HomeMy WebLinkAboutFCS-16-033 - Uncollectable Utility Accounts Write-off
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: March 7, 2016
SUBMITTED BY: Joyce Evans, Director of Revenue/Deputy City Treasurer, 519-
741-2200 extension 7895
PREPARED BY: Saleh Saleh, Supervisor of Collections and Payment Processing
519-741-2200 extension 7346
WARD(S) INVOLVED: ALL
DATE OF REPORT: February 17, 2016
REPORT NO.: FCS-16-033
SUBJECT: Uncollectable Utility Accounts Write-off
___________________________________________________________________________
RECOMMENDATION:
That uncollectable Utility Accounts amounting to $41,673 be written off against
the Allowance for Doubtful Utility Receivables
BACKGROUND:
As per council policy I-517 Utility 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 Customer
Information System (CIS). 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 December 2015.
REPORT:
Staff are recommending that accounts totalling $41,673 be 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 the
uncollectable accounts have been applied to reduce the debt outstanding. A total of
171 customer accounts are being recommended to be written off and transferred to a
third party collection agency.
The collection procedures staff have undertaken include:
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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.
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 $41,673 and
relate to the years 2013, 2014 and 2015. 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
$ 87,379$ 178,576,7150.0489%
2015
$ 110,788$ 177,391,1480.0625%
2014
$ 91,756$ 168,083,8870.0546%
2013
$ 99,371$ 164,818,1890.0603%
2012
$ 105,791$ 175,373,5560.0603%
2011
Total$ 495,085$ 864,243,4950.0573%
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:
This report has been posted to the City’s website with the agenda in advance of the
committee meeting.
CONCLUSION:
It has been determined that $41,673 of 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:
D. Chapman, Deputy CAO, Finance and Corporate Services &
City Treasurer
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