TO: Mayor and Commission AGENDA DATE: 2/9/2026
FROM: City Manager AGENDA ITEM: 5 - B
SUBJECT:
Title
Request for approval of Resolution No. 2026-09 - Fiscal Year 2025 Utility Billing and Miscellaneous Accounts Receivable Account Adjustment.
Body
LOCATION:
Citywide
COST:
001 - $87,863.50
401 - $242,337.86
SOURCE OF FUNDS:
Not Applicable
ORIGINATING DEPARTMENT:
Finance
POTENTIAL MOTION:
Recommendation
“I move to approve Resolution No. 2026-09, Utility Billing and Miscellaneous Accounts Receivable Account Adjustment”
END
BACKGROUND:
Background
Throughout each fiscal year, the City accumulates various types of uncollectible revenue as a result of accounts being terminated, individuals filing for bankruptcy, businesses becoming inactive, or balances being outstanding over 180 days. These amounts are subject to write-off at the end of each fiscal year.
This process is an accounting procedure following the Generally Accepted Accounting Principles (GAAP), which lays the framework of accounting practices in the U.S. In applying GAAP accounting principles, the act of writing off outstanding account balances is a necessary accounting function that leads to an accounting adjustment on the City’s Financial Statements to accurately show the outstanding balance and the expectation of timely collection is unlikely. If a customer’s account has been written off as uncollectible on the City Financial Statements, this does not erase or forgive the debt. The City can and does collect some portion of the amount owed by those customers through several methods. If it is an owner-occupied location, liens can be filed with the Clerk of Court and will be per the Write-Off of Uncollectible Accounts Policy of 2025. These liens are typically satisfied when the property is conveyed. For tenant accounts, when the customer requests new utility services, we attempt to collect any outstanding balance prior to establishing a new service.
The City provides utility services to over 38,000 customers and the monthly billing is settled in arrears (after usage has occurred). Since services are provided before receiving payment, inevitably, the City has customers that do not pay for the services provided. When this occurs, staff makes every possible attempt to reach out to the customer to collect the outstanding payment, including follow-up notices to remind them of the outstanding balance and encourage payment. However, the longer the customer account goes without payment, the less likely that any payment will be received. This is an annual request and was last approved by the Commission for a write-off (accounting adjustment) in February 2025.
The amount requested for adjustment is $242,337.86 as of January 15, 2026. This amount changes daily as accounts might be paid prior to the Commission’s action. The outstanding amount includes:
• 3,032 accounts (Residential 2,995 and 37 commercial)
• Residential accounts of $225,039.97
• Commercial accounts of $17,297.89
• The average delinquency is $79.93
• Accounts over $1,000 - 16 accounts
• It represents less than 0.775% of our annual billings for utility services.
• The last request for write-offs was in 2025 for accounts from 2004.
Additionally, the City provides various services to individuals within Deltona, from fire inspection services, hazardous use permits, and business tax receipts (BTRs). The amount requested for adjustment of $87,863.50 includes $71,008.50 in BTRs and $16,855.00 in fire inspection fees. Business Tax and Code Enforcement staff are making site visits to ensure compliance with LDC Section 22-4 with all outstanding BTRs.
An "acceptable" write-off percentage of accounts receivable varies based on industry and company specifics, but generally, a percentage between 1% and 5% of total accounts receivable is considered reasonable, with older, past-due receivables carrying a significantly higher write-off rate depending on the aging schedule used.
The total adjustments of $330,201.36 can be found in Exhibit A.
Accounts that are less than six and half years old will be sent to collections to assist with collections of all outstanding accounts.
Staff implemented several new initiatives beginning in October 2025 to help minimize future write-offs, such as implementing three new policies regarding Write-Off of Uncollectible Accounts Policy, Procedure for Returned Checks and required deposits when continually delinquent and on disconnection status. In additional the contract with Online Utility Exchange will assist with collections of aged accounts and establishment of a utility credit rating system to guide staff in the required deposits. All these steps have the overall goal of minimizing future accounts receivable for write-off.
End