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08/21/2012 04C Accounts Receivable Status Report - 2nd Quarter 2012 , ,..4,___,F, Y j -,, BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: August 21, 2012 ITEM TITLE: Accounts Receivable Status Report - 2nd Quarter 2012 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 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 June 30, 2012 is $817,812 which includes $636,174 for General Receivables and $181,638 for Gambling Taxes. The outstanding balance for Installment Accounts that have been billed as of June 30, 2012 is $69,395, which is for LID Assessments. Resolution Ordinance Other Report (specify) Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Phone: Source: APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Accept Report BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download ❑ 2012 2nd Quarter Accounts Recievable Status Report City of 'Yakima FINANCE DEPARTMENT STAFF REPORT August 21, 2012 SUBJECT: Accounts Receivable Status Report 2nd 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 June 30, 2012. CENTRAL BILLING ACCOUNTS RECEIVABLE Exhibit I is a summary by category (type) of the accounts billed through Central Receivables as of June 30, 2012. For each category the report displays the frequency of billing, the number of customers, the balance at the beginning of the reporting period, the quarterly 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 & ' 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 $11,158.31 in the collection column is for 74 accounts. Quarterly Charges — The $26,755.23 in the collection column is for 34 accounts. Fire Alarm Monitor (FAM) — There are two accounts in collection totaling $108.75. Front Street Business Improvement Assessment (FSBI) — A total of eleven accounts are in collection, totaling $1,001.25. Fruitvale Canal Billing — There is a separate irrigation fee for customers connected directly to the Fruitvale Canal. 50 accounts are billed 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 $7,874.38 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 seven 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 $4,763.50 in the collection column is for four accounts. 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 Finance to stop billing them. The $448.42 in collection is for the remaining four accounts. Water /Wastewater Invoices and Connections — The $24,530.06 in collection is for 26 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 the City received $223,331.01 in gambling tax revenue. Year to date the City has received $434,440 in gambling taxes which is 49.9% 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 collection. 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 can 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 $69,395.96. Page of 6 EXHIBIT I ACCOUNTS RECEIVABLE (as of June 30, 2012) CENTRAL BILLING ACCOUNTS RECEIVABLE Approximate I 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 $20,433.75 $2,200.00 $9,850 44 $12,783.31 $100.00 $0.00 $1,525.00 $11,158.31 - Quarterly (DYBID) - 300 - 30,871.28 42,368.47 33,470.93 39,768.82 12,603.14 - 410.45 26,755.23 - Fire Alarm Monitor (FAM) - 90 - 311.25 4,822.50 4,995.00 138.75 30.00 - - 108.75 - Front Street Business Impr (FSBI) - 20 - 1,10125 933.75 700.00 1,335.00 233.75 - 100.00 1,001.25 - Fruitvale Canal Billing (FC) - - 30 275.00 3,535.00 3,395.00 415.00 140.00 - - 275.00 - Miscellaneous 200 - - 86,360.56 23,619.27 25,496.62 84,483.21 6,848.52 150.00 69,610.31 7,874.38 - Intergovernmental 1 4 15 437,102.58 389,990.20 750,118.05 76,974.73 72,498.51 5,317.00 (840:78) - - Traffic Eng./ Engineering 1 1 - 33,660.32 