===== PDF PAGE 58 ===== CITY OF WEST CHICAGO FINANCE COMMITTEE AGENDA ITEM SUMMARY ITEM TITLE: Annual Review of Accounts Receivable AGENDA ITEM NUMBER: 5C COMMITTEE DATE: November 2, 2026 COUNCIL AGENDA DATE: November 16, 2026 PREPARED BY: Katrina Hanna, Finance Director APPROVED BY: SIGNATURE__________________________ SIGNATURE__________________________ Annual Review of Accounts Receivable and the Importance of Write-Offs An annual review of outstanding accounts receivable is an important component of the City's financial management practices. This process allows staff to evaluate amounts owed to the City, assess the likelihood of collection, and ensure that financial records accurately reflect revenues that can reasonably be expected to be received. Over time, certain receivables may become increasingly difficult or impractical to collect due to the age of the debt, unsuccessful collection efforts, insufficient documentation, or other circumstances. While the City has a responsibility to pursue amounts owed, it must also recognize when continued collection efforts are unlikely to be successful or when the cost of collection may exceed the amount that could reasonably be recovered. Writing off uncollectible receivables is not an indication that the City is disregarding its responsibility to collect outstanding debts. Rather, it is a prudent financial management practice that acknowledges the difference between amounts billed and amounts realistically expected to be collected. Maintaining receivables that are unlikely to be collected can overstate the City's financial assets and present an inaccurate picture of its financial position. An annual review and appropriate write-offs provide several benefits: • Financial Accuracy: Ensures that the City's financial statements reflect a realistic assessment of outstanding receivables and their collectability. • Fiscal Accountability: Demonstrates responsible oversight of public funds by regularly evaluating outstanding balances and documenting collection efforts. • Operational Efficiency: Allows staff to focus collection resources on accounts with a reasonable likelihood of recovery rather than continuing efforts on accounts that may no longer be collectible. • Transparency: Provides the City Council with an understanding of outstanding obligations, collection challenges, and the financial impact of uncollectible accounts. • Internal Controls: Establishes a consistent process for reviewing aged balances, identifying collection concerns, and determining when adjustments are appropriate. It is also important to distinguish between an accounting write-off and forgiveness of a debt. A write-off removes an amount from the City's recorded receivables when collection is no longer reasonably anticipated; it does not necessarily eliminate the underlying legal obligation to pay. Depending on applicable laws and City policies, collection efforts may continue or resume if circumstances change. ===== PDF PAGE 59 ===== CITY OF WEST CHICAGO Steps the City takes to collect outstanding receivables: • Generate invoice clearly outlining payment due date o Mail past due notice o File lien (if applicable), many liens expire after 7 years and need to be refiled ▪ Utility bills ▪ Certain MOJ’s o Send invoice to collections ▪ Misc. fines and receivables ▪ False alarm fees Receivables recommended for Write-off Staff evaluated outstanding receivables from 2009-2022, and identified $43,219.18 in balances recommended for write-off based on their age, collection history, and likelihood of