HomeMy WebLinkAboutFIN-10-023 - Utility Write Offl
FirrancialServicres
REPORT
Report To: Mayor Carl Zehr and Members of Council
Date of Meeting: February 22, 2010
Submitted By: Dan Chapman, General Manager of Financial Services
Prepared By: Joyce V. Evans, Director of Revenue (Ext. 2895)
Ward(s) Involved: All
Date of Report: February 16, 2010
Report No.: FIN-10-023
Subject: Uncollectable Utility Accounts Write Off
RECOMMENDATION:
That Uncollectable Utility Accounts, amounting to $52,909.16 be written
off against the Allowance for Doubtful Sundry Receivables and the
Allowance for Doubtful Utility Receivables.
BACKGROUND:
The last write off report for Uncollectable Utility Accounts was approved by Council in August
2009 totalling $113,994.64 and covered the period up to the end of June 2009. The current
report reflects uncollectable utility accounts totalling $52,909.16 for the period from 2007 to
December 31, 2009.
REPORT:
In May 2009 the revenue division implemented a collections module in CIS. The collections
module includes many automated tools for areas which had been managed manually in the
past. Examples of these tools are as follows:
1. Abring-forward system for various collections actions such as amount and age of
arrears, active or final billed account.
2. Collections notices and letters are now generated from the system rather than
manually.
3. The uncollectible write off list is now generated from CIS by the collections officers
rather than relying on the CIS consultant to generate this list.
4. A collections diary automatically tracks all collection activity on an account for a
specific period of time.
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5. Exemption queues such as a "To Do List" for accounts when certain conditions have
been detected. An example would be when unauthorized consumption has been
detected on a service which has been disconnected for non payment.
The introduction of the collections module has allowed the collections officers to work the
delinquent accounts in a more efficient manner. The current write off list is less than 50% of the
list which was presented to Council in June 2009, despite the current economic climate which may
increase the potential for uncollectible accounts.
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-offs at below the targeted upper limit as recommended by
Council.
The current report represents write off of utility accounts which have been deemed to be
uncollectable up to the end of December 2009. 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 follows:
2009 Uncollectable Utility Account Write-Off
Detailed summary
Cumulative Write-
offs Total $ invoiced
Year to date Write-offs as a
% of sales
2009 $105,996.61 $164,227,000 0.0645%
2008 151, 347.27 161, 658, 000 0.0936%
2007 151, 954.87 148, 670, 000 0.1022
2006 159, 001.94 136, 419, 000 0.1166%
Total $568, 300.69 $610, 974, 000 0.0930%
FINANCIAL IMPLICATIONS:
The cumulative total write off of $568,300.69 represents approximately 0.0930% of the total
utility billings of $610,974,000 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. Staff will continue their efforts in managing delinquent accounts to
ensure that the write-offs are at a minimum.
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CONCLUSION:
It has been determined that $52,909.16 of utility accounts are uncollectable and staff
recommends that the accounts be written off in December, 2009. The uncollectable accounts
listing will be forwarded to a collection agency, which will use their best efforts to collect these
accounts.
ACKNOWLEDGED BY: Dan Chapman, General Manager of Financial Services & City
Treasurer
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