Agenda No. 6.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | September 16, 2025 |
| Department: | Finance |
| Subject: | Resolution 25-R-122 - Authorizing the EMS, Utility Billing, Schertz Magazine, and Library debt revenue adjustments (S.Gonzalez/J.Walters) |
BACKGROUND
In the EMS, Utility Billing, Library and Magazine functions, services are provided to customers up front and billing is settled later. Since services are provided before receiving payment, inevitably the City has customers that do not pay for the services provided.
When this occurs, staff reaches out to the customer to try to collect the outstanding payment including follow-up notices and phone calls to try to reach out to the customer to remind them of the outstanding balance and encourage payment. However, the longer the customer account goes without a payment the less likely that any payment will be received.
Once a customer account reaches 180 days without activity, Staff brings those accounts to the City Council to be “written off”. This process is an accounting procedure following the Generally Accepted Accounted Principles (GAAP), which lays the framework of accounting practices in the U.S. This designation means it is unlikely those outstanding balances will ever be collected. This leads to an accounting adjustment on the City’s Financial Statements to accurately show how much is still outstanding and is reasonable to expect collection.
If a customer’s account has been written off, this does not erase or forgive that debt. The city can and does collect some portion of the amount owed by those customers. This can be through the debt collection agency used by EMS or if the customer returns to the City and requests new services through the Magazine or Utility Billing.
On August 27, 2019, City Council approved the Schertz EMS Charity Care Policy. Approving the Charity Care Policy benefits our citizens who do not have insurance and do not have the ability to pay for ambulance services. In the past, these accounts were sent to collections and written off throughout year with little expectation to recover any revenue.
The Library write offs are for items which are deemed no longer collectible. Staff had not included these Library items in the past, but they are now being reviewed. The accounts Staff feels cannot be collected will come before council in the quarterly write-off requests. As of September 2025, there is $141,493.79 in past charges that are being evaluated by the Library Staff for potential collection. For this write-off, staff is proposing to write off $46,647.34 of that amount from 2018 to September 2021.
The resolution authorizes the debt for these areas that is more than 180 days outstanding as of March 1, 2025, to be written off. These write-offs come before council quarterly and last came before council on April 15, 2025.
Previous Write off Amount:
For September 2025, the amount includes write-off amounts for both June and September 2025.
When this occurs, staff reaches out to the customer to try to collect the outstanding payment including follow-up notices and phone calls to try to reach out to the customer to remind them of the outstanding balance and encourage payment. However, the longer the customer account goes without a payment the less likely that any payment will be received.
Once a customer account reaches 180 days without activity, Staff brings those accounts to the City Council to be “written off”. This process is an accounting procedure following the Generally Accepted Accounted Principles (GAAP), which lays the framework of accounting practices in the U.S. This designation means it is unlikely those outstanding balances will ever be collected. This leads to an accounting adjustment on the City’s Financial Statements to accurately show how much is still outstanding and is reasonable to expect collection.
If a customer’s account has been written off, this does not erase or forgive that debt. The city can and does collect some portion of the amount owed by those customers. This can be through the debt collection agency used by EMS or if the customer returns to the City and requests new services through the Magazine or Utility Billing.
On August 27, 2019, City Council approved the Schertz EMS Charity Care Policy. Approving the Charity Care Policy benefits our citizens who do not have insurance and do not have the ability to pay for ambulance services. In the past, these accounts were sent to collections and written off throughout year with little expectation to recover any revenue.
The Library write offs are for items which are deemed no longer collectible. Staff had not included these Library items in the past, but they are now being reviewed. The accounts Staff feels cannot be collected will come before council in the quarterly write-off requests. As of September 2025, there is $141,493.79 in past charges that are being evaluated by the Library Staff for potential collection. For this write-off, staff is proposing to write off $46,647.34 of that amount from 2018 to September 2021.
The resolution authorizes the debt for these areas that is more than 180 days outstanding as of March 1, 2025, to be written off. These write-offs come before council quarterly and last came before council on April 15, 2025.
Previous Write off Amount:
| March 2021: | $1,330,234.88 |
| June 2021: | $904,511.15 |
| September 2021: | $750,502.47 |
| December 2021: | $587.362.56 |
| March 2022: | $675,977.28 |
| June 2022: | $564,972.72 |
| September 2022: | $842,197.07 |
| December 2022: | $660,162.69 |
| March 2023: | $709,180.00 |
| June 2023: | $629,399.75 |
| September 2023: | $1,043,989.48 |
| December 2023: | $736,479.42 |
| March 2024: | $939,856.26 |
| June 2024: | $786,518.97 |
| September 2024: | $755,410.63 |
| December 2024: | $718,424.29 |
| March 2025: | $1,345,608.95 |
| June 2025: | $ ---- |
| September 2025: | $1,654,478.02 |
For September 2025, the amount includes write-off amounts for both June and September 2025.
GOAL
To approve write-offs of bad debt in accordance with the standards laid out by GAAP.
COMMUNITY BENEFIT
This will show the City's Financial Statements according to national standards and City policy.
SUMMARY OF RECOMMENDED ACTION
Approve Resolution No. 25-R-122 to write off receivables that are older than 180 days.
FISCAL IMPACT
This accounting adjustment will not affect the City’s Budget or financial standing. The amount written off is estimated during the budget process and is accounted for in the revenue estimations and the bad debt expense accounts. The action taken tonight will reduce the amount shown as owed to the City by $1,654,478.02 and set it equal to the amount seen as still reasonably collectible. The breakdown is as follows:
EMS - $999,506.52
EMS Charity Care - $564,470.70
Utility Billing - $43,853.46
Library - $46,647.34
Magazine - $0.00
The Library write offs are for items from 2018 through September 2021 which are deemed no longer collectible. Staff had not included these Library items in the past, but they are now being reviewed. Those accounts Staff feels cannot be collected will come before council in the quarterly write-off requests.
EMS - $999,506.52
EMS Charity Care - $564,470.70
Utility Billing - $43,853.46
Library - $46,647.34
Magazine - $0.00
The Library write offs are for items from 2018 through September 2021 which are deemed no longer collectible. Staff had not included these Library items in the past, but they are now being reviewed. Those accounts Staff feels cannot be collected will come before council in the quarterly write-off requests.
RECOMMENDATION
Staff recommends Council approve Resolution No.25-R-122.