HomeMy WebLinkAboutFIN-19-062 - Uncollectable Utility Receivable Accounts Write-offREPORT TO: Community & InfrastrctureServices Committee
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-19-062
SUBJECT: Uncollectable Utility Receivable AccountsWrite-off
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RECOMMENDATION:
That uncollectable Utility Accounts amounting to $166,590be written off against the
Allowance for Doubtful Utility 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.
Utilities receivable represent invoices generally billed through the City’s SAP CR&B billing
System. The majority of these invoices relate to usage for Gas and Water. The current report
represents write-off of utility accounts which have been deemed to be uncollectable up to the
end of June 30, 2019.
REPORT:
Staff are recommending that accounts totalling $166,590be written off and forwarded to the
collection agency. Staff have worked diligently in attempting to collect on these accounts but
have not been successful either due to the customer declaring bankruptcy or having no
forwarding address. Any tenant deposits previously received on theuncollectable accounts
have been applied to reduce the debt outstanding. A total of 339customer accounts are being
recommended to be written off and transferred to a third partycollection agency.
The collection procedures staff have undertaken include:
Sending customers statements and demand letters.
Verbal request by telephone or in person.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994for assistance.
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Negotiating revised payment terms.
Applying any deposits held to the outstanding amounts.
Transferring uncollectable items to the customer’s property tax account where permitted
by the Municipal Act.
The cumulative amount of utility write-offs identified in this report equal $166,590and 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.
A five year summary of write-offs is included in the table below.
Utility Accounts Write-off
CumulativeTotal $ InvoicedWrite-offs as a
Write-offs for the YearYear to Date% of Sales
2019$ 38,951$ 106,828,139 0.0365%
2018$ 227,557$ 211,483,209 0.1076%
2017$ 205,338$ 200,367,149 0.1025%
2016$ 282,841$ 177,421,159 0.1594%
2015$ 105,464$ 178,576,715 0.0591%
Total$860,151$874,676,3710.0983%
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.
FINANCIAL IMPLICATIONS:
The uncollectable accounts will be written off against the Allowance for Doubtful Utility
Receivables account.
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COMMUNITY ENGAGEMENT:
INFORM – This report has been posted to the City’s website with the agenda in advance of the
council / committee meeting.
CONCLUSION:
It has been determined that $166,590of utility accounts are uncollectable and staff are
recommending that the accounts be written off to the Allowance for Doubtful Utility Receivable
account. The uncollectable account listing will be forwarded to a collection agency, which will
use their best efforts to collect these accounts.
ACKNOWLEDGED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services
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