HomeMy WebLinkAboutFCS-17-183 - Uncollectable Utility Account Write-offREPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: December 4, 2017
SUBMITTED BY: Joyce Evans, Director of Revenue/Deputy City Treasurer,519-
741-2200 extension 7895
PREPARED BY: Saleh Saleh, Supervisor of Taxation and Cash Management 519-
741-2200 extension 7346
WARD(S) INVOLVED: ALL
DATE OF REPORT: September 30, 2017
REPORT NO.: FCS-17-183
SUBJECT: Utilities Account Write-off
___________________________________________________________________________
RECOMMENDATION:
That uncollectable Utility Accounts amounting to $313,820 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.
The majority of these invoices relate to usage for Gas and Water.In 2016, the SAP
Customer Relationship and Billing module was implemented. The collections module
was not turned on until May 2017. The delay in turning on the collections module is
best practice during an implementation of this size and was also recommended by the
implementation consultants.This has resulted in a higher than normal write-off.
The current report represents write-off of utility accounts which have been deemed to be
uncollectable up to the end of August 2017.
REPORT:
Staff are recommending that accounts totalling $313,820 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
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uncollectable accounts have been applied to reduce the debt outstanding. A total of
194 customer accounts are being recommended to be written off and transferred to a
third party collection agency.
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.
permitted by the Municipal Act.
The cumulative amount of utility write-offs identified in this report equal $313,820 and
relate to the years 2016 and 2017. 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
2017 υ ЎЊͲБЉЍυ ЊЋВͲЊЎЊͲВЉЌЉ͵ЉЍЉЊі
2016 υ ЋЍЋͲЌЊАυ ЊААͲЍЋЊͲЊЎВЉ͵ЊЌЏЏі
2015 υ ЊЉЎͲЍЏЍυ ЊАБͲЎАЏͲАЊЎЉ͵ЉЎВЊі
2014 υ ЊЊЋͲЍЉЋυ ЊААͲЌВЊͲЊЍБЉ͵ЉЏЌЍі
2013 υ ВЊͲАЎЏυ ЊЏБͲЉБЌͲББАЉ͵ЉЎЍЏі
Total$ 603,743$ 830,624,8120.0727%
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
strategic
vision through the delivery of core service.
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FINANCIAL IMPLICATIONS:
The uncollectable accounts will be written off against the Allowance for Doubtful Utility
Receivables account.
COMMUNITY ENGAGEMENT:
This report has been posted to the
committee meeting.
CONCLUSION:
It has been determined that $313,820 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: M.Goldrup, Acting Deputy CAO, Finance and Corporate
Services.
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