| | | | | | | | Agenda Item - 3.e.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Patricia Song
| | Dept.: | City Manager
| Dept.: | Finance
| | Subject: | Approval of writing off certain delinquent receivables as uncollectible debt owed to the City. (Amount: $29,217.40) (Action Item) | Date: | 3/22/2022 |
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| | | | | | | | OBJECTIVE
To request that the City Council approve to write off certain delinquent obligations owed to the City in the amount in excess of $10,000 as uncollectible debt. |
| | | | | | | | BACKGROUND
The City's Finance Department maintains a billing system that maintains all amounts owed to the City (Accounts Receivable). Occasionally, the responsible party does not pay. Resolution 9666-20 provides authority to the Finance Director to use available lawful methods to obtain prompt and full recovery of all amounts owed to the City, and outlines how uncollectable debt may be written off. Delinquent obligations owed to the City in excess of $10,000 may be written off as uncollectible debt with the approval by the City Council. |
| | | | | | | | DISCUSSION
In June 2020, a traffic accident occurred at the intersection of Trask Avenue and Gilbert Street in the City of Garden Grove. A police vehicle was totaled. The damage was estimated to be $34,217.40. The City created a receivable on the party at fault in the same amount. No payment has been made as of today. The insurance company of the party at fault offered the City $5,000, the policy limit on property damage. After a thorough investigation and good faith effort to collect the full amount, the City’s subrogation administrator recommended the City accept the $5,000 as payment in full, and write off the remaining balance of $29,217.40 as uncollectible debt. Writing off the uncollectible amount will allow the City to receive the $5,000 from the insurance company. |
| | | | | | | | FINANCIAL IMPACT
The write-off will result in a reduction of previously recognized damage recovery revenue in the amount of $29,217.40. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
- Approve the write-off of $29,217.40 as uncollectible debt.
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