The Spokane Valley City Council on Tuesday granted city officials the authority to write off $7,254 in unpaid bills owed by builders for work in the city’s planning and engineering divisions.
At issue are 31 accounts from the city’s first three years in business deemed unlikely to be collected or that may not be owed at all.
“There becomes a point at which I guess it doesn’t become cost effective to pursue it,” Mayor Diana Wilhite said Monday.
“If the records weren’t clear, then it takes more time than the amount we’d have to collect,” would be worth, she said.
After the city incorporated, it charged a flat fee for some permits related to development, plus an additional fee for work that took more than three hours of city engineers’ time.
Collecting that extra charge became difficult because regularly it wasn’t clear who to send the bill to if a developer, an engineer, a property owner and others were involved in a project, said Finance Director Ken Thompson.
While some people told the city the bill was sent to the wrong place, others contested whether the money was even owed.
City records did not provide adequate information on the work performed by the city or the responsible party, according to a report prepared for the City Council.
In some cases, someone other than the person billed paid it, but the debt remained on the books. Or, for example, a check would come in to the city for “engineering work” that wasn’t matched up with the specific charge, Thompson said.
Confounding the issue further, several people working in the city’s planning and finance departments have left the city.
“There really isn’t anybody to go back to and say ‘How did you remember this?’ ” Thompson said.
Most of the delinquent accounts were worth less than $100, with nine between $300 and $750, according to the report.
When asked for the list of delinquent accounts, Thompson said he was reluctant to release it because many on the list might not actually owe the city money.
The council gave unanimous approval to the policy change that now allows the finance director to go through the accounts individually and write off bad debts less than $5,000, if it is unlikely the money will be collected.
Amounts up to $10,000 can be written off with the approval of the city manager, and canceling debts greater than that will require City Council approval.
In 2006, the city increased its fees and began collecting them in full before work on engineering or right-of-way permits begins, eliminating the billing problem associated with the delinquent accounts.