title
Approve the write-off of accounts receivable due to Solano County in the amount of $1,898.42 related to a supplemental property tax refund (4/5 vote required); Discharge the Auditor-Controller’s Office from further collection efforts; and Authorize the Auditor-Controller’s Office to remove this account from the County’s accounting records
body
Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors authorize the Auditor-Controller to:
1. Write-off accounts receivable due to Solano County in the amount of $1,898.42 related to a supplemental property tax refund (4/5 vote required);
2. Discharge the Auditor-Controller’s Office (ACO) from further collection efforts; and
3. Authorize the Auditor-Controller’s Office to remove this account from the County’s accounting records.
SUMMARY/ DISCUSSION:
On April 23, 2013, the ACO Property Tax Division issued a supplemental property tax refund to Bank of New York Mellon (BNY) for $3,796.84. A supplemental refund results when there is a reduction in the value of property usually due to a change in ownership. Bank of New York Mellon took possession of the property on April 6, 2012. Because the County’s records indicated that BNY owned the property at the beginning of FY2012/13, up to the date of the refund, BNY received the entire refund.
After the refund was issued, our office was notified that the property had been sold to SDS Realty Corporation (SDS) on January 7, 2013; therefore, SDS was entitled to 50% of the FY2012/13 supplemental property tax refund. However, since the subsequent change of ownership was not recorded prior to the issuance of the refund to BNY, the full refund was paid to BNY resulting in an overpayment of $1,898.42. Subsequently, the Auditor-Controller’s Office issued SDS its 50% share of the refund.
The ACO made numerous attempts to collect the overpayment from BNY. The ACO and the County’s collection agent, Pacific Credit Services, have exhausted all efforts to recover the $1,898.42 from Bank of New York Mellon. Therefore, the ACO is requesting approval to write-off $1,898.42 in delinquent accounts receivable related to a supplemental property tax refund.
Additionally, Government Code section 25257 allows a county officer to request a discharge from accountability for the collection of amounts due and payable to the county if such amount is too small to justify the cost of collection, the likelihood of collection does not warrant the expense involved, or the amount thereof has been lawfully compromised or adjusted.
Approval of the staff recommendation will eliminate further administrative costs and staff time spent on collection activities where it appears there is no reasonable expectation of collecting the receivable.
FINANCIAL IMPACT:
The write-off of the outstanding accounts receivable will result in an expenditure in the General Fund-General Revenue budget, however, there are sufficient appropriations in the General Revenue budget to absorb the cost in FY2019/20. Moreover, the cost associated with preparing the agenda item are nominal and absorbed by the Auditor-Controller’s FY2019/20 Adopted Budget.
ALTERNATIVES:
The Board of Supervisors could choose not to write-off this account and require the Auditor-Controller’s Office to continue with collection efforts; however, this alternative is not recommended as the likelihood of collection is remote and the three-year statute of limitations prevents the County from pursuing legal remedies to collect these delinquent accounts. Moreover, continuing to maintain the accounting records for these uncollectible accounts is burdensome and unnecessary.
OTHER AGENCY INVOLVEMENT:
None.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION