Half a million in bad debt wiped off the books
February 04, 2014 - 3:17 PM
"IT COULD LOOK LIKE WE'RE FOREGOING A WHOLE BUNCH OF FUNDS."
KELOWNA – Bad debts totalling more than half a million dollars were wiped from Kelowna’s books by City Council Monday.
The debts, some of which date back two decades, are made up of $111,000 in property taxes that were either mistakenly charged twice or where the company went out of business. A further $389,000 make up what city staff are calling “uncollectible general receivables."
Mayor Walter Gray called the debts “uncollectable” because “they cannot be dealt with using the regular tax recovery process.” They include manufactured homes that have been demolished or destroyed but continued to be taxed, properties occupied by First Nations members, bankrupt companies/individuals that owed the city money and other accounts that cannot be collected.
“Since 1989 there are nine occurrences where BC Assessment has continued to assess the mobile home even though it has been removed from the municipality or been demolished,” Revenue Manager George King says.
He says there are also several instances where members of First Nations neglected to inform the municipality of their status and were inappropriately taxed.
A significant amount of the debt, $124,392, are for monies owed to the airport and Glenmore landfill for things like unpaid landing fees and fees collected at the landfill, often as a result of bankruptcy.
Aside from questioning King on where the debts originated, councillors also asked why so much time has passed, perhaps making the amount seem larger than it really is.
“It’s a long period of time,” said Coun. Gail Given. “It could look like we’re foregoing a whole bunch of funds.”
King called most of the cases “unusual” and reminded councillors that the debts were actually marked off the books in the year they were initially found to be uncollectible and will not affect the city’s budget.
“There will be no impact on the budget for 2014 onward,” he says.
As well as the removal of the debts from the books, an endorsement for a policy that would require an annual review of bad debts was also passed unanimously by council Monday.
To contact the reporter for this story, email Adam Proskiw at firstname.lastname@example.org, call (250) 718-0428 or tweet @AdamProskiw.
News from © InfoTel News Ltd, 2014