Council has since admitted a “potential issue” in the way the 2023-24 rates invoices were generated.
It now has an independent auditor combing through the rates system, however, the issue of rates debt has been on the council’s radar for a while.
At the August meeting, acting corporate services manager Chantel Mills presented a damming report.
At that stage, council had overdue rates from 2022-2023 totalling $811,584.
Council also had 152 rates debts owing $131,705 from prior to June this year.
In late June it had also handed over a further 357 ratepayers to a debt collector representing $301,886 in unpaid rates.
Mills said it was clear the council did not have a proper rates debt collection policy and change was needed.
“The rates officer has been in the role for almost four years and has no knowledge of such a policy existing and agreed it would be helpful for council to have one,” her report said in August.
Council had only recommenced active debt collection in June after putting it on hold during the Covid-19 period.
The papers for today’s meeting acknowledged the current rates accounts system is deficient - meaning council cannot justifiably backdate any rates arrears prior to the proposed start date of the new policy, on November 1.
The report said the new rates arrears options needed to be established and reviewed “on a case by case basis”.
Council would also need to allow for “historical issues” on previous invoices:
“It would be unjust to apply a debt collection process to these invoices,” the report by accounts receivable officer Evelyn Sefonte said.
The new policy would only “optimistically reduce” the debt problem.
However, adopting the new procedure would have “positive financial implications” for council, Sefonte said.
“This procedure gives the council a decisive guideline for unpaid debtor invoices and will in turn optimistically help reduce unpaid invoices.”
However, exploration was still needed into the current accounting system “and its reporting capabilities”.
In August, Mills told council it had systemic problems around its accounting.
“The transactional services team continue to be under considerable resourcing pressure and are working diligently to clear the backlog of unreconciled banking transactions,” she said at the time.
“The team understand that all banking transactions must be fully reconciled prior to the rating notices for 2023/24 (that) go out in mid-September to ensure balances outstanding on the rates notices are accurate.”
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