Spokane considering forgiving 14 years of unpaid utility bills they believe would be legally difficult to collect

Spokane is set to write off unpaid utility bills dating back two decades as the city looks to upgrade its payment software.

The proposal, which is set for a vote by the Spokane City Council on Monday, would forgive more than $450,000 in payments and late fees accrued by 174 ratepayers during the years 1999 to 2013. Those payments would be legally difficult to recoup, said Marlene Feist, acting director of communications and marketing for the city.

“We’re going to clean up the debt in this old system, and then going forward we would do this on an annual basis,” Feist said.

Non-payment of utilities, including charges for trash collection, sewer and water services, can result in late fees, liens placed on a property and termination of service, Feist said. The unpaid bills may also be sent to collections. But the debt that is being considered for forgiveness may have been incurred by businesses no longer located in the area, or residents who died or moved away.

Of the 174 accounts with unpaid balances, 116 are residential users, said Feist, and 122 of the accounts have debts that have been unpaid for a decade or longer.

Spokane City Councilwoman Candace Mumm, who has served as chair of the city’s Finance Committee, said she appreciates that the utility payments would be legally difficult to pursue. But she also wanted to make sure that city officials had done everything to secure payment before writing the debts off.

“I’m always wanting to know, have we asked, have we sent a letter from the city?” Mumm said. “I want to do everything we can possibly to do pursue getting paid back.”

Mumm received a listing from city officials of the 58 commercial accounts with outstanding balances. Those records include nearly $55,000 in unpaid water bills from West Terrace Golf LLC, a $25,000 sewer bill unpaid by Goodrich Sanitation, nearly $14,000 in unpaid sewer charges from Country Homes Septic and a nearly $12,000 water bill from Chelsea Investments LLC. All other outstanding charges totaled less than $10,000.

The amount that would be written off, pending council approval, represents a tiny fraction of the city’s collections annually for water, trash and sewer services. The city’s utilities department collects $17.6 million per month from ratepayers, and the amount the city is looking to write off over a 14-year period represents 2.5% of that monthly total.

Potential write-offs date to 1999 because that’s when the city last installed a new software system for its utility payments. The system has been tweaked since then, Feist said, but officials now want a more dynamic system that will provide City Hall a better idea of utility use and work more seamlessly with multiple online payment options, despite some continued insistence of paying a bill by check or in person.

“It just depends on what people are comfortable with,” Feist said. “We’d like to see more people go online.”

The City Council is scheduled to consider the debt forgiveness at its first legislative meeting of the year, Monday at 6 p.m. at City Hall, 808 W. Spokane Falls Blvd.