Council writes off developer's debt

By Lawrence Gullery

A trust connected to the late Ray Durney, a Hawke's Bay property developer, is among the debtors which owe money to the Hastings District Council, now to be written off as "unrecoverable debt".

There were 10 accounts totalling $11,676 owing to the council for the 2011-12 year.

The largest sum, $2600, was owed by the Te Aute Trust, for basement rental charges. The trust was set up by Mr Durney and it owned Heretaunga House until it sold the bulding to the council in 2008 for $4.85m. The trust continued to rent a room in the basement of the building but had failed to keep up with payments to its new owner, the council.

Six of Mr Durney's companies went into receivership, with debt reported to exceed $24 million, when he was made bankrupt in 2010. He was 78 when he died in September last year.

The council's finance and monitoring committee met yesterday and agreed to write off the latest unrecoverable debt figure.

The most common factor in unpaid debt related to six accounts which owed money for cemetery fees ranging from $470 to $2000, some invoiced in 2010.

Councillors agreed that while the $11,676 of unrecoverable debt was disappointing, it was an improvement on the 2010-11 year when 15 debtors owed $107,000.

The council's chief financial officer, Tony Gray, said in his report that council staff wrote letters and made telephone calls to warn "late-payers" that their debts would be passed over to a collection agency.

He said his report looked at "general debtors" and not outstanding debts owed through rates as the council had powers to recover the money under the Local Government Act.

When the "usual follow-up measures" were unsuccessful, the debt was lodged with Baycorp and often arrangements were made to pay off the money over time.

There are now measures in place to better track those who owe money.

The forms for buying burial plots and interment fees now request a drivers' licence or passport number.

"By including this information on the form, officers are able to track bad debtors down through Veda Advantage using Vedatrace," Mr Gray said.

Vedatrace is a database service used to track down debtors and late-payers.

Mr Gray was able to write off individual debts less than $400 but any higher figure needed the council's approval.

Money owed to the council which was 30 days overdue totalled $26,000 as of April 30. Money 60 days overdue totalled $55,000, and 90 days overdue added up to $245,000.

"Despite challenging economic times, the debtor-collection rate has improved," Mr Gray said.

Cemetery fees, development contributions, septage charges and service connections featured as the most common services for which debtors owed the council money over the past two years.

- Hawkes Bay Today

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