City writes off bad debts

Published 8:00 pm Friday, August 18, 2017

Following a city ordinance, the City of Washington has wiped $338,741.53 in bad debts (more than five years old) off its financial books.

That action came during the City Council’s meeting Monday. About this time last year, the city wrote off $413,000.23 in bad debts for fiscal year 2016. For fiscal year 2015, the city wrote off nearly $437,000 in bad debts.

The city adopted the write-off policy in 2011.

As in previous years, uncollected fees for emergency medical services is at the top of the list of bad-debt write-offs for fiscal year 2016, according to a memorandum from Matt Rauschenbach, the city’s chief financial officer and administrative services director, to the mayor and City Council members. The city is writing off $211,898.23 in unpaid EMS debt for fiscal year 2017. Last year, the city wrote off $226,517.09 in unpaid EMS debt for fiscal year 2016.

The latest write-offs include $86,715.96 in unpaid electric bills, (down from $144,452.89 in unpaid utilities bills last year), $16,555.52 in unpaid sewer bills, $10,539.79 in unpaid water bills and $6,665.87 in unpaid sanitation charges. The latest write-offs also include $1,901.44 in property damage to city electrical equipment and $403.87 in miscellaneous bad debt, according to the memorandum.

“The EMS write-offs are consistent with past performance. Our collections represent 77 % and are consistent with the industry norm,” reads the memorandum. EMS write-offs will continue to be substantial in the future because of contractual allowances and expected collection rates, according to Rauschenbach.

The city’s EMS collections have increased from $350,000 to $712,000 a year since the city hired EMS Management Consultants to perform billing and collection duties in 2010, according to the memorandum.

Councilman Doug Mercer, as he’s done in previous years, expressed concern about the large write-offs of EMS and electric-service debts. Mercer asked Matt Rauschenbach “do we know how many of those actual accounts there are and if there are any of those accounts above a thousand dollars?”

Rauschenbach said, “We have a list of individual accounts. I don’t have those with me.”

Mercer said it make benefit the city to take large, unpaid debts to court in an effort to recoup the owed money.

The City Council has told city staff to take all actions possible when it comes to collecting money owed the city, including going to court.

The city uses multiple collection methods to obtain payment on the outstanding debts, but writes off those bad debts after certain criteria are met. After 10 years, unpaid assessments are written off. After five years, unpaid EMS charges, utilities charges, building-demolition charges and other fees and charges are removed from the city’s financial books.

Rauschenbach said the city’s decision to contract with EMS Management Consultants to collect EMS fees is paying off in the form on increased revenue for the city.

About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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