Debt Collection and Billing Systems: Department and Municipality briefings

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Cooperative Governance and Traditional Affairs

13 June 2005
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Meeting Summary

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Meeting report

 

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
14 June 2005
DEBT COLLECTION AND BILLING SYSTEMS: DEPARTMENT AND MUNICIPALITY BRIEFINGS

Chairperson:
Ms R Bhengu (ANC)

Document handed out
Presentation by Department of Provincial and Local Government

SUMMARY
The Department of Provincial and Local Government outlined the structure of municipal services debt, the breakdown of debt owed per province, the efforts of the Department to address the debt and their future plans.

The City of Cape Town Metropole then outlined its billing system, measures to address water leaks, metre reading practices, its credit control and debt management policy, its indigents policy, projects aimed at cleaning up data, mechanisms to recover arrears and its customer care initiatives.

The Nelson Mandela Metropole further outlined its revenue collection policy and implementation plan; its IT system and billing system; its commitment to enforcing revenue collection, and the problems facing the municipality. The Ugu District Municipality also expressed its problem with abiding by the national norm that stipulated that if a person’s water supply was cut, they should live no less than 200 metres from the nearest water source. The Tswane Municipality indicated that a national policy was needed to ensure proper commitment with regard to debt collection and debt control.

The following matters were raised during the Members’ discussion:
- It was suggested that a breakdown of the category per type of municipality be provided by the Department;
- clarity was sought on the modelling solutions for debt collecting;
- the provision of six kilolitres of free water needed to be revisited as it was not sufficient;
- measures needed to be put in place by the municipalities to deal with irrecoverable debt;
- whether Councillors should play an active role in debt collection;
- the classification of an ‘indigent person’ had to be reconsidered because it focused on the income of the household and not on other socio-economic conditions;
- the effecacy and efficiency of the billing systems currently being used was questioned; and
- municipalities were asked to explain whether they were able to detect incorrect accounts timeously.

MINUTES

Chairperson’s introduction
The Chairperson stated that the aim of the meeting was to investigate the role of Credit Control Departments within the municipalities and to see whether, as evidenced in the case of Mr Mkhize’s home, municipalities were abdicating their debt collection responsibility to law firms.

Other problems included the supply channel of water and electricity to communities. There were cases in which communities bypassed the municipality’s systems by establishing their own illegal electricity connections. There were also cases of collaboration between citizens who failed to pay their electricity accounts and officials responsible for disconnecting electricity metres. She asked the municipalities present to indicate the extent of this problem, and how the municipalities and the Department were dealing with this problem. The municipalities present today must also indicate whether this Committee needed to do anything to assist in the eradication of these problems.

Department briefing
Mr Dan Manyindo, Department consultant in intergovernmental finance, outlined the structure of municipal services debt, the efforts of the Department in addressing the debt, and the way forward. Municipal debt hinged on the following: affordability, the level of services provided, and effective administration. The Gauteng, KwaZulu-Natal and the Western Cape provinces had the highest levels of debt.

City of Cape Town Metropole briefing
Mr Derek Harris, City Director of Revenue, stated that they had recently amalgamated seven local authorities to form the new City of Cape Town Metropole. There were some huge problems, as was common with any amalgamation of that nature. One of the first steps was the consolidation of the computer systems used by the former municipalities into a new centralised system, known as the SAP system. The Metropole was however experiencing some teething problems, but generally the transition was running smoothly.

Billing system
This was working reasonably well. There were a few areas that the Metropole was currently unable to bill, but the Metropole had projects underway to include them.

Water leaks
The Metropole was experiencing water leaks in certain areas, but those were in the process of being addressed.

Metre readings
These were fine and, as mentioned earlier, measures were being put in place to address areas that currently had no metres.

Credit control and debt management policy
This policy had been approved by the Metropole Council and only needed to be promulgated into a bylaw. This would be done in the very near future.

Indigent policy
The Metropole had a policy but did not currently have an indigent register, and it was addressing this problem. The Metropole was currently working on the basis of affidavits presented as proof of indigence. The Metropole was currently working with an outside company on an indigent register, and those listed would be double-checked on by the outside company. It was hoped that a draft would be on the table by the end of this month.

Cleaning up of data
Prior to the latest amalgamation, there had been an amalgamation of 39 local authorities into seven, and then from seven into a single authority. Cleanup work still needed to be done.

Arrears
The Metropole’s arrears currently stood at roughly R3.4 billion and its payment ratio stood at 98.37%. It was hoped that by the end of this calendar year, the ratio would be 100% when the indigent register was in place. The Metropole was constantly tackling the top 1 000 debtors, and a separate unit had been established to deal with problematic government accounts. The Metropole was currently still experiencing problems because some properties were still registered in the name of the former House of Representatives, House of Delegates etc.

Customer care
The Metropole was currently engaged in a ‘citizen relationship management drive’. This was aimed at replacing the existing fragmented system of providing a service to customers with a ‘one-stop shop’ where all accounts could be paid. He was unable to provide an indication of the progress of that programme to date. The Metropole’s payment facilities were not the problem as they were currently scattered throughout the municipality. They allowed accounts to be paid at banks, the Post Office, retail chainstores, etc.

Training and education of personnel regarding disputes with customers was ongoing. The customer care skills of his Department’s 1 000 personnel was being sharpened daily. All customers were treated the same, except for the indigent South Africans.

The Metropole was also dealing with its own personnel with rates in arrears, and most of them had made arrangements with the Metropole to settle those arrears. Another education drive would be conducted once the indigents were identified, and community participation drives would be launched. The Metropole would be writing to each indigent identified on the register, asking them to confirm their status. The Metropole would be using an outside agency to confirm this.

Nelson Mandela Metropole briefing
Mr Peet Van Rooy, Nelson Mandela Metropole Chief Financial Officer (CFO) agreed with the above analysis, and said a strategy needed to be devised to deal with these problems. He made a number of recommendations based on the experience of his Metropole.

Revenue collection
He proposed that this be dealt with by getting the revenue management and customer care bylaws into place, and having clear and executable policies. His Metropole had had to change its indigent policy to deal more appropriately with qualification based on property evaluation. An automatic qualification criterion should be put in place. This method had allowed his Metropole to register and supply free basic services to 88 000 of its households, which equated to about 38% of all its customers.

Revenue collection policies
After setting up the indigent policy, a clear policy would have to be put in place to deal with any rebates to pensioners, sporting bodies, farming activities etc, as well as a policy on deposits. The purpose of deposits was to supply working capital. A policy was needed to distinguish between indigent households, where a deposit for those households was not needed. A policy was also needed for normal residential properties, business properties as well as factories and industry, so that the municipality was not ‘caught short’.

A clear policy was further needed on staff arrears. The Code of Conduct was clear on this matter, as well as on the arrears of Councillors, but it needed to be contained in a policy. He proposed that this be negotiated through the labour unions and ultimately have the staff arrears deducted from monthly salaries.

The revenue collected from sporting bodies needed a policy, and a distinction had to be made between professional and non-professional sport. There was no reason to grant a rebate to professional sports generating profit, but it was up to the Council to consider the circumstances of each.

A clear policy should also be devised to deal with contractors of the municipality, which had to clearly state that the municipal accounts of those contractors should be fully paid up before they could do business. This had to be checked before the tender stage was reached.

Plan of execution
All these policies were useless if they were not activated by a plan of execution, that indicated the involvement of all departments, because revenue collection was far too often regarded as being a function of Treasury only.

Information Technology (IT) system and billing system
The problem arose with incorrect metre readings, water leakages not properly captured, and thus consumers disputing their high accounts. A policy had to be put in place to deal with this, especially for poor households. His Metropole had installed a policy that assisted its poor households to rectify the leakages on their properties. The policy had to clearly state that the municipality would intervene the moment when it detected a leakage. This would also require the co-operation of the other departments.

Commitment to enforce revenue collection
Even if all those policies were put in place, if there was no commitment from councillors and municipality staff to enforce revenue collection, the policies would not be successful. If staff were not properly trained, its commitment would not be fully effective. His Metropole had reduced its 14 000 outstanding queries in November 2003 to under the number of incoming queries per month, which resulted in his Metropole now only taking about three weeks to respond to a query. This had taken commitment and training for staff.

Problems facing the municipality
Even with all these measures in place, certain problems could become insurmountable if they were not dealt with properly. Indigent households were provided with six kilolitres of free water, and they had to pay for any amount consumed in excess of that limit. It was obviously very difficult for them to pay when their water accounts ran into thousands of Rands. Thus a clear method was needed to deal with the water leakages, especially in poor households.

The second problem was if the indigent policy was inadequate to deal with the total account of an indigent household. The municipality provided the basic rates, refuse and sewerage services, six kilolitres of water and 50 kilowatts of electricity free of charge. Yet if people operated on a credit electricity metre and they consumed in excess of 50 kilowatts, the municipality’s action was to disconnect the service. The solution was to have prepaid metres. These were reliable, and his Metropole’s policy stipulated that the indigent households would have to convert to the pre-paid metres if they wanted to qualify for basic electricity.

