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06/05/2012 04D 1st Quarter 2012 Accounts Receivable Status Report BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT ,I Item No. `"I For Meeting of: June 5, 2012 ITEM TITLE: 1st Quarter 2012 Accounts Receivable Status Report SUBMITTED BY: Finance Department • CONTACT Cindy Epperson, Director of Finance and Budget, 575 - PERSON /TELEPHONE: 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 1 -- 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 March 31, 2012 is $926,428 which includes $744,340 for General Receivables and $182,088 for Gambling Taxes. The outstanding balance for Installment Accounts that have been billed as of March 31, 2012 is $80,848 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: City Manager STAFF RECOMMENDATION: Accept Report BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download El 1st qtr 2012 AR Report City of Yakima FINANCE DEPARTMENT STAFF REPORT May 15, 2012 SUBJECT: Accounts Receivable Status Report 1st Quarter 2012 SUBMITTED BY: Finance Department CONTACT PERSON: Cindy Epperson, Director of Finance and Budget The Accounts Receivable Status Report reports the status of Central Billing Accounts Receivables and Installment Accounts as of March 31, 2012. CENTRAL BILLING ACCOUNTS RECEIVABLE Exhibit I is a summary by category (type) of the accounts billed through Central Receivables as of /larch 31, 2012. For each category the report displays the frequency of billing, the number of :ustomers, the balance at the beginning of the reporting period, the quarterly activity of billings and payments, the ending balance, and the aged receivable balance. Each category billed has different collection requirements. For example, unpaid Sewer contracts become a lien against the real property. For categories such as traffic, miscellaneous, and parks the City uses a collection agency. This report provides information on accounts that have a large balance due; are past due by at least 120 days; have been placed with the collection agency; are being pursued through legal proceedings; or have been determined to be uncollectable. The City's collection agency classifies an account as 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, uncollectable accounts are recommended to the City Council for write -off. Once an item has been billed it takes Council action to remove it from the City's records. (Exception: write -offs of Municipal Court delinquencies are authorized by the Municipal Court Judges.) Page 1 of 6 RECURRING RECEIVABLES Downtown Yakima Business Improvement District- Annually /Quarterly (DYBID) — This assessment began in September 2008 and was renewed in 2012. It replaced the Parking &z Business 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. Annual Charges — The $5,908.75 in the collection column is for 36 accounts. Quarterly Charges — The $19,332.10 in the collection column is for 29 accounts. Fire Alarm Monitor (TAM) — We have two accounts in collection totaling $112.50 Front Street Business Improvement Assessment (FSBI) — We have six accounts in collection totaling $701.25 Fruitvale Canal Billing — There is a separate irrigation fee for customers connected directly to the Fruitvale Canal. We bill 50 accounts annually. The $275.00 in the collection column is for five accounts. Miscellaneous Billing — Recurring billings in this category include transit bus passes, refuse charges and retiree premiums for health benefits. This category also includes the truly miscellaneous one -time charges. The $7,886.88 in the collection column is for 61 accounts; 60 for refuse bin charges and one for lost video equipment. Intergovernmental — This category includes billings to other governmental agencies, including state agencies, counties, cities, school districts, and local police and fire departments. 