recovery. Accounts with active liens have been excluded from the recommendation. Supporting account-level detail is attached. Any amounts with active liens are not being recommended for write-off. False Alarm Fees $10,300.00 Lot Cutting Fees 9,113.25 Recording & General Misc Fees 20,912.04 General Reimbursement 1,879.68 Damaged Property 340.00 Engineering Fees 1,179.28 Employee Reimbursement 844.43 Scavenger License 2,475.00 $47,043.68 The FY2026 Budget is projected to generate sufficient surplus to absorb the proposed write-offs while maintaining the City’s 35% General Fund reserve policy and planned transfers to the Community Park and Downtown Revitalization Funds. ACTIONS PROPOSED: Recommend City Council approval of the write-off of $47,043.68 in aged accounts receivable, while continuing established collection practices and preserving legally enforceable collection rights where applicable. COMMITTEE RECOMMENDATION: ===== PDF PAGE 60 ===== City of West Chicago Write Off Summary Total Write Off - $47,043.68 Proposed GL Account Projected FY 26 Write Off Amount Ending Balance False Alarm Fees 0100-345500 $17,550.00 $10,300.00 $7,250.00 Lot Cutting Fees 0100-333000 $2,000.00 $9,113.25 -$7,113.25 Recording Fees & General Misc (Late Fees) 0100-389000 $181,500.00 $20,912.04 $342,087.96 General Reimbursement 0100-386000 $269,620.00 $1,879.68 $267,740.32 Damaged Property* 0100-382000 $0.00 $340.00 -$340.00 Engineering Fees 0100-362000 $350,000.00 $1,179.28 $1,179.28 Employee Reimbursment 0100-386100 $291,500.00 $844.43 $290,655.57 Scavanger License* 0100-349000 $0.00 $2,475.00 -$2,475.00 $1,112,170.00 $47,043.68 $898,984.88 * Denotes No Longer a Budgeted Item ===== PDF PAGE 61 ===== City of West Chicago False Alarms Fees for Write off 0100-345500 $17,550.00 $10,300.00 $7,250.00 Year Invoice Number Customer # Amount 2009 QAB0000835 0000002744 $400.00 2010 QAB0000860 0000002837 $200.00 2010 QAB0000866 0000002724 $400.00 2010 QAB0000867 0000002841 $200.00 2010 QAB0000915 0000002744 $400.00 2010 QAB0000931 0000002883 $100.00 2018 ALRM000026 0000003648 $200.00 2018 ALRM000035 0000003667 $100.00 2018 ALRM000037 0000003648 $200.00 2018 ALRM000048 0000003667 $200.00 2018 ALRM000054 0000003648 $300.00 2018 ALRM000113 0000003667 $300.00 2019 ALRM000149 0000003667 $100.00 2019 ALRM000181 0000003783 $200.00 2019 ALRM000196 0000003797 $100.00 2019 ALRM000218 0000003817 $100.00 2019 ALRM000255 0000003817 $100.00 2020 ALRM000269 0000003794 $200.00 2020 ALRM000277 0000003794 $100.00 2020 ALRM000279 0000003794 $400.00 2020 ALRM000287 0000003885 $100.00 2020 ALRM000302 0000002728 $100.00 2020 ALRM000328 0000002837 $100.00 2020 ALRM000333 0000001825 $400.00 2020 ALRM000337 0000003885 $100.00 2021 ALRM000350 0000003935 $100.00 2021 ALRM000364 0000003944 $400.00 2021 ALRM000367 0000003946 $100.00 2021 ALRM000369 0000003935 $200.00 2021 ALRM000373 0000000686 $100.00 2021 ALRM000374 0000003935 $100.00 2021 ALRM000377 0000001900 $400.00 2021 ALRM000382 0000002723 $100.00 2021 ALRM000394 0000003973 $200.00 2021 ALRM000397 0000000509 $100.00 2021 ALRM000409 0000003972 $100.00 2021 ALRM000417 0000003931 $100.00 2021 ALRM000418 0000004011 $100.00 2021 ALRM000430 0000004011 $100.00 2021 ALRM000433 0000000158 $100.00 Projected 2026 Balance Write Off Balance Ending GL Balance ===== PDF PAGE 62 ===== 2021 ALRM000434 0000004019 $200.00 2021 ALRM000436 0000003753 $200.00 2022 ALRM000441 0000002723 $200.00 2022 ALRM000443 0000003634 $100.00 2022 ALRM000448 0000003931 $100.00 2022 ALRM000457 0000004055 $300.00 2022 ALRM000458 0000003931 $200.00 