The six kilolitre water limit however remained a problem. If an indigent household consumed in excess of six kilolitres, they usually could not afford to pay for the excess. In certain instances, restrictors would be put in place to ensure those households did not exceed the six kilolitre limit. The municipality had to be proactive to ensure they curtailed their consumption to the six kilolitre limit and, if that limit was deemed insufficient, it needed to be further addressed.

His Metropole had not realised that the average water consumption in indigent households in its municipality far exceeded that limit, but it had not yet found a solution to that problem. Taking legal action against such households for the recovery of the debt was not an option, as the households’ monthly income would not be able to extinguish the debt.

Access to metres
Quite often municipal officials struggled to gain access to metres because they were hidden or covered. The bylaw clearly stated that the consumer had to ensure that the metre was accessible to the metre-reader. His Metropole had not yet been able to solve this problem.

Ugu District Municipality briefing
Ms Zanele Mkhize, Manager of Water Services Income, stated that her municipality shared many of the problems raised. They provided water to households and stand pipes. Her municipality experienced difficulty in abiding to the national norm that stipulated that if a person’s water supply was cut, they had to be at least 200 metres from the nearest water source. The problem was that the municipality was not able to install standpipes 200 metres away.

Tswane Municipality briefing
Ms M Tshoane, Manager for Revenue, agreed that a national policy was needed on debt collection and debt control. Tswane municipality did have approved bylaws on credit control but, due to political pressures, the municipality tended to be lenient when applying those policies. A total of 79% in arrears debts were outstanding from households, and arrears of R1.1 billion came from in the black townships.

Discussion
Mr P Smith (IFP) sought clarity on the "other" category, the second largest category of debt owed to municipalities, as indicated in the Department presentation.

Mr Manyindo responded that this varied from municipality to municipality. It was due to an inability to categorise structures either as a household or a business, or structures that faced zoning difficulties.

Mr Van Rooy stated that in his municipality, "other" related to debts that were not related to a specific core service provided by a municipality, but usually related to land sales, library charges or traffic fines. It thus usually referred to once-off charges.

Mr Smith sought identification of the top ten municipalities that had succeeded in turning around their debt collection situations over the last ten years, as well as those who were not doing well.

Mr Manyindo replied that these were ‘a mixed bag’. If the Department reported the municipalities that had improved in 2005, it was very likely that the picture would change two years down the line. This was due to the specific dynamic in each municipality.

Mr Elroy Paulus, COSATU Parliamentary Office, stated that the presentation by Department was very insightful, but suggested that a breakdown of the category per type of municipality would have been useful. This was important because the smaller municipalities were so much more dependent on a percentage of the equitable share and conditional grants and had little hope of addressing issues of indebtedness.

Mr Smith sought clarity on the modelling solutions for debt collection. Mr Manyindo responded that in the twelve municipalities evaluated, the Department had tried to develop working models that considered all issues across the billing system. These included infrastructure issues, process issues, system issues and customer relations. All these intricacies had not been envisaged prior to the amalgamation, and the Department had to now address the problems. Department proposed that they identify the municipalities with different demographic profiles, establish local models, and then use those models to resolve the issue country-wide.

Mr Smith stated that the six kilolitres was problematic for many Members of this Committee. He asked when the limit might be re-valued and possibly increased.

Mr Lance Veotse, SA Municipal Workers Union (SAMWU), replied that South Africa was the world leader in providing free water, and only this country’s Constitution enshrined the right to free water for health. SAMWU believed more free water needed to be provided. The World Health Organisation (WHO) standard was 50 litres per person per day. The six kilolitres currently provided in South Africa could be broken down into 25 litres per person per day in a household of eight. There was a difference with the six kilolitres provided in South Africa because in the rural areas, where there were no flush toilets for example, the six kilolitres would be used up far too quickly as three flushes of the toilet could use all six kilolitres.

COSATU believed a possible solution would be the introduction of a rising block tariff. The first block would be provided free of charge, and the second block would be a minimal amount of water, and from there a rapid rising block tariff would be used which meant that "the more you use, the more you pay". This would be able to cross-subsidise the provision of free water, especially for the poor.

The terminology used here was also important, such a using the term "customer" instead of "resident", because it created the impression that basic services such as water became a commodity. This further created the impression that "no money, no water or electricity", and this made it extremely difficult for the poor to be able to pay for such services.

SAMWU noted that some municipalities were installing the pre-paid water metre to recover costs. They were wary of the pre-paid metres because as soon as the free water quota was exhausted, the resident would end up begging for water.

