Tucson wiped about $10 million off its books Tuesday night.
The City Council voted unanimously to write off 25,004 delinquent accounts representing $9.8 million owed to the city as uncollectible.
City officials use write-offs so they don’t overstate the amount of revenue Tucson expects to receive in its financial statements, said city Finance Director Silvia Amparano.
This year’s write-off included accounts stemming from November 2011 through October 2013.
While the various accounts contained unpaid charges for property damage, code enforcement violations and more, most of the dollar amount came from outstanding court fines and Tucson Water bills.
Court fines alone comprised $5.3 million of this year’s write-off. Unpaid water bills constituted $3.9 million.
Amparano said Tucson Water’s write-off represented less than 1 percent of what it collects each year.
Missing from the write-off were Tucson Fire Department charges for medical transports. The department didn’t submit any write-offs this time because supervisory changes delayed the reporting.
In the past, the department has written off amounts ranging from $200,000 to $1 million for a six-month period.
Reasons for the unpaid bills vary from death and bankruptcies to people leaving town without settling their debts.
Mayor Jonathan Rothschild said the city needs to get a handle on these unpaid debts. Rothschild said recouping penalties on indigent defendants could be a difficult task. He preferred to focus on Tucson Water amending its polices to ensure people pay a little more upfront to keep the losses down.
Councilman Steve Kozachik said every city department should know who owes what to the city so those people can’t seek additional city services or benefits until they pay up.
He also said Tucson Water should stop returning deposits after one year and possibly refund them once customers end service to offer some protection against unpaid accounts.
STILL CHASED DOWN
Even though the $9.8 million is stricken from the city’s financial statements, it doesn’t mean the delinquent account holders are off the hook.
Amparano said the accounts will still be pursued by the city’s collection agencies.
The city used to write off its uncollectible accounts every six months. It switched to a two-year period back in 2011 in the hopes the extra time would result in fewer accounts being written off.
Amparano said the city also shortened the time it refers an outstanding bill to a collection agency from 120 days to between 60 and 90 days.
The city has about $177 million of outstanding debt listed with four credit agencies. Most of it ($157 million) sits in the state’s program for collecting delinquent court fines and fees, which don’t disappear after seven years like many of the other charges, Amparano said.
Last fiscal year, the city’s collection agencies recovered $2.9 million.
From July to November this year, they have collected $471,664. Amparano said, on average, the state program successfully collects on 38 percent of the city’s delinquent accounts. The other collection agencies’ success rates are about 25 to 30 percent.