HomeMy WebLinkAboutFIN-06-025 - Uncollectable Utility Accounts Write Off
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KITCHENER
Financial Services
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Report To:
Date of Meeting:
Submitted By:
Prepared By:
Ward(s) Involved:
Date of Report:
Report No.:
Subject:
Mayor Carl Zehr and Members of Council
August 28, 2006
Pauline Houston, General Manager of Financial Services
& City Treasurer
Joyce V. Evans, Director of Revenue (Ext. 2895)
All
August 22, 2006
FIN-06-025
RECOMMENDATION:
Uncollectable Utility Accounts Write Off
EXECUTIVE SUMMARY:
That Uncollectable Utility Accounts, amounting to $88,382.37, be written
off against the Allowance for Doubtful Sundry Receivables and the
Allowance for Doubtful Utility Receivables.
The last write off report for Uncollectable Utility Accounts approved by Council in March 2006
totalling $111,619.23 and covered the period from 2000 to December 2005. The current report
reflects uncollectable utility accounts totalling $88,382.37 for the period from 2002 and ending
June 30, 2006.
BACKGROUND:
The current report represents write off of utility accounts which have been deemed to be
uncollectable up to the end of June 2006.
At this point in time we continue to manage accounts from 2002 forward. Council approved a
collection policy for utilities which recommended that the targeted upper limit for write-offs be set at
0.3%. Staff continue their efforts in reducing the level of delinquent accounts and to maintain
write-ofts at below the targeted upper limit as recommended by Council.
REPORT:
All reasonable efforts have been made by Revenue Division staff to collect these amounts.
These outstanding balances will be written off and will be forwarded to a collection agency.
The cumulative write-offs shown by year as a percentage of total invoices billed, are as follow:
2006 Uncollectable Utility Account Write-Off
Detailed summary
Cumulative Write- Total $ invoiced Write-otts as a
otts Year to date % at sales
2006 $ 36,821.64 $ 85,006,000 0.0433%
2005 161,793.26 131,759,000 0.1228%
2004 201,052.86. 121,032,000 0.1661%
2003 367,423.75 114,083,000 0.3221 %
2002 453,127.57 106,576,000 0.4252%
2001 480,460.07 107,481,000 0.4470%
2000 445,758.46 88,188,000 0.5055%
1999 111,879.74 84,049,000 0.1331%
Total $2,258,317.35 $838,174,000 0.2694%
If you have any questions or concerns regarding any of these amounts to be written off, we
would be happy to address your concerns.
FINANCIAL IMPLICATIONS:
The cumulative total write off of $2,258,317.35, represents approximately 0.2694% of the total
utility billings of $838,174,000 for the period covered in the report. This is in line with the
recommended targeted upper level for write-offs of 0.3% in the Utility Collection Policy as
approved by Council.
Collection staff has focused their efforts on bringing the level of write-offs down to an acceptable
level as reflected in the results provided in this report. Staff will continue their efforts in
managing delinquent accounts to ensure that the write-offs are at a minimum.
CONCLUSION:
It has been determined that $86,382.37 of utility accounts is uncollectable and staff
recommends that the accounts be written off in 2006. The uncollectable accounts listing will be
forwarded to a collection agency, which will use their best efforts to collect these accounts.
Joyce V. Evans, CMO, MPA, FCGA
Director of Revenue
Pauline Houston, CA
General Manager of Financial
Services & City Treasurer