66,149.56 99,459.88 350.00 150.00 50.00 150.00 - - Parking & Bus Impr Assess (PBIA) - 1 - 195.08 85.08 85.08 195.08 85.08 - - 110.00 - Parks & Recreation (WEED) 10 - - 4,771.50 11,831.50 4,648.32 11,954.68 7,191.18 - - - 4,763.50 - Section 108 Loan Fees (t) - - 1 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 34,184.64 493,561.72 266,003.32 261,743.04 230,943.31 3,275.09 2,994.58 24,530.06 - Terrace Heights/Union Gap 2 2 4 82,673.97 180,595.15 117,684.83 145,584.29 145,584.29 - - - - Sub - total Receivables 224 418 352 744,339.60 1,219,692.20 1,327,857.47 636,174.33 476,307.78 8,792.09 73,949.56 77,024.90 - Gambling Tax - 20 - 182,087.86 222,881.01 223,331.01 $181,637.86 - - 4,622.00 16,196.56 $160,819.30 Total 224 438 352 926,427.46 1,442,573.21 1,551,188.48 817,812.19 476,307 78 '8,792.09 78,571.56 93,221.46 160,819.30 INSTALLMENT ACCOUNTS Approximate Original Be ginnin g 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 SIED Loans/ Contributions - - 4 372,500.00 $163,669.26 64,699.02 7,285.74 71,984.76 98,970.24 - - - LID Assessments - - 175 1,773,787.00 651,873.02 n/a n/a 66,518.26 585,354.76 33,786.33 35,609.63 69,395.96 Sub -total Installment Receivables - - 179 $2,146,287.00 $815,542.28' $64,699.02 $7,285.74 $138,503.02 $684,325.00 $33,786.33 $35,609.63 $69,395.96 (1) Billed annually in July of each year Legend: M= Monthly Q= Quarterly A= Annually Page 4 of 6 EXHIBIT II City of Yakima SUMMARY OF GAMBLING TAX DELINQUENCY (as of June 30, 2012) (A) Account(s) Sent to Collection: 410 Restaurant (1st, 2nd & 3rd Qtr 03) $3,837.36 Michael's Tavern (2nd, 3rd & 4th QtrO8) 8,082.40 Minda Lanes (3rd & 4th Qtr 2009 /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) (t) 160,819.30 Total (Including penalties) 160,819.30 (C) Account(s) With Payment Arrangements: Brews & Cues (1st - 4th Qtr 10) (2) 4,622.00 Total (Including penalties) 4,622.00 Total $181,637.86 (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 riot kept. Page 5 of 6 EXHIBIT III City of Yakima SIED LOANS SUMMARY (as of June 30, 2012) • Original Beginning Quarterly Activity Ending Delinquent Loan Principal Amount Billed (I) Principal Total Acct. # Amount Balance Principal Interest Payments Balance Principal Interest Past Due McAllister Field/Italstone 5024 214,000.00 132,787.44 42,643.32 4,979.53 47,622.85 90,144.12 0.00 0.00 0.00 Yakima Air Terminal 5644 64,500.00 19,226.30 10,400.18 585.02 10,985.20 8,826.12 0.00 0.00 0.00 Fiesta Foods 6970 50,000.00 11,655.52 11,655.52 1,721.19 13,376.71 0.00 0.00 0.00 0.00 Total $328,500.00 $163,669.26 $64,699.02 $7,285.74 $71,984.76 898,970.24 $0.00 $0.00 $0.00 (1) Annual loan payments due - (a) McAllister - December 1st; (b) Yakima Air Terminal- May 1st. EXHIBIT IV LID ASSESSMENT RECEIVABLES (as of June 30, 2012) — Quarterly Principal Activity — Delinquent # of Beginning Ending Interest & Total LID # - Description Accts Balance Payments Balance Principal Penalties Past Due 1049 - N 1st Ave Paving Project 23 $44,113.71 0.00 $44,113.71 $0.00 $0.00 $0.00 1052 - Willow Area Watermain 2 570.80 0.00 570.80 570.80 558.40 1,12920 1056 - 5. 7th, 8th, & 9th Avenue Sewer 26 44,488.00 0.00 44,488.00 4,189.50 4,105.65 8,295.15 1057 - N. 84th Avenue & Haw thorne Drive Sewer 15 56,192.54 12,371.19 43,821.35 10,884.69 13,688.52 24,573.21 1058 - N. 95th Avenue, 94th Place, W Yakima Avenue Sewer 20 46,113.90 5,656.20 40,457.70 7,221.40 8,689.08 15,910.48 1060 - N. 85th Avenue & Kail Drive Sewer 17 160,951.62 43,517 40 117,434.22 2,593.02 2,043.00 4,636.02 1061 - Simpson Lane Sewer 71 299,442.45 4,973.47 294,468.98 8,326.92 6,524.98 14,851.90 Total 174 $651,873.02 $66,518.26 $585,354.76 $33,786.33 $35,609.63 $69,395.96 Page 6 of 6