Officials in Tucson, Ariz. have voted to erase nearly $10 million from the city's books.
The City Council unanimously agreed to write off 25,004 delinquent accounts totaling $9.8 million owed to the city. The accounts contained unpaid charges for property damage, code enforcement violation - as well as outstanding court fines and water bills. Court fines alone comprised $5.3 million of the total. Unpaid water bills totaled $3.9 million.
All of the accounts stem from November 2011 through October 2013. City officials use write-offs so they dont overstate in financial statements the amount of revenue Tucson expects to receive, according to city Finance Director Silvia Amparano.
But while the $9.8 million is gone from the citys financial statements, it doesnt mean the delinquent individuals are free and clear. Amparano said the accounts will still be pursued by the citys collection agencies.
The city has an estimated $177 million of outstanding debt listed with four agencies. Most of it ($157 million) is in the states program for collecting delinquent court fines and fees, which dont disappear after seven years like many of the other charges, Amparano added.
Last fiscal year, the citys collection agencies recovered $2.9 million. The city used to write off its uncollectible accounts every six months but switched to a two-year timeframe in 2011, hoping 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.
Tucson Mayor Jonathan Rothschild said the city needs to get a handle on the unpaid debts. He supports a focus on Tucson's Water Department amending its polices to make sure people pay a more upfront to keep the losses down. Recovering penalties on indigent defendants can be a difficult task, he added.
Councilman Steve Kozachik said the city's water department should stop returning deposits after one year and perhaps refund them only after customers end service to offer some protection against unpaid accounts. He also said each city department should know who owes what so those people cant seek additional city services or benefits until they pay up.