DELINQUENT ACCOUNTS RECEIVABLES AND OVER PER ACCOUNT

Transcription

1 CITY OF LOS ANGELES rnqii ra-m u;.-q*. i«i INTER-DEPARTMENTAL CORRESPONDENCE DATE: January 12, 2016 TO: Honorable Mnmbera of the Cfty Council c/o Office of the City Cl Brit FROM: Shane Mm, Chafr 3^Collections Board of Re ITvVb SUBJECT: DELINQUENT ACCOUNTS RECEIVABLES AND OVER PER ACCOUNT The Oily of Los Angeles Administrative Code Sections lo authorizes any board, commission, or head of any department q prepare a report to a Collections Board of Review (consisting of the Controller, City Administrative Officer and the Office of Finance) requesting authority lo remove uncollectible accounts from tha Department's active hooks The Collections Board of Review ( Board") may upon unanimous recommendation approve removal of accounts of less than is.oco. Accounts of 55,000 or more may be removed by the City Council upon recommendation from Ihe Board together with the findings of a board, commission, or head of a department. The Board convened on October 2Q> 2015 and evaluated accounts receivable write off requests submitted by I he El Puebk) Historic Monument and Ihe Bureau of San nation to write off acrounts equal to $5.OQ0 or more. This report informs the City Council of Ihe results of ihe Board evaluation ol ihe write off request from the above department. A copy of the wrile off request is attached along with the Findings of ihe Collections Board of Review Report No, " EL PUEBLO HISTORIC MONUMENT (El Pueblo) El Pueblo submitted 1 uncollectable account totaling Ths amount constitutes unpaid rent, interest and penalties owed by tenant Mrs. Yolanda Ruiz. Mrs. Ruiz has vacated the Olvera Street rental and filed for bankruptcy. The Board finds that all reasonable efforts have been exhausted In the collection of these accounts and additional efforts will be disproportionately costly in rotation to the probable outcome LOS ANGELES DEPARTMENT OF PUBLIC WORKS - BUREAU OF SANITATION (PW BOS) FW-BQS submitted 15 invoices totaling S These Invoices are for industrial wastewater fees. The invoices are all for South Coast Meial Finishing. Inc (SCMF), SCMF has filed for bankruptcy. PW BOS has terminated the industrial waste permit issued to SCMF Even though each individual invoice is under SB,000, they are alt for

2 Honorabte Mam bars of Hie- City Gounod January 12, 2016 Page 2 the same account. The accounts have been sent lo collodions and relumed as uncollectible. The Board finds lhat all reasonable efforts have been exhausted in the collection of those accounts and that they are past the statute of limitations on collections and additional efforts will be disproportionately costly In relation to the probable outcome. The Board recommends: That Ihe City Council, approve the Collections Board of Review's recommendations for the: 1 El Pueblo Historic Monument to remove from its active accounts receivables 1 uncollectible account totaling Sl2.040.S1: and 2. Bureau of Sanitation lo remove from its active accounts receivables 1 account totaling 526, Fiscal Impact Slatement: The proposed action wilt decrease Ihe City's receivable base by 530, rf you have questions and requests for additional Information, please call me at 213-9?B'7256 or e mail me at 3ha nc. n] 3 'i J [3 Attachments

3 FINDING OF THE COLLECTIONS BOARD OF REVIEW REPORT NO Pursuant Id the provisions of Sections 5 1&2 though of Ihe Los Angeles Administrative Code, ihe Collections Board of Review (Board) held a hearing to review* authorize andtar recommend delinquent accounts for write off. The meeting was held on October 28, 2015, in Room 350C of City Hall East, Los Angeles, California The Board Consists of the following members: Shane Min. Sr. Management Analyst II, representing the City Controller * Wai Yee Lau, Revenue Manager, representing the Office of Finance Melissa Krance, Inspector General of Revenue and Collections, representing the Office of the City Administrative Officer The Board's agenda included consideration for removal of various unodtectible accounts receivable from the active accounts el the Los Angeles Departments of Housing and Community Investment, Fire. Building and Safety, El PucbtD and Public Works - Bureau of Sanitation. The Board may approve write offs of accounts less than $5,000 each as authorized by ihe City Council (CF ), The Board may recommend write off of accounts $5,000 or more for approval by the City Council. The results of the Board's review are summarized below. El Pueblo Oft Los Angeles Historical Monument (El Pueblo) El Pueblo presented one write off request before the Board os follows: I. August 111, 2015 report requesting write off of 1 uncollectible account tola ling * Discussion. El Pueblo requests write off of unpaid rent, interest and penalties owed by Mrs. Yolanda Ruiz. Mrs. Ruiz has vacated the Olvera Street rental and filed for bankruptcy. The City's pre-bankruptcy petition claim for overdue rent, interest and penalties is $ Board's Decision. The Board has reviewed the uncollectible sccouni and unanimously agreed to recommend the Crty Council to approve the request from Ef Pueblto to remove from Its active accounts receivable the uncollectible amount of $12, representing 1 account equal to or more than $5,000 per account. Los Anodes Department of Building A Safely (LAPBSI LADBS presented one write off request before the Board as follows: 3. October 15, 2015 repod requesting write off of 11 unoollectible accounts totaling $12,629,54 representing Invoice amounts less lhan$5,00

4 Firding of Ihe Collections Board of Review October S Page 2 of 4 - Discussion. The invoices have bean returned after primary and secondary collections. The Department has cried to place liens on accounts where possible. Liens cannot be placed if Ihe property has been transferred. *. h M.ri'1! ' -*i Board's Decision. The Board agreed that additional efforts to colled could be disproportionately costly in relation lo the probable outcome. Therefore, ihe Board unanimously agreed to approve the request from LADBS lo remove from tls active accounts receivable the uncollectible amount ot 512, representing 11 accounts under $5,000 per account. Lot Anaetes Department of Public Works - Burpiu of S.pH.lton fptw-bqs) a chance to verify disc repa ceres in the report- Before (he Board ware two write of requests from PW-BQS as (flows:,- i.1. 'f- * -.' j^v I June 25, 2015 report requesting write-off df 66-) bntibllktibls accounts totaling '. r- -. $83, representing accounts less than $5, j>i l * t v ' r*. b K i : F- Discussion. These invoices-were generated by the PW-BDS (IWMD)lor industrial wastewater fees. These invoices are oyer three years old and the statute of limitation tor collections has passed on all these invoices The Board agreed at He July 29, 2015 meeting lo defer the request to the next Beard meeting lo give the department Board's Decision. The department verified the report and- resubmitted with corrections. The total number of Invoices and Ihe uqcoliedable amount Is correct as originally submitted. The Board is satisfied with the department's explanation or the discrepancies in the report and agreed I hat additional efforts lo colled could be disproportionately costly in relation to the probable outcome- Therefore, the Board unanimously agreed to approve the request from PW-BOS to remove from its active accounts receivable the uncollectible amount of $63, rep rose riling 684 accounts lass than $5,000 per account, II. October 16r 2015 report requesting write off of 15 uncollectible accounts totaling $26, representing accounts less Ehan $5,000. Discussion. PW-BOS provided a list of 15 invoices totaling $26, for industrial wastewater fees. These invoices are all for South Coast Metal Finishing, Inc. (SCMF). The accounts have been seat to primary and secondary collections and returned as uncollectible. The department also reports thal SCMF has tiled for bankruptcy. FW- BOS has terminated the Industrial Waste permit Issued in SCMF. Board's Decision. The Board agreed thal additional efforts to collect could be dispreportinnately costly In relation 1c the probable outcome, However, Ihe Board ruled that all 15 invoices are for 1 account arid Ihe unoouectable balance is over

5 Finding of the OcrilsdiDns Scurd of Review October 2S< 2015 Page J of 4 S Therefore. the Board unanimously agreed to recommend the City Council to approve the request from PW-BOS to remove from its active accounts receivable the uncollectible amount of 26, representing 1 account equal to or more than $5,600 per account. Housing and Community Investment Department of Los An galas (HCIDLAI HCIDLA presented one write off request before the Board as tallows: I, September report requesting write off of 8 uncollectible accounts receivable totaling , representing amounts equal to or greater than ss.ooo Discussion. The HCiDLA request write off of eight uncoltectable accounts tor the Systematic Code Enforcement Program. Board's Decision. The Office of Finance (Finance) has net returned these accounts to the department Collection efforts are still continuing on these accounts. The Board unanimously agrees to return the request lo the depanmenl. Department may resubmit the request when Finance completes collection efforts and returns (he uncoil actable accounts to the department. Igs Anflgtps Fjn& Depa.rtfne nijlafd) LAFD presented three write off requests before the Board as tallows: l. September 15, 2615 report requesting write off of 280 uncollectible accounts totaling $133, representing accounts Jess than $5,000. Discussion. LAFD provided a list uf 280 uncolteclabta accounts totaling 133, consisting of charges tar the services pt Fire Safety Officers. High-Rise Inspection fees. Inspection Restitution and Non Compliance Inspection fees billed in FV through FY , According to LAFD, these Invoices ha«been sent lo primary and secondary collections and returned as unoolfactable. LAFD continues collection efforts for Ihose still in statule even after write off. Board's Decision, The Board agreed (hat afl reasonable efforts have been exhausted in the collection of these accounts and additional efforts could be disproportionately costly in relation to the probable outcome. Board removed one account billed to the Los Angeles General Services Division as the Board does not have jurisdiction over inter departmental billing. Therefore, the Board unanimously approved the write off request from LAFD lo remove from rts active accounts receivable, 279 invoices totaling $133,520.28

6 Finding of ihe Collection* Board of Review October 28, 2015 Pape 4 c# September 15,2015 report requesting write off of >6.439 uncollectible accounts totaling $86,409, representing accounts less than $5,000. Discussion. LAFD provided a summary by month of uncollectible emergency ambulance billing accounts tolabng $86,409, The accounts are for the period December 2010 to September 2014 These accounts are covered by Ihe health Insurance portability and Accountability Act (HIPAA) and are being considered by the Board of Review under special procedures instituted for HIPAA related accounts. These accounts have been adjusted for partial collections, LAFD bale ihese invoices through ADPl lo Ihe customer, lo insurance providers and Med icaref Medical as required. ADPl abo conducts the primary collection functions. If the invoices are unpaid, they ere then send bo the collection agency Harris and Harris. All the accounts [ v, listed have been relumed as u noofleclible by Harris and Harris. L,lb. -, * u % "* Beard's Decision, The Board has reviewed Ihe accounts and has unanimously approved the write off request from LAFD lo remove from Its active accounts receivable, invoices totaling $86,409,432.50, * lit September 15,2015 report requesting write off of 2,443 uncollectible accounts totaling $1,150, representing accounts less than $5,000. Discussion. LAFD provided 3 list of 2,443 uncojieclable accounts totaling $1,150, related q CLIPA fees According to LAFD, these invoices have been sent lo primary and secondary collections and relumed as uncolleclable. Board's Decision, The Board agreed (hat all reasonable efforts have been exhausted in the collection of Ihesa accounts and additional efforts could be disproportionately cosily in relation to the probable OLFtoome- Therefore, the Board unanifrously approved the write off request from LAFD to remove from Its active accounts receivable Invoices totaling (1,150,467.73,