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 is for 7 accounts which are being handled by a collection agency. This PBIA expired in April 2008 and has been replaced by the Downtown Yakima Business Improvement District. Parks and Recreation Billing — The $1,475.50 in the collection column is for 3 accounts. Section 108 Loan Fees — The $11,950.00 in the over 120 days column represents annual financial custodian fees for one loan. Police Inmate Medical Reimbursement — In May 1999, the City started billing former inmates for medical costs incurred while they were in custody. At the Municipal Court study session in January, 2001, Council determined that billing these accounts was not cost effective and directed us to stop billing them. The $448.42 in collection is for the remaining four accounts. Water / Wastewater Invoices and Connections — The $23,194.97 in collection is for 25 Water /Sewer invoices / contracts and fire hydrant meter charges, damages to Water /Sewer equipment, and utility back billings. Page 2 of 6 Gambling Tax This quarter we received $211,109.27 in gambling tax revenue. Year to date we have received $211,109 in gambling taxes which is 24.2% of the 2012 budget of $871,000. Gambling Tax Delinquencies — Exhibit II details the status of delinquent gambling tax accounts. The three delinquent accounts, 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 against the casino and officers, directors and /or managers for collection of the unpaid gambling taxes and penalties. The Gambling commission notified us in September 2008 that the business had surrendered its gambling license. In May 2009, the casino and one of the defendants filed Chapter 7 bankruptcy and their liabilities 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 City 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. For the last delinquent account, the City entered into payment arrangements with the business. The business has not lived up to the agreement. This account will be sent to collection if this situation continues. We have informed the Gambling Commission of the status of these accounts and keep them informed of any changes in their status. When a judgment is granted the Gambling Commission an revoke the company's license. INSTALLMENT ACCOUNTS SIED Loans — Yakima County administers a program for investing in economic development in Yakima County, Supporting Investment in Economic Development (SIED). The City uses this program, which offers 1/2 grant and 1 /2 loan, for infrastructure improvements and loans with the companies that benefit from the improvements. These loans have a 5 -year amortization. As of the end of the quarter all accounts were current. Exhibit III summarizes the status of the outstanding SIED loans. Local Improvement District (LID) — Exhibit IV summarizes the status of outstanding LID receivables. The delinquent amounts are unpaid installments for prior years plus fines and interest. As of the end of the quarter, the delinquent balance is $80,848.28. Page 3 of 6 EXHIBIT I ACCOUNTS RECEIVABLE (as of March 31, 2012) 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 $7,258.75 $47,000.00 $33,825.00 $20,433.75 $14,025.00 $0.00 $500.00 $5,908.75 - Quarterly (DYBID) - 300 - 21,857.37 42,838.03 33,824.12 30,871.28 11,353 42 - 185.76 19,332.10 - Fire Alarm Monitor (FAM) - 90 - 450.00 4,852.50 4,991.25 311.25 101.25 - 97.50 112.50 - Front Street Business Impr (FSBI) - 20 - 1,318.75 983.75 1,201.25 1,101.25 300.00 - 100.00 701.25 - Fruitvale Canal Billing (FC) - - 30 275.00 - - 275.00 - - - 275.00 - Miscellaneous 200 - - 102,901.34 245,874.56 262,415.34 86,360.56 8,813.37 69,392.57 267.74 7,886.88 - Intergovernmental 1 4 15 76,643.36 723,438.59 362,979.37 437,102.58 436,843.58 - 259.00 - - Traffic Eng./ Engineering 1 1 - 33,660.32 1,987 46 1,987 46 33,660.32 200.00 50.00 33,410.32 - - Parking & Bus Impr Assess (PBIA) - 1 - 110.00 85.08 - 195.08 85.08 - - 110.00 - Parks & Recreation (WEED) 10 - - 17,043.19 80.00 12,351.69 4,771.50 - - 3,296.00 1,475.50 - Section 108 Loan Fees (1) - - 1 11,950.00 - - 11,950.00 - - 11,950.00 - - Police Inmate Medical Reimb - - - 448.42 - - 448 42 - - - 448.42 - Water/WW Invoice & Connections City of Yakima 10 - 2 247,185.29 216,235.60 429,23625 34,184.64 6,275.00 1,447.04 3,267.63 23,194.97 - Terrace Heights/Union Gap 2 2 4 19,763.65 180,595.15 117,684.83' 82,673.97 82,673.97' - ' - - - Sub -total Receivables 224 418 352 540,865.44 1,463,970.72 1,260,496.56 744,339.60 546,645.67 70,889.61 53,333.95 59,445.37 - Gambling Tax ' - 20 - 182,235.86 210,961.27' 211,109.27' $182,087.86 - - 5,072.00 16,196.56 $160,819.30 Total 224 438 352 723,101.30 1,674,931.99 1,471,605.83 926,427.46 546,645.67 70,889.61 58,405.95 75,641.93 160,819.30 • INSTALLMENT ACCOUNTS Approximate Original Beginning Quarterly Activity Ending Delinquent Billings Principal Prinicpal Total Principal Interest& Total Installment Receivables M Q A Balance Balance Principal Interest Payments Balance Principal Penalties Past Due SIEDLoans /Contributions - - 4 372,500.00 179,268.45 - - - 179,268.45 - - - LID Assessments - - 175 1,773,787.00 704,141.37 - - 52,268.35 651,873.02 39,636.53 41,211.75 80,848.28 Sub -total Installment Receivables - - 179 $2,146,287.00 $883,409.82 $0.00 $0.00 $52,268.35 $831,141.47 $39,636.53 $41,211.75 $80,848.28 - - (1) Billed annually in July of each year Legend: M= ^^ Q= Qua rte rly A= Annually Pao 5 EXHIBIT II City of Yakima SUMMARY OF GAMBLING TAX DELINQUENCY (as of March 31, 2012) (A) Account(s) Sent to Collection: 410 Restaurant (1st, 2nd & 3rd Qtr 03) $3,837.36 Michael's Tavern (2nd, 3rd & 4th Qtr 08) 8,082.40 Minda Lanes (3rd & 4th Qtr2009 /lst - 4th Qtr 10) 4,276.80 Total (Including penalties) 16,196.56 (B) Account(s) Sent to Legal: Thunderbird Casino (1st, 3rd &4th Qtr07) (1) 160,819.30 Total (Including penalties) 160,819.30 (C) Account(s) With Payment Arrangements: Brews &Cues (1st -4th Qtr10) (2) 5,072.00 Total (Including penalties) 5,072.00 Total $182,087.86 (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 5of6 EXHIBIT III City o Yakima SIED LOANS SUMMARY (as of March 31, 2012) • Original Beginning Quarterly Activity Ending Delinquent Loan Principal Amount Billed (1) Principal Total Acct. k Amount Balance 1 Principal Interest Payments Balance Principal Interest Past Due Cascade Quality Molding 4594 $44,000.00 $5,255.75 $0.00 $0.00 $5,255.75 $0.00 $0.00 $0.00 $0.00 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 214,000.00 118,754.50 0.00 0.00 0.00 118,754.50 0.00 0.00 0.00 Yakima Air Terminal 5644 64,500.00 29,569.74 0.00 0.00 10,343 44 19,226.30 0:00 0.00 0.00 Total $372,500.00 $165,235.51 $0.00 $0.00 $15,599.19 $149,636.32 $0.00 $0.00 $0.00 (1) Annual loan payments due - (a) Cascade Quality Molding - June 1st; (b) Yakima Air Terminal - June 1st; (c) McAllister - December lst; (d) Yakima Air Terminal - May lst. EXHIBIT IV LID ASSESSMENT RECEIVABLES (as of March 31, 2012) - Quarterly Principal Activity - 1 Delinquent # of Beginning Ending Interest & Total LID # - Description Accts Balance Payments Balance Principal Penalties Past Due 1049 - N 1st Ave Paving Project 23 $45,261.57 1,147.86 $44,113.71 $0.00 $0.00 $0.00 1052 - Willow Area Watermain 2 570.80 0.00 570.80 570.80 558.40 1,129.20 1056 - S. 7th, 8th , & 9th Avenue Sewer 26 45,419.00 931.00 44,488.00 4,189.50 4,105.65 8,295.15 1057 - N. 84th Avenue & Hawthorne Drive Sewer 15 56,192.54 0.00 56,192.54 16,239.39 18,873.70 35,113.09 1058 - N 95th Avenue, 94th Place, W. Yakima Avenue Sewer 20 46,113.90 0.00 46,113.90 7,716.90 9,106.02 16,822.92 1060 - N. 85th Avenue & Kail Drive Sewer 17 160,951.62 0.00 160,951.62 2,593.02 2,043.00 4,636.02 1061 - Simpson Lane Sewer 71 349,631.94 50,189.49 299,442.45 8,326.92 6,524.98 14,851.90 Total 174 $704,141.37 $52,268.35 $651,873.02 $39,636.53 $41,211.75 $80,848.28 Pac 5