City seeks to recoup losses from failed businesses

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By Alice Du Pont

Just how much of a deposit will the county be required to pay to have utilities turned on when the hospital is finished in June? There was no definitive answer, but the Quincy City Commission is looking seriously at how to insure they get at least part of the money owed them when businesses file bankruptcy. When the hospital closed in November 2005, the city of Quincy was owed more than $100,000 in past-due bills.

The bills never got paid because the company that managed the hospital, Ashford Healthcare Inc., filed bankruptcy. The city of Quincy had to stand in line behind other creditors to recoup some of its money. To date, no funds have been collected.

"We're going to have to go back in and look at raising these deposits," City Manager Jack McLean said. Higdon Furniture Company has also filed bankruptcy and left behind a high utility bill. Between the two, McLean said, $155,000 is considered uncollectable.

When Winn-Dixie filed bankruptcy, the company owed the city approximately $32,000. McLean said the company offered the city stocks as partial payment, which was accepted by the city.

"Some of those stocks have been sold and we're been able to recoup some of our money," McLean said. He explained that Childers Construction, which is renovating the hospital, is currently paying the bill. But when the hospital reopens, the county will be responsible for the bills.

"We need to inform the county in advance and make sure we get some sort of security deposit," said Finley Cook, city commissioner.

"We needed a policy to address utility accounts which remain unpaid for a period of time. The finance and customer service departments got together to develop a policy to address these accounts," said McLean.

The policy will specifically address active accounts that are 90 days in arears, final accounts and bankruptcy accounts. Final accounts, those that have stopped receiving city services, have averaged approximately $155,000 annually. While some customers pay their accounts when service is disconnected, others simply walk away from their bills.

"Those delinquent accounts have been turned over to a collection agency," said Ann Sherman, director of customer service.

In the future, businesses that have been delinquent or that have filed for bankruptcy will be asked to pay higher deposits that could reach into triple figures. The amount of the deposits may depend upon the amount owed when the accounts were 60 to 90 days delinquent.