The City of Mount Vernon has passed a resolution to cancel bad debts that can no longer be collected.
The policy defines bad debt as one of three instances: uncollectable – there’s no correct contact information for the individual who owes the debt or they are deceased, stale – the debt has been around for 10 years or more without collecting any money on the debt, or insignificant – the debt is in the amount of $40 or less.
City administrator Chris Nosbisch explained that most of the bad debts the city is holding on to come from water and sewer bills, especially when people pass away and were not local.
“Families continually get these bills in the mail that weren’t written off when the person passed,” Nosbisch said. “That especially happens if their obituary wasn’t published locally.”
The City of Mount Vernon has not had a policy in place previously to write off bad debt.
Council member Scott Rose asked how large the issue currently is.
Nosbisch said that the city has some debts that have been in place for close to seven years, and this first use of the bad debt policy would be large, but moving forward the write-offs would happen on a more annual basis.
“Anything we write off will be presented to the council on an annual basis so you can see the amount of bad debt that is being forgiven,” Nosbisch said. “We have to keep the bad debt being forgiven documented for our auditing firm as well.”