Mr W Doman (DA) asked the municipalities to explain whether there was anything the Committee could do by way of legislation, to assist the municipalities. The current manner in which municipalities dealt with debt collection uanacceptably created the impression that they would tolerate failure to pay municipal bills. He asked the Department to explain against who the irrecoverable debt owed by those unable to pay for municipal services would be written off.

Mr Van Rooy responded that this was a very important issue. The figures quoted by Mr Manyindo included large amounts of irrecoverable debt, but the problem was how the irrecoverable debt was determined. A legal process was thus needed to make it clear that an amount could only be written off if it was irrecoverable. The Nelson Mandela Metropole had undertaken a door-to-door ‘data-cleansing survey’, because the amalgamation process indicated that some of the data and billing history was very outdated. This was due largely to the fact that citizens sold property among themselves without registering the sale properly, and thus the municipality’s records did not accurately reflect the true owners.

The Nelson Mandela municipality was in a fortunate position because it had built up a store of ‘doubtful’ debt reserves which it had used to extinguish its irrecoverable debt of R585 million. This amount equated to about 40% of the total amount of outstanding debt owed at the time.

Mr Veotse stated that the problem with water leaks also needed addressing. Khayelitsha municipality had established a water leaks project, was initiated by the community, and had sought the support of Cape Town City. The government had allocated a small amount of money to the residents and they were then able to own their houses. The difficulty was that the community did not realise that the rates had to be paid and that maintenance had to be done, with the result that nobody was fixing leaks. There was thus a serious need for training those communities so that they could fix the leaks themselves, rather than bringing in artisans from outside. Many argued that the private sector was the ‘saviour’ here, but SAMWU did not share this view.

The Extended Public Works Programme (EPWP) could assist here by, for example, locating water metres, exposing valves, ensuring proper and visible street names etc. Policy was in place to deal with this but the implementation through local authorities was problematic. Much focus had been being placed on the indigent consumers of water, but no mention had been made of efforts to ensure that the largest consumers of water paid their bills.

Mr Paulus stated that COSATU was of the view that the outsourcing of services, particularly via Public Private Partnerships (PPP), was increasingly problematic. Instead Public Public Partnerships should be employed where community and workers could co-operate in providing services. Their work would then be used as a means to pay back for the services.

Furthermore, local economic development was a crucial Department mandate, and partly explained why they were reluctant to collect revenue as vehemently from businesses. He questioned whether there was a fear that ‘cracking the whip’ would discourage future investment. The current arrangement discouraged local economic development.

Ms Tshoane stated that Tswane municipality was very strict in recovering debt from businesses.

Ms Sophy Molokoane-Machika of the SA Local Government Association (SALGA), stated that these debts fell into two categories: firstly, the debts owed by members of the community to the municipality, and the second related to the debts that the municipality itself owed third parties. With regard to customer care, not all municipalities had established customer care centres. Some had however put measures in place to ensure that queries were addressed, together with timeframes for resolution. This procedure had been workshopped with communities.

Ms Tshoane stated that her municipality had written off the arrears of indigents, thinking that they should not be burdened with old debt when they got new employment.

Mr S Mshudulu (ANC) stated that the computer systems within municipalities needed to be upgraded, and municipal personnel had to be adequately trained in collaboration with the State Information Technology Agency (SITA).

Ms Molokoane-Machika replied that IT was a very serious problem. During the transition period, efforts were being made to ensure the operation of at least one comprehensive IT system that would ensure effective billing operations and revenue raising mechanisms. The many changes also resulted in lack of staff commitment.

Mr Mshudulu reminded the municipalities that the Municipal Systems Act was enacted to ensure the Constitutional principles were employed. They needed to report whether Section 95 on various aspects of credit control, was being followed. Secondly, he asked whether any policy existed to deal with the problems identified by the municipalities. Thirdly, a policy stipulated that government employees in the former Transkei Bophuthatswana Venda Ciskei (TBVC) states, did not have to pay for municipal services. This could not be tolerated.

Fourthly, Mr Mshudulu asked the Department to indicate its monitoring mechanisms to ensure the provision of basic services by municipalities. In the past, a lack of capacity had always been used as an excuse.

Mr Doman asked the municipalities to indicate the role it foresaw for councillors. He was very much in favour of councillors taking the lead in the indigent communities because they knew their areas very well.

Mr Manyindo replied that lack of capacity was one issue, as were lack of equipment and provision of guidelines. In 2001, national guidelines had been issued to municipalities on the way to deal with indigent households. The Department had conducted a follow-up survey in 2004 to gauge how municipalities were implementing those guidelines. It painted a mixed picture. The larger, more capacitated municipalities were experiencing the same problems as the small municipalities. The guidelines could not be static because the dynamic in the municipality changed constantly. This would be achieved by properly training municipal staff, by making it a crucial aspect of municipal management, and by involving communities and even Councilors.

If a member of a community experienced trouble with municipal administration (for example, receiving incorrect statements) and the Councilor was unable to assist that person in rectifying the error, what else could the Councilor do other than to instruct the person not to pay until the issue was resolved?

Mr Van Rooy stated that Councilors could not be expected to perform the debt collection function of the municipality. However, the support of the Councilor was necessary for the community participation process. There was no harm in the municipality submitting a list to the ward Councilor containing the names of people it intended taking legal action against for debt arrears. The the Nelson Mandela municipality had learned that it was futile to wait for the Councilor to get back to the municipality with the actual address of the person. It was for that reason that the municipality got the Councilor to change the policy to now reflect that the collection of debt vested with the Treasury.

He stated that in the year 2001/02 his municipality had collected 89% of funds owed. Its target for the current financial year stood at 93%, but the municipality had to date collected 95% of the debts owed to it. This bore testimony to the success of the efforts made by the municipality to address the problems.

Mr Veotse stated that the use of pre-paid water metres allowed the Councilors to abdicate their responsibilities. They had been banned in the United Kingdom because it disconnected water services. In Cape Town, the views of organised labour have not been taken into account with the provision of the Regional Electricity Distributors (RED), even though it was a requirement of the legislation.

Ms Tshoane explained that Tswane was totally different to Nelson Mandela Metropole as it was currently devising a debt collection policy that centred on its Councilors. The aim was to identify those wards that struggled to pay their debts, and the Councilors would then play an active role in ensuring arrears were collected.

The Chairperson asked the Department to indicate the international standards with regard to the provision of free basic water, and whether the South African norm of six kilolitres compared favourably. Research would have to be conducted to indicate the international benchmark, and the results of the research would be made available to the Committee.

The Chairperson asked whether the free six kilolitres was available to all, or only to indigents. Secondly, the Chairperson sought clarity on the impact of HIV/AIDS on the provision of the six kilolitres of free water. She knew from personal experience that a person living with HIV/AIDS required much more water.

Thirdly, the Chairperson sought clarity as to how an indigent person was defined. She asked whether the sole determining factor was the income of the household, or whether their social and health condition was also considered. Surely all child-headed households would also fall into that category?

Mr Manyindo replied that unless government was willing to investigate the true circumstances for poor communities, it would continuously miss the mark in providing services. It appeared that it was the poor who suffered most from ‘administrative mishaps’.

Mr Veotse stated that SAMWU believed that the manner in which the municipalities were determining an indigent person was ‘demonising’ the poor. In Hermanus for example, people with a television, fridge and stove were not considered ‘indigent’ by the municipality. The fact of the matter was that those appliances could have been gifts, which meant that the person was disqualified as an indigent.

Mr Paulus stated that there was a pre-occupation with the indigent, which could lead to the interpretation that indigents were the sole source of municipal indebtedness. Debts were owed by 16% of businesses in municipalities and there was too much leniency in dealing with this indebtedness. COSATU had been part of the task team on the National Credit Bill and ensured that the Bill included a provision which stipulated that any amount more than double the principle amount should be written off, thus erradicating the huge interest rates.

He continued that even progressive municipalities were ‘between a rock and a hard place’ in rendering services. There were many initiatives that related to Section 120 of the Municipal Systems Act, but COSATU’s concern was that the vertical split or division between the provincial grants and equitable shares and 284 municipalities were insufficient. It was high time that the municipalities informed National Treasury, as the Finance and Fiscal Commission had done, that the allocations were simply insufficient.

Ms Molokoane-Machika stated that SALGA had learnt that municipalities had their own differing indigent policies. It had come across one policy which stated that the municipal official who signed off on fraudulent payments to a person who was not really an indigent, would be charged with fraud themselves. This would allow government to monitor whether the indigent policy was in fact impacting the intended beneficiaries.

Mr D Mthalane of the SA National Civics Organisation (SANCO) stated that many municipalities did not have an indigent policy in place. Community participation was very important to increase awareness. SANCO had found that in many cases, Councilors were not helpful at all and could not be relied on to accurately communicate with the community. SALGA had to address this problem.

The Chairperson was no pleased with the manner in which the media portrayed the cases of those Members of Parliament who did not pay