2022 ALRM000460 0000004037 $100.00 2022 ALRM000462 0000003634 $100.00 2022 ALRM000466 0000004055 $100.00 2022 ALRM000486 0000000351 $200.00 2022 ALRM000487 0000004069 $100.00 2022 ALRM000494 0000000351 $200.00 2022 ALRM000501 0000004092 $200.00 2022 ALRM000511 0000004055 $100.00 2022 ALRM000524 0000004120 $100.00 2022 ALRM000529 0000004037 $100.00 2022 ALRM000545 0000003958 $200.00 2022 ALRM000547 0000000047 $100.00 ===== PDF PAGE 63 ===== City of West Chicago Lot Cutting Fees for Write off 0100-333000 $2,000.00 $9,113.25 -$7,113.25 Year Invoice # Customer # Amount Lien Date Lien Expired Pre -2009 LCF0000063 0000002445 $145.00 10/23/2007 10/23/2014 2009 LCF0000106 0000002765 $175.00 9/23/2009 9/23/2016 2010 LCF0000133 0000002878 $275.00 7/21/2010 7/21/2017 2010 LCF0000166 0000002926 $325.00 12/6/2010 12/6/2017 2010 LCF0000168 0000002720 $550.00 12/6/2010 12/6/2017 2010 LCF0000190 0000002964 $195.00 2/22/2011 2/22/2018 2010 LCF0000203 0000002969 $195.00 3/21/2011 3/21/2018 2011 LCF0000291 0000003075 $159.00 11/7/2011 11/7/2018 2012 LCF0000352 0000003132 $163.00 1/11/2013 1/11/2020 2013 LCF0000382 0000003236 $170.00 9/4/2013 9/4/2020 2013 LCF0000381 0000001697 $255.00 9/5/2013 9/5/2020 2013 LCF0000407 0000003272 $170.00 12/17/2013 12/17/2020 2013 LCF0000408 0000003273 $170.00 1/31/2014 1/31/2021 2018 LCF0000538 0000003698 $170.00 3/5/2019 3/5/2026 2014 LCF0000456 0000003374 $170.00 No Lien No Lien 2015 LCF0000486 0000003448 $170.00 No Lien No Lien 2016 LCF0000495 0000003512 $170.00 11/4/2016 11/4/2023 2018 LCF0000546 0000000246 $380.00 10/22/2021 10/22/2028 2019 LCF0000554 0000000246 $244.00 10/22/2019 10/22/2026 2019 LCF0000547 0000003786 $1,150.00 No Lien No Lien 2019 LCF0000553 0000001827 $316.00 No Lien No Lien 2020 LCF0000568 0000000246 $1,815.50 5/5/2021 5/5/2028 2021 LCF0000578 0000000246 $173.00 10/22/2021 10/22/2028 2021 LCF0000588 0000000246 $319.00 10/22/2021 10/22/2028 2021 LCF0000592 0000000246 $173.00 11/18/2021 11/18/2028 2022 LCF0000601 0000000246 $337.00 9/2/2022 9/2/2029 2022 LCF0000623 0000000246 $578.75 12/21/2022 12/21/2029 Oustanding Not included in write off sue to Active Leins or Litigation $16,776.07 Projected 2026 Balance Write Off Balance Ending GL Balance ===== PDF PAGE 64 ===== City of West Chicago Recording Fees 0100-389000 $181,500.00 $1,500.00 $180,000.00 Year Invoice # Customer # Amount Lien Date Lien Expired 2010 RCD0000012 0000002878 $100.00 7/21/2010 7/21/2017 2010 RCD0000023 0000002926 $100.00 12/6/2010 12/6/2017 2010 RCD0000035 0000002928 $100.00 Not on Record 2010 RCD0000061 0000002720 $100.00 12/6/2010 12/6/2017 2011 RCD0000078 0000002964 $100.00 2/22/2011 2/22/2018 2011 RCD0000085 0000002969 $100.00 3/21/2011 3/21/2018 2011 RCD0000173 0000003075 $100.00 11/7/2011 11/7/2018 2013 RCD0000211 0000003132 $100.00 1/11/2013 1/11/2020 2013 RCD0000222 0000003222 $100.00 8/21/2023 8/21/2030 2013 RCD0000234 0000003236 $100.00 9/4/2013 9/4/2020 2013 RCD0000236 0000001697 $100.00 9/5/2013 9/5/2020 2013 RCD0000244 0000002767 $100.00 Not on Record 2013 RCD0000254 0000003272 $150.00 12/17/2013 12/17/2020 2014 RCD0000255 0000003273 $150.00 1/31/2014 1/31/2021 Oustanding Not included in write off sue to Active Leins or Litigation $3,400.00 Projected 2026 Balance Write Off Balance Ending GL Balance ===== PDF PAGE 65 ===== City of West Chicago General Misc (late Fees) for Write Off 0100-389000 $181,500.00 $19,412.04 $162,087.96 Year Invoice # Customer # Amount 2009 GCM0000054 0000002656 235.86 2009 GCM0000071 0000002656 622.58 2009 GCM0000085 0000002656 407.55 2009 GCM0000102 