Town writes off bad debts

Here’s whats happened at Town Council October 15th worksession:

Front Royal Town Council was requested to approve the removal of seven years or older of outstanding accounts receivable (bad debts) on the Town’s ledger in the amount of $166,191 from enterprise and general fund liability accounts. This value includes 358 utility accounts. All recourse of attempting to collect these amounts has been completed.

The Town’s staff recommends to follow the Town’s bad debt write off policy that was adopted in 2013 perrequest of the Town’s auditors Mitchell & Company.

Town staff has determined that the accounts presented meet the criteria for uncollectible as determined by the Town’s bad debt write off policy:

1) No activity on closed account for at least 7 years
2) Account has entered a status of “bankruptcy” with no activity for 5 years
3) All other methods of collection have been exhausted

The amount of bad debt approved to be removed by Council continues to decrease:
Dec 2013 – $848,191 – approved for removal
Dec 2014 – $144,049 – approved for removal
Feb 2016 – $225,318 – approved for removal
Feb 2017 – $203,808 – approved for removal
Nov 2017 – $175,999 – approved for removal
Oct 2018 – $166,191- requesting approval to be removed

The FY19 budgeted revenue for the sales of electric, water, sewer, & refuse totals approximately $30.8
million. The amount of $166,191 represents approximately 0.5% of the budgeted sales.

Download list of write off  debts.