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CC Resolution 2019-014 Write Off & Unclaimed Property Policy RESOLUTION NO. 2019 - 014 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, ADOPTING AN ACCOUNTS RECEIVABLE WRITE-OFF AND UNCLAIMED PROPERTY POLICY WHEREAS, the City Council desires to adopt a Policy establishing guidelines for the escheatment of unclaimed money, including unclaimed checks, from the City, consistent with the provisions of Government Code Sections 50050 through 50057; and WHEREAS, guidelines are established to pursue the collection of all receivables, establish an escheatment process for unclaimed property, and write-off accounts determined to be uncollectible; and WHEREAS, financial policies provide transparency and consistency; and WHEREAS, accounts receivables write-off and unclaimed property policies enable the Finance Department and the City Manager to maintain a system of financial controls for the efficient collection and financial reporting of public funds; and WHEREAS, the ability to collect, escheat unclaimed property, or write- off uncollectible receivables is an act that is taken solely for the common benefit of the City and its citizenry. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Quinta, California, as follows: SECTION 1. The Accounts Receivable Write-Off and Unclaimed Property Policy attached hereto as Exhibit A and incorporated herein by reference shall govern the collection and write-off of the City’s receivables in a manner that is for the common benefit, whether it be through collection, transfer, or write-off. SECTION 2. This Policy, as applicable, shall constitute the procedures and rules governing the collection of all the City’s revenue pursuant to Chapter 3.10 of the La Quinta Municipal Code. SECTION 3. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the Resolution No. 2019-014 Write Off and Unclaimed Property Policy Adopted: May 21, 2019 Page 3 of 8 EXHIBIT A Accounts Receivables Write-Off and Unclaimed Property Policy I. Purpose. It is the City of La Quinta’s (City’s) policy to prevent the creation of accounts receivables by requiring payment at the time of or before services are rendered. In some cases, however, an accounts receivable account may be established and may become delinquent. It is the City’s policy to actively pursue collection of all receivables, regularly review the status of past-due accounts, and write-off accounts determined to be uncollectable. This policy is to ensure all reasonable due diligence has been used to collect accounts receivable, improve measurement of the City’s accounts receivables, and ensure the most efficient use of City revenue collection resources. The policy establishes guidelines for the escheatment of unclaimed money, including unclaimed checks, from the City, consistent with the provisions of Government Code Sections 50050 through 50057. This policy also ensures year-end financial statements reflect actual collectible accounts. II. Scope. This policy applies to all City departments and Funds. Types of receivables covered by this policy include, but are not limited to, business licenses, permits, transient occupancy tax, fees for services, mitigation fees, reimbursements, recovery of damage to City property, fines, fees, penalties, false alarms, and legal judgements. Unclaimed property includes, but is not limited to, uncashed checks and overpayments. III. Accounts Receivables and Write-Off Procedures. A. Accounts Receivable Processing Resolution No. 2019-014 Write Off and Unclaimed Property Policy Adopted: May 21, 2019 Page 4 of 8 Terms of payment for all debts to the City shall be net 30 from the invoice date, unless otherwise provided in a contract. Because normal City business is conducted Monday through Friday, due dates that occur on a Saturday or Sunday shall be advanced to the following Monday. Due dates that occur on a City observed holiday shall be advanced to the next business day. B. Written Disputes of Debts If a customer submits a written dispute of the debt, the originating department will have thirty (30) days to evaluate the validity of the dispute and reach a decision. The collection process will be put on hold until completion of the appeal process. A response letter shall be sent to the customer notifying them of the decision. If an appeal is upheld, a new invoice summarizing the amount due will be issued. C. Late Fees and Interest Charges Late fees and interest charges may begin accruing on all eligible accounts receivables not paid within 10 days after the invoice due date. In accordance with Government Code section 16583.1, the City may impose a reasonable fee, not to exceed the actual costs, to recover the collection costs on a past due account. For purposes of this paragraph, eligible accounts are defined as those adopted by resolution with a City fee study. The City shall routinely notify customers when payment is due. To facilitate recovery of the principal balance the elimination of penalties, interest, and/or any other fee(s) that has been applied to an accounts receivable item due to delinquency may be written-off in accordance with the approval authorities in Section G of this policy. D. Payment Plans Payment plans may be granted by City staff with the approval of a direct Manager or Supervisor and the Finance Director or their designee. Payment arrangements may be approved under the following conditions:  All debt due must be paid within 24 months.  A promissory note with a payment schedule must be signed with an agreement including a provision that calls for full payment if the note is defaulted upon. Resolution No. 2019-014 Write Off and Unclaimed Property Policy Adopted: May 21, 2019 Page 5 of 8 A write-off from the City’s accounting records does not constitute forgiveness of the debt or gift of public funds. Subsequent collection of an account previously written off will be treated as miscellaneous revenue in the appropriate Fund. E. Collection Agency Only delinquent accounts over 365 days past due and $100.00 or more may be considered for collections. Accounts transferred to a collection account would be considered written off. If a payment is received from the collection agency it will be deposited as miscellaneous revenue in the appropriate Fund. F. Designation of an Account as Uncollectible An account will be considered uncollectible if it meets one or more of the following criteria:  The City’s collection procedures have been followed and the account remains unpaid for greater than 365 days after the due date shown on the original invoice;  The debtor cannot be located, nor any of the debtor’s assets in the event the assets could be seized, claimed or otherwise used to satisfy debt obligations;  The debtor has no reasonably available assets that may be used for payment of the debt, and there is no reasonable expectation they will have any in the reasonably foreseeable future;  The debt is disputed, and the City has insufficient documentation to pursue collection efforts;  The debtor has died and there is no known estate or guarantor;  The debtor is a company which is no longer in business;  The debt is discharged through legal action (bankruptcy or court judgement). G. Approval Authority for Write-Offs The Finance Department will periodically (but not less than bi- annually) review all accounts receivables. Write-off requests shall include all necessary due diligence documentation. Once Finance staff has prepared the write-off request(s), the qualified accounts will be presented to the Senior Accountant or their designee for Resolution No. 2019-014 Write Off and Unclaimed Property Policy Adopted: May 21, 2019 Page 6 of 8 review and subsequently obtain the corresponding approval(s) based on the following authority levels: IV. Under and Overpayments. All under and overpayments shall be reported to the City Council prior to becoming the official custody of the City. A. Underpayments Underpayments of less than $5.00 may be waived at the discretion of the City upon approval of the Finance Director; unless the under collected fee constitutes a third-party liability or pass through payment, which must be collected and remitted in full. B. Overpayments In accordance with Government Code Section 50053, individual items of less than $15.00, or any amount if the depositor’s name is unknown, that remain unclaimed in the official custody of the City for the period of one year or upon an order of the court may be transferred to the General Fund by the City Council without the necessity of publication in a newspaper. A formal request for refund may be made within one year by the payee. V. Escheatment of Unclaimed Money Procedures. Escheatment is the process of identifying customer deposits or unclaimed checks that are considered abandoned. A. Public Notice Money that is not the property of the City that remains unclaimed for a period of more than three (3) years shall become the property of the City forty-five (45) days after publication once a week for two successive weeks in a newspaper of general Write-Off Approver(s) Approval Limit (cumulative per fiscal year Finance Director Up to $15,000 City Manager Up to $50,000 City Council Over $50,000 Resolution No. 2019-014 Write Off and Unclaimed Property Policy Adopted: May 21, 2019 Page 7 of 8 circulation published in the local agency and the City website. When any such money becomes the property of the City and is in a special fund, the City Council may transfer it to the General Fund. Public notice shall include the following information:  The individual or business name as shown on the issued check;  The amount of the issued check;  The fund in which it is held;  A statement announcing that the money shall become the property of the City on the date that is forty-five (45) days nor more than sixty (60) days after the first publication of the notice. B. Filing a Claim A party of interest may file a claim at any time until the date on which the money becomes the property of the City. The City shall obtain proper identification and assurance that the claimant is owed the money prior to re-issuing such payment. Proof of ownership may include but is not limited to:  The claimant’s name, address, telephone number, and Social Security Number or Federal Employer Identification Number;  Proof of identity such as a copy of a driver’s license, social security card, or birth certificate;  Amount of the claim(s);  The grounds on which the claim is founded. If a claim is rejected, the party who submitted the claim may file a verified complaint seeking to recover all, or a designated part, of the money in a court of competent jurisdiction within the county in which the notice was published. A copy of the complaint and the summons shall be served within thirty (30) days of receiving notice that the claim was rejected. The City shall withhold the release of the portion of unclaimed property for which a court action has been filed until a decision is rendered by the court. VI. POLICY REVIEW. Resolution No. 2019-014 Write Off and Unclaimed Property Policy Adopted: May 21, 2019 Page 8 of 8 The Finance Director shall review this Policy at a minimum of every five (5) years and recommend any changes to the City Manager and City Council.