Danville to recover debts with help of state

DANVILLE — Residents overdue on city garbage, water and sewer bills might want to pay up now, otherwise they risk losing any state income tax refund they might be owed next year.

Danville plans to join Champaign, Urbana, Oakwood and other Illinois communities taking advantage of a local debt recovery program through the Illinois comptroller's office that allows municipalities to recover outstanding debts by diverting any money the state might be sending the debtors, such as state income tax refunds.

The Danville City Council's public works committee discussed plans Tuesday night  for the city to start a local debt recovery program. Next week, the full council will consider the program. Champaign, Urbana and Oakwood have already approved the program that stems from a relatively new state law and requires an intergovernmental agreement between the municipalities and Illinois Comptroller Judy Baar Topinka's office. C-U and Oakwood will be among the first dozen to join the program.

David Wesner, corporate counsel for Danville, said the city is not limited as to what kind of debts could be recovered through the program. But, city administrators mostly want to focus on collecting delinquent water, garbage and sewer accounts. He said those make up a large portion of outstanding debts owed to the city.

If the council approves the debt recovery program, Wesner said, the city likely will go through a test phase first with a small number of delinquent accounts to ensure that the exchange of information between the city and state is working correctly. Eventually, the city would submit to the comptroller's office a file listing all the outstanding debts the city would like to collect.

According to the proposed intergovernmental agreement, the person who owes the money must be notified in writing prior to the state diverting any payments, and the debtor would have 60 days from that notice to file a protest. If a debtor has more than one local debt, the oldest debt will be pursued first.

And the program would be of no cost to the city, because the state would also divert a $15 fee per transaction to cover costs.

Wesner said all the city has to do is feed the comptroller's office information about the debtor and their debts and that office takes care of the rest.

"We don't have to go through a lot of leg work to get this recovered," he said.

But, it's difficult to know how much the city could recover through this method partly because the debt owed could be much more than what an individual might receive in a state tax refund. Wesner said over time, the city could eventually recover the entire debt.

Overall, the city is thankful the state comptroller's office has put the program in place to help cities collect debts, Wesner said, and Danville will take advantage of the program as best as it can.

"Any recovery is better than none," he said.

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