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Member Relations Corner: Got delinquent debt? Have I got a deal for you! 

by: Rob Shepherd, NCLM Manager of Member Relations and Education 

Hopefully by now you have heard about the Local Government Debt Setoff Clearinghouse program that the League of Municipalities and the Association of County Commissioners offers to members.  If not, very simply put, the Debt Setoff program recovers delinquent debts by offsetting debtors' NC state tax refunds and NC Education Lottery winnings. This program has been assisting local government with collecting delinquent debts since 2002, and since this time the program has collected and returned a total of $52.9 million to participating League members! 

Currently, only 283 of the League’s 543 member municipalities participate in the Debt Setoff program.  This means there are many more municipalities, as well as other entities such as Housing Authorities, Joint Regional Agencies, Metropolitan Sewerage Districts, Water & Sewer Districts, Sanitary Districts, that could be benefiting from this program.

So, what kind of debts does the Debt Setoff program collect, you may ask? 

Basically, any legal debt of $50 or more that is owed to your entity or a combination of smaller debts owed by the same individual when totaled equals $50 or more can be submitted.  The most common types of debts are as follows:  property taxes, utility bills, recreation fees, parking fines, returned check fees, sewer tap fees, water connection/reconnection fees, solid waste fees, special assessments, traffic citations, alarm fees, animal ordinance violation fees, code enforcement fines/fees, demolition fees, maintenance fees, inspection fees, environmental fees, EMS fees, and money that former employees may owe for lost/damaged uniforms and tools.

How much does the Debt Setoff program cost to participate? 

It’s absolutely free to League members!  However it will require some staff time, or as I like to call it “sweat equity”, to gather the information needed to submit it to the Debt Setoff program.   But we make it easier by providing your entity with free software, free training and free customer service support to administer the program.  And, for entities with 100 delinquent debts or less, the Debt Setoff Clearinghouse staff will enter your delinquent debts on your behalf because they want to make it as easy as possible for you to participate..  So, there is really no excuse not to participate in the program.

Now you may be asking yourself, how do I know if my entity is participating in this program? 

To find out you can simply ask your manager, administrator, finance officer or clerk.  If your municipality is not participating in the program, you have until December 31, 2014 to submit your paperwork to become eligible to collect delinquent debts during the 2015 calendar year. 

To find out more about this program, to enroll in the program or to ask any questions, please contact Melissa Smith on the League staff at (919)715-3927.  You may also visit the Local Government Debt Setoff Clearinghouse website at for more detailed information about the program as well as a listing of participating units and statistical information about the program.