HomeMy WebLinkAboutFIN-2022-309 - Uncollectable Utility Receivable Account Write-Off
Financial Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: August 8, 2022
SUBMITTED BY: Saleh, Saleh, Director, Revenue, 519-741-2200 ext. 7346
PREPARED BY: Marcy, Ignor, Manager Utility billing and Customer Service, 519-741-
2200ext 7460
WARD(S) INVOLVED: ALL
DATE OF REPORT: July 4, 2022
REPORT NO.: FIN-2022-309
SUBJECT: Uncollectable Utility Receivable Account Write-Off
RECOMMENDATION:
That uncollectable utility accounts amounting to $231,528 be written off against the
allowance for doubtful utility receivables.
REPORT HIGHLIGHTS:
As per council policy, approval from Council is required for accounts to be written-off and
sent to an outside collection agency for third party collection efforts.
Staff have worked diligently in attempting to collect on these accounts but have not been
successful in the process.
This report recommends that accounts totalling $231,528 be written off and forwarded to an
outside collection agency.
BACKGROUND:
As per council policy FIN-FEE-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 gene
System. The majority of these invoices relate to usage for Gas and Water. The current report
represents write-off of utility accounts for a one-year period ending June 30, 2022.
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REPORT:
Staff are recommending that accounts totalling $231,528 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 353 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.
by the Municipal Act.
The cumulative amount of utility write-offs identified in this report equal $231,528 and relate to
the years 2019, 2020, 2021 and 2022. 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
2022 34,165$ 121,198,4640.0282%
2021$ 147,687$ 216,217,8050.0683%
2020$ 215,030$ 213,604,9760.1007%
2019$ 216,675$ 202,658,0950.1069%
2018$ 261,616$ 211,483,2090.1237%
Total$ 875,173$ 965,162,5490.0907%
STRATEGIC PLAN ALIGNMENT:
the delivery of core service.
FINANCIAL IMPLICATIONS:
The uncollectable accounts will be written off against the Allowance for Doubtful Utility
Receivables account.
COMMUNITY ENGAGEMENT:
INFORM
council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
FIN-FEE-517 Collections- Utility and Miscellaneous Receivable
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services