(1) As used in this section “claim” shall mean any sum due the city from another and includes but is not limited to taxes, assessments, fines, fees, charges, rents, penalties, payments, amounts due the city on contracts or arising from damages sustained by the city. It shall also include any interest due thereon.
(2) Except as provided in subsections (3) and (4) of this section, it shall be the duty of the city manager or the manager’s designee to collect all claims in full and to take all actions necessary in the discretion of the city manager or the manager’s designee to collect the claims.
(3) When in the discretion of the city manager or the manager’s designee it appears in the best interest of the city or it appears the cost of requiring timely payment is not justified, the city manager or the manager’s designee may extend the time for payment of a claim or the rate of interest thereon, or both. In consideration for such a modification of the claim, the city manager or the manager’s designee may require additional security to insure its payment.
(4) The city manager or the manager’s designee may compromise, settle, or cancel any claim when it is in the city’s financial interest and:
(a) Where litigation involving the validity of the claim is pending or seriously threatened and there is a grave legal question as to the validity of the claim;
(b) When, notwithstanding section 2.580, accepting payment in the form of property of equal or greater value than the claim insures payment of the claim that otherwise may be uncollectible or collectible at great expense to the city;
(c) Where good and sufficient cause is shown and the amount of the claim is $10 or less;
(d) When any claim has been delinquent for seven or more years and:
1. All reasonable efforts have been made to effect collection,
2. The person against whom the city has a claim cannot be located or is dead, and
3. The claim is wholly uncollectible.
(e) When the city manager or the manager’s designee determines that the administration and collection costs involved would exceed the amount that can reasonably be expected to be recovered;
(f) When the property against which a city lien exists is donated to the city, provided the city makes no payment for the property and the property is not pledged as security to the holders of any evidence of city indebtedness;
(g) When the adjustment of the claim involves only interest or penalties which were imposed by a discretionary administrative decision; or
(h) When the claim involves an administrative civil penalty assessed under section 2.018.
(5) The authority granted the city manager or the manager’s designee in this section does not allow the waiver of any sum due the city under this code or state law the payment of which is a precondition to receiving a benefit, service, decision, permit or privilege issued or to be performed by the city.
(6) Any modification, compromise, settlement or cancellation of a claim under this section shall be reviewed by a city attorney, reduced to writing, signed when possible by the parties thereto, and recorded when necessary. Such agreements shall provide that in the event the obligor has withheld or misrepresented material facts or committed fraud, a penalty in the amount of the original claim shall be added to the sums then due and the entire amount shall be immediately due and payable to the city , and such other provisions as may be required by the city manager or the manager’s designee.