94743 190,94743 $182,235.86 - - 5,220.00 16,196.56 $160,819.30 Total 224 438 352 1,081,133.82 1,643,089.21 2,001,121.73 723,101.30 352,789.20 r 26,679.00 111,485.15 71,328.65 160,819.30 INSTALLMENT ACCOUNTS Approximate Original Beginning Quarterly Activity Ending Delinquent Billings Principal Prinicpal Total Principal Interest& Total Long -term Receivables M Q A Balance Balance Principal Interest Payments Balance Principal Penalties Past Due SIED Loans/ Contributions - - 4 372,500.00 260,481.01 81,212.56 14,032.94 95,245.50 179,268.45 15,59919 86318 16,462.37 LID Assessments - - 175 1,773,787.00 738,022.97 - 33,881.60 704,141.37 46,048.98 45,849 45 91,898.43 Sub-total Long-term Receivables - - 179 $2,146,287.00 $998,503.98 $81,212.56 $14,032.94 $129,127.10 $883,409.82 $61,648.17 846,712.63 $108,360.80 (1) Billed annually in July of each year Legend: M= Monthly Q = Qua rterly A= Annually Page 4 of 6 EXHIBIT II City of Yakima SUMMARY OF GAMBLING TAX DELINQUENCY (as of December 31, 2011) (A) Account(s) Sent to Collection: 410 Restaurant (1st, 2nd & 3rd Qtr03) $3,837.36 Michael's Tavern (2nd, 3rd & 4th Qtr 08) 8,082.40 Minda Lanes (3rd & 4th Qtr2009 /1st - 4th Qtr 10) 4,276.80 Total (Including penalties) 16,196.56 (B) Account(s) Sent to Legal: Thunderbird Casino (lst, 3rd & 4th Qtr 07) (1) 160,819.30 Total (Including penalties) 160,819.30 (C) Account(s) With Payment Arrangements: Brews & Cues (1st - 4th Qtr10) (2) 5,220.00 Total (Including penalties) 5,220.00 Total $182,235.86 (1) Refer to gambling tax narrative on page 3 of this report for further information on this account. (2) Collection letter to be sent - arrangements not kept. Page 5 of 6 EXHIBIT III City of Yakima SIED LOANS SUMMARY (as of December 31, 2011) Original Beginning Quarterly Activity Ending Delinquent Loan Principal Amount Billed (I) Principal Total Acct. # Amount Balance Principal Interest Payments Balance Principal Interest Past Due Cascade Quality Molding 4594 $44,000.00 $5,255.75 $0.00 $0.00 $0.00 $5,255.75 $5,255.75 $220.74 $5,476.49 Fiesta Foods 6970 50,000.00 11,655.52 0.00 0.00 0.00 $11,655.52 0.00 0.00 0.00 McAllister Field/Italstone 5024 214,000.00 214,000.00 81,212.56 14,032.94 95,245.50 $132,78744 0.00 0.00 0.00 Yakima Air Terminal 5644 64,500.00 29,569.74 0.00 0.00 0.00 $29,569.74 10,343.44 642.44 10,985.88 Total $372,500.00 $260,481.01 $81,212.56 $14,032.94 $95,245.50 $179,268.45 $15,599 19 $863.18 $16,462.37 (1) Annual loan payments due - (a) Cascade Quality Molding - June 1st; (b) Yakima Air Terminal June 1st; (c) McAllister - December 1st; (d) Yakima Air Terminal - May lst. EXHIBIT IV LID ASSESSMENT RECEIVABLES (as of December 31, 2011) Quarterly Activity Delinquent # of Assessment Beginning Ending Interest& Total LID 4 - Description Accts Balance Balance Payments Balance Principal Penalties Past Due ' 1049 - N 1st Ave Paving Project 23 $61,473.07 $61,473.07 16,211.50 $45,261.57 $573.93 $100.56 $674.49 1052 - Willow Area Watermain 2 570.80 570.80 0.00 570.80 570.80 558.40 1,129.20 1056 - S. 7th, 8th , & 9th Avenue Sewer 26 61,895.00 55,144.50 9,725.50 45,419.00 4,655.00 4,448.16 9,103.16 1057 - N. 84th Avenue & Hawthorne Drive Sewer 15 58,437 44 56,192.54 0.00 56,192.54 16,259.39 18,873.70 35,133.09 1058 - N 95th Avenue, 94th Place, W Yakima Avenue Sewer 20 53,803.70 48,74850 2,634.60 46,113.90 7,716.90 9,106.02 16,822.92 1060 - N. 85th Avenue & Kail Drive Sewer 17 201,882.56 160,951.62 0.00 160,951.62 2,593.02 2,043.00 4,636.02 1061 - Simpson Lane Sewer 71 385,390.70 354,941.94 5,310.00 349,631.94 13,679.94 10,719.61 24,399.55 Total 174 $823,453.27 $738,022.97 $33,881.60 $704,141.37 $46,048.98 $45,849.45 $91,898.43 Page 6 of 6