Consideration and Approval of Utility Account Write-offs:  Delinquent and uncollectable accounts for Fiscal Year 2012.
 

Generally accepted business practices allow for the write-off of uncollectable accounts. City staff has exhausted collection efforts on the eligible accounts and will no longer actively collect on them. Where possible, the amount owed has been been applied against the credit of the debtor and may be collected in the future.  Pursuant to federal consumer debt collection law, delinquent account information is not subject to public release.

Subsidiary Decisions Points: No subsidiary decision points.

None. Each year, the City anticipates that there will be uncollectable utility accounts and reserves an amount at year end for these accounts.

Effective governance.

No.

• Authorize the write-off of uncollectable utility accounts.
• Do not authorize the write-off of uncollectable utility accounts and continue collection efforts.

 

Before any account is eligible for write-off, staff must initiate collection efforts on each account after it becomes delinquent. When collection efforts are exhausted, the account is eligible for write-off. If possible, any amounts due are applied to the customer's credit. If placed on the customer’s credit, the amount owed remains active for 7 years after the delinquency date. Application against the credit of the debtor may lead to the recovery of some of the delinquent amounts in the future. This often occurs when customers apply for credit via other avenues (mortgages, car loans, apartment rentals, etc.).

Total utility billings in FY12 were approximately $29.8 million.  The write-offs are approximately 0.33% of the total amount.  The uptick in collections for FY12 is attributable to a revised collections process that aims to begin the collections process more quickly. Below the history table is a table showing the breakdown of FY12 Utility Account Write-Offs. 

Pursuant to federal consumer debt collection law, delinquent account information is not subject to public release.

FY12 Utility Account Write-Off Breakdown

Utilities	Public Works	Storm Water	Taxes
$67,007.20	$23,647.05	$3,848.82	$2,695.28

Staff, using billing statements, letters and telephone calls, has worked the write-off accounts.  When customers fail to make payments, they may be denied access to future City services and, when possible, the amount owed is applied to their credit.

It is sound financial management practice to reduce assets to reflect their true valuation.  Failure to write-off accounts deemed uncollectable overstates the asset value of the City.

Inform
 

09/18/2012 Approved  EAB