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City of Kelowna owed over $500,000 it will never get, say staff

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Unpaid debts totalling more than half a million dollars could be written off Monday by the City of Kelowna. Unpaid debts totalling more than half a million dollars could be written off Monday by the City of Kelowna.
City staff say there is no reasonable prospect of collecting on the debts - some of which date back several decades - and that it is a prudent accounting move to drop the accounts from the books.
Almost $400,000 of the debts relate to unpaid fees for various city services, while the rest is made up of never-paid property taxes.
"The periodic purging of delinquent, uncollectible general receivables is a fiscally responsible method to ensure an accurate position of the city's expected revenues," finance department official George King writes in a report to be considered at Monday's city council meeting.
Virtually all of the unpaid property taxes proposed to be written off are associated with a failed development on a portion of the Okanagan Indian band's reserve that's within the city's far northern boundary.
Under provincial law, property tax exemptions are granted for a property owner who has native status.
"As a result, staff are recommending that 10 properties totalling $94,889 be written off, as these properties were occupied by a person of native status and/or the company leasing the property went bankrupt or had no assets to collect on," King says.
Of the $390,000 in unpaid fees, about $30,000 of them relate to events before 1996. Since then, the annual amount of unpaid fees has averaged $20,000.
However, there was a dramatic spike in unpaid fees in 2009, the year after the onset of the recession, when the total jumped to more than $100,000.
About half of all the unpaid fees relate to real estate transactions, most of which are deemed to be uncollectible because those involved declared bankruptcy.
There are also $59,000 in uncollectible revenues associated with the Glenmore dump, many racked up by haulers that have gone out of business, and $67,000 that relate to the operation of Kelowna International Airport, some of which are unpaid landing fees owed by owners of private planes not based in Canada.

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