BENDIGO's council has been forced to write off an unanticipated $62,000 in bad debts so far this year.
The costs have soaked up all funds set aside to cover debts the council could no longer chase, according to a report to go before councillors on Wednesday night.
The council will have to tap into other parts of the budget to cover any extra debts that fall through, corporate performance director Andrew Cooney says.
The council had set aside $225,000 dollars for the entire financial year but after nine months was $5000 over-budget, the report showed.
The shortfall has grown every financial quarter so far. It was $9000 in September and $46,000 in December, according to previous quarterly reports submitted to councillors.
The March quarter's spike came when two food premises went under, Mr Cooney said. The council had been chasing them through the courts for failures to comply with the food act.
Getting money back from people through the Magistrate's court was not always possible, Mr Cooney said.
"For a business to get to the point that they've got non-compliances with the food act, there's normally a few alarm bells and a few things going wrong," Mr Cooney said.
"So it's not uncommon that when they get to the point (the courts) award costs against them, they go into some sort of voluntary administration.
"It means it's very unlikely we will get the money."
More council news:
In an ideal world the council would not have to set any money aside for bad debts, Mr Cooney said.
"On a budget the size of ours it's normal practice that we will get some element of bad debt," he said.
It was impossible to tell when debts would fall through and the council had to decide how far to pursue them on a case-by-case basis, Mr Cooney said.
The council might have to write of an extra $9000 by the end of June, according to council's forecast.
However, that was not likely. The June forecast was based on historical data, Mr Cooney said.
"I don't believe we have any other court matters coming our way, or other amounts we will need to write off," Mr Cooney said.
Either way, the council would be able to absorb this year's extra costs, he said.
In the March quarter the council reported a $40.3 million surplus.
That was $16.5 million ahead of where the council expected it would be in the 2019/2020 budget.
Have you signed up to the Bendigo Advertiser's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in central Victoria.
Sign up for our newsletter to stay up to date.