TO: Indian River County Board of County Commissioners
THROUGH: John A. Titkanich, Jr., County Administrator
Sean C. Lieske, Director of Utility Services
FROM: Bryan Beavers, Utility Finance Manage
DATE: October 2, 2025
SUBJECT: Report Back of Utility Accounts Receivable Bad Debt Write Offs During Fiscal Year 2025
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BACKGROUND
On March 9, 2021, a public hearing took place that resulted in modifications to County Code Section 201.22 pertaining to payments and collections of certain utility bills. These modifications gave authorization to the Director of Utility Services to waive some, or all, penalties and interest on past-due utility accounts and to make payment arrangements for settlement of said accounts. Modifications to code also included language that provided staff with the authorization to seek final settlement, or ultimately foreclosure, for any accounts that remained unsettled.
ANALYSIS
During fiscal year 2025, the Indian River County Department of Utility Services (IRCDUS) completed settlement agreements for fifteen utility accounts that were very delinquent. These settlements resolved $426,106.29 of the accounts receivable balance. To induce these settlements, IRCDUS agreed to waive an estimated $355,014.06 of past due penalties and interest charges. Four of the fifteen settlements have completed all payment arrangements and are subject to a write-off of $75,640.41 in fiscal year 2025. Eleven of the fifteen settlements have payment arrangements ongoing, and the final write-off amount cannot be finalized until the payment arrangements are completed.
There are 228 active IRCDUS accounts that are 120 days or more past due. Presently, ten of the most delinquent accounts have been referred to our foreclosure attorney to process a foreclosure.
(See Delinquent Accounts table in attachments)
In summary, IRCDUS is requesting $75,640.41 of waived penalties and interest on completed settlement agreements be written off as bad debt.
BUDGETARY IMPACT
Funds in the total amount of $75,640.41 to cover the expenses for the fiscal year 2025 bad debt write-off will come from the Utilities/Cust Svc/Bad Debt-Water/Sewer account, number 47126536-036510, in the amount of $75,640.41, which is in the IRCDUS operating fund. IRCDUS operating funds are derived from water and sewer sales.
STAFF RECOMMENDATION
Recommended Action
Staff recommend that the Board of County Commissioners authorize staff to classify as bad debt expense the $75,640.41 in penalties and interest that were waived on the settled and completed accounts.