BUSINESS SERVICES
DOCUMENT NUMBER CORP – 04
DOCUMENT TITLE
DEBT RECOVERY POLICY
DATE CHANGE BY APPROVED REVIEW
09/04/2001 Initial Issue GMCC Council 30/05/2003
12/05/2003 Review Revenue Co-Ordinator Council 30/05/2005 03/02/2004 Variation Revenue Co-Ordinator Council 30/05/2005
14/06/2005 Variation GMCS Council 30/05/2008
11/12/2006 Variation Revenue Co-Ordinator Council 31/12/2009
TABLE OF CONTENTS
1.0
SUMMARY ... 1
2.0
BACKGROUND ... 1
3.0
RECOVERY OF RATES & CHARGES & OTHER DEBTORS ... 1
3.1 RECOVERY PROCESS FOR RATES & CHARGES ...1
3.2 RECOVERY PROCESS FOR SUNDRY DEBTORS ...2
1.0 SUMMARY
Policy relating to debt recovery for outstanding rates and charges, and other debtors.
2.0 BACKGROUND
At its meeting in June 2005, Council adopted a revised Debt Recovery Policy. In accordance with the Key Strategic Activities of the Council Plan 2009-2013, a review of Council;’s Debt Collection Policy is to be undertaken by 31 December 2009. The Council Plan requires maintaining high standards of financial stewardship and internal control.
3.0
RECOVERY OF RATES & CHARGES & OTHER DEBTORS
To achieve the abovementioned Key Strategic Activities, it is recommended the following be Council’s recovery process:3.1 RECOVERY PROCESS FOR RATES & CHARGES
• Letters will be forwarded to ratepayers who are in default of two or more instalments, indicating that the full amount of rates and charges is now due and payable. If appropriate, suitable payment arrangements will be made with Council officers in order to clear the debt. Advice about appropriate financial counselling services will be provided if requested by debtors.
• Should a property be occupied by persons other than the owner, then all notices will be served on both the owner and the occupier if known. If the occupier is not known, then correspondence will be addressed to the occupier.
• If no response is received within 14 days, a letter from Council’s debt collection agency will be forwarded advising that legal steps may be taken for recovery of the full rate debt.
• Debt recovery involving legal action will be put in place in accordance with this Policy.
• If the cost of issuing a summons is less than the total debt outstanding, a summons will be issued for recovery of the total debt including interest and any costs incurred by Council.
• If a summons has been issued against a ratepayer in the previous year, then any future summons will only be issued if the debtor is in arrears of two or more instalments of the current year’s rates and charges.
• Should the issue of a summons fail to finalise a debt, Council will obtain judgement and where necessary continue the available legal processes to recoup all monies owed to Council.
• The General Manager Business Services, Finance Manager or the Revenue Co-Ordinator will be authorised to extend the time for payment if, in their opinion, the ratepayer is experiencing financial difficulties. If a request is made to defer the rates and charges as a charge against the property, application must be made to Council in writing in accordance with the Financial Hardship Guidelines. Any such requests will be reviewed by the General Manager Business Services and the Revenue Co-Ordinator.
• Should a ratepayer own more than one property, then the total value of all the debts will be used when ascertaining if such properties meet the criteria to continue legal steps for recovery.
• If proven that a debtor has the ability to pay the debt and fails to do so, then provided the requirements of Section 181 of the Local Government Act, 1989 are met, the General Manager Business Services will prepare a report for Council recommending that the property be sold for recovery.
• In relation to the sale of land for recovery of outstanding debts, a report must be prepared by the General Manager Business Services advising Council of its intention to do so. Prior to any report being presented to Council, all available options such as agreements and correspondence, as well as legal requirements under Section 181 of the Local Government Act, 1989 must be met.
3.2 RECOVERY PROCESS FOR SUNDRY DEBTORS
In accordance with this Policy and having exhausted all appropriate internal debt recovery process, the Finance Manager may initiate the following process:
• If a sundry debtor account remains outstanding for greater than 60 days, interest may be applied in accordance with Section 227 of the Local Government Act, 1989.
• With the exception of continuous service debtors, e.g. Family Day Care, if a debtor has an outstanding account greater than 30 days, a final letter of demand will be forwarded threatening legal action for all debts greater than $30.00.
• If, after the service of monthly accounts on the debtor for a three month period the debt remains unpaid, then the Finance Manager will be authorised to write off all debts under $500.00 if that Officer is of the opinion the debt appears to be uncollectable.
• If in response to the letter of demand the debt is not paid within 30 days, all such accounts will be placed in the hands of Council’s Debt
pursue, the General Manager Business Services will be authorised to write off all debts up to $1,000.00 and submit a list of same to Council for its information.
• If in the opinion of the Debt Collection Agency or the General Manager Business Services, the debt recovery process is not economically practical, or the debt appears to be uncollectable, a list of all debts over $1,000.00 will be submitted to Council to approve the writing off of such debts.
• The General Manager Business Services or the Finance Manager will be authorised to extend the time for payment, by up to 3 months if, in their opinion, the debtor is experiencing financial difficulties.
