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HomeMy WebLinkAboutFIN-19-047 - Uncollectable Miscellaneous Receivable Accounts Write-offREPORT TO: Community & Infrastructure ServicesCommittee DATE OF MEETING:August 12, 2019 SUBMITTED BY: Saleh Saleh,Director of Revenue, 519-741-2200 extension 7346 PREPARED BY: Marcy Ignor, Supervisor of Customer Service and Collections, 519-741- 2200extension 7460 WARD (S) INVOLVED:ALL DATE OF REPORT:July 3, 2019 REPORT NO.: FIN-19-047 SUBJECT: Uncollectable Miscellaneous Receivable Accounts Write-off ___________________________________________________________________________ RECOMMENDATION: That uncollectableMiscellaneous Receivable Accounts amounting to $27,012be written off against the Allowance for Doubtful Receivables. BACKGROUND: As per council policy FIN-FEE-517Utility and Miscellaneous Receivable policy, approval from Council is required for accounts to be written-off and sent to an outside collection agency for third party collection efforts. This report represents Miscellaneous Receivables accounts that are deemed to be uncollectable by collections staff. Miscellaneous Receivables represent services that are generally billed through the City’s financial system (SAP). Examples of miscellaneous receivables include Direct Detect for alarm monitoring, Parking and Cemetery sales. Property tax and utility accounts are not included in miscellaneous receivables. REPORT: Staff are recommending that accounts totalling $27,012be written off and forwarded to a collection agency. Staff have worked diligently in attempting to collect on these accounts but have not been successful in the process. The collection procedures staff have undertaken include: Sending customers statements and demand letters. Verbal request by telephone or in person. Negotiating revised payment terms. Applying any deposits held to the outstanding amounts. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994for assistance. 9 - 1 Transferring uncollectable items to the customer’s property tax account where permitted by the Municipal Act. The current amount being recommended to be written off relates to 41customer accounts for services provided in the following areas: Community Services46 Accounting103 Cemeteries7,364 Fire285 Parking6,978 Operations6,404 Utilities (Cuts/Repairs)5,832 Total27,012 The cumulative amount of write-offs identified in this report equal $27,012and relate to the years 2017, 2018 and 2019. The cumulative write-offs are shown in the table below and the average is well below the targeted upper limit for write-offs set at 0.3% previously approved by Council. Miscellaneous Receivables Write-off CumulativeTotal $ InvoicedWrite-offs as a Write-offs for the YearYear to Date% of Sales 2019$2,235$15,952,3770.0140% 2018$45,310$23,132,4980.1959% 2017$31,638$19,990,2370.1583% 2016$32,255$17,350,4590.1859% 2015$50,673$18,483,5690.2741% Total$162,111$94,909,1400.1708% ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: The recommendation of this report supports the achievement of the city’s strategic vision through the delivery of core service. 9 - 2 FINANCIAL IMPLICATIONS: The uncollectable accounts will be written off against the Allowance for Doubtful Receivables account. COMMUNITY ENGAGEMENT: This report has been posted to the City’s website with the agenda in advance of the council / committee meeting. ACKNOWLEDGED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services 9 - 3