0000002656 489.06 2009 GCM0000120 0000002744 400.00 2009 GCM0000140 0000002656 586.87 2009 GCM0000156 0000002656 704.24 2009 GCM0000175 0000002656 750.00 2009 GCM0000195 0000002656 750.00 2010 GCM0000202 0000002656 750.00 2010 GCM0000214 0000002656 750.00 2010 GCM0000227 0000002656 750.00 2010 GCM0000236 0000002656 750.00 2010 GCM0000243 0000002744 400.00 2010 GCM0000255 0000002724 400.00 2010 GCM0000256 0000002837 200.00 2010 GCM0000259 0000002841 200.00 2010 GCM0000269 0000002656 1,500.00 2010 GCM0000276 0000002656 750.00 2010 GCM0000282 0000002883 100.00 2010 GCM0000285 0000002656 750.00 2017 GCM0000367 0000003544 1,139.38 2018 GCM0000371 0000003643 200.00 2018 GCM0000374 0000002508 100.00 2018 GCM0000376 0000003648 200.00 2018 GCM0000380 0000003667 100.00 2018 GCM0000389 0000003667 200.00 2019 GCM0000400 0000003733 100.00 2019 GCM0000404 0000003667 100.00 2019 GCM0000408 0000003648 200.00 2019 GCM0000409 0000003648 300.00 2019 GCM0000420 0000003667 300.00 2019 GCM0000425 0000002164 526.50 2019 GCM0000429 0000003783 200.00 2019 GCM0000434 0000003797 100.00 2019 GCM0000437 0000000686 100.00 2019 GCM0000440 0000003818 100.00 2019 GCM0000445 0000003817 100.00 2020 GCM0000458 0000003841 100.00 2020 GCM0000460 0000003817 100.00 Projected 2026 Balance Write Off Balance Ending GL Balance ===== PDF PAGE 66 ===== 2020 GCM0000462 0000003794 200.00 2020 GCM0000464 0000003794 100.00 2020 GCM0000465 0000003794 400.00 2020 GCM0000467 0000003885 100.00 2020 GCM0000478 0000002728 100.00 2020 GCM0000496 0000001825 400.00 2020 GCM0000497 0000002837 100.00 2021 GCM0000501 0000003885 100.00 2021 GCM0000510 0000003935 100.00 2022 GCM0000543 0000004055 100.00 2022 GCM0000553 0000004090 100.00 2022 GCM0000556 0000004092 200.00 2022 GCM0000557 0000003680 100.00 2022 GCM0000560 0000004055 100.00 2022 GCM0000561 0000000593 100.00 2022 GCM0000562 0000004120 100.00 2022 GCM0000564 0000004037 100.00 2022 GCM0000565 0000004069 200.00 2022 GCM0000569 0000004069 100.00 2022 GCM0000570 0000004134 100.00 Oustanding Not included in write off sue to Active Leins or Litigation 169.00 $ ===== PDF PAGE 67 ===== City of West Chicago General Reimbursment for Write Off 0100-386000 $269,620.00 $1,879.68 $267,740.32 Year Invoice # Customer # Amount Lien Date Lien Expired 2009 GCR0000072 0000002790 35.12 2016 GCR0000099 0000002391 1,080.00 2/1/2017 2/1/2024 2020 GCR0000150 0000003872 74.05 2020 GCR0000151 0000003873 41.55 2020 GCR0000153 0000003874 307.33 2020 GCR0000156 0000003875 36.10 2020 GCR0000158 0000003877 299.72 2021 GCR0000552 0000003863 5.81 City of West Chicago Damaged Property for Write off 0100-382000 $0.00 $340.00 -$340.00 Year Invoice # Customer # Amount Pre -2029 DCP0000005 0000002274 340.00 City of West Chicago Engineering Fees for Write off 0100-362000 $350,000.00 $1,179.28 $348,820.72 Year Invoice # Customer # Amount 2009 ENF0000178 0000002656 1,179.28 City of West Chicago Employee Reimbursments for Write off 0100-386100 $291,500.00 $844.43 $290,655.57 Year Invoice # Customer # Amount 2016 EPR0000018 0000003486 502.91 2016 EPR0000019 0000003520 341.52 Ending GL Balance Projected 2026 Balance Write Off Balance Ending GL Balance Projected 2026 Balance Write Off Balance Ending GL Balance Projected 2026 Balance Write Off Balance Ending GL Balance Projected 2026 Balance Write Off Balance ===== PDF PAGE 68 ===== City of West Chicago Scavanger License for Write off 0100-349000 $0.00 $2,475.00 -$2,475.00 Year Invoice # Customer # Amount Pre -2029 SLF0000049 0000002363 2,475.00 Projected 2026 Balance Write Off Balance Ending GL Balance