Consideration and Approval of Non-sufficient Funds (NSF) Check Write-offs:  Delinquent and uncollectible accounts for Fiscal Year 2012.

Generally accepted business practices allow for the write-off of uncollectable checks.  City staff has exhausted collection efforts on the eligible accounts and will no longer actively collect on them.  Where possible, the amount owed has been applied against the credit of the debtor and may be collected in the future. Pursuant to federal consumer debt collection law, delinquent account information is not subject to public release.

Subsidiary Decisions Points:  No subsidiary decision points.

None.  Each year, the City anticipates that there will be uncollectable non-sufficient funds (NSF) checks and reserves an amount at year end for these accounts.

Effective governance.

No.

• Authorize the write-off of uncollectable non-sufficient funds (NSF) checks.
• Do not authorize the write-off of uncollectable non-sufficient funds (NSF) checks and continue collection efforts.

 

Before any account is eligible for write-off, staff must initiate collection efforts on each account after it becomes delinquent. When collection efforts are exhausted, the account is eligible for write-off. If possible, any amounts due are applied to the customer's credit. If placed on the customer’s credit, the amount owed remains active for 7 years after the delinquency date. Application against the credit of the debtor may lead to the recovery of some of the delinquent amounts in the future. This often occurs when customers apply for credit via other avenues (mortgages, car loans, apartment rentals, etc.).
 
In FY12, the city is writing off Insufficient Funds (NSF) Checks for the first time in at least a decade.  Many of the checks are holdovers from an outside collection agency the City used from approximately 2004 to 2008.  Given that the amounts are usually small, NSF check write-offs may not happen on a yearly basis.  Instead, NSF check write-offs will happen on an "as needed" basis.

Pursuant to federal consumer debt collection law, delinquent account information is not subject to public release.

Insufficient Funds (NSF) Checks History

Write-Off Year	Amt of Write-Off
FY12	$4,566.55

Staff, using billing statements, letters, and telephone calls, has worked the write-off checks.  When customers fail to make payments, they are denied access to future City services and, when possible, the amount owed is applied to their credit.

It is sound financial management practice to reduce assets to reflect their true valuation.  Failure to write-off accounts deemed uncollectable overstates the asset value of the city.

Inform

09/18/2012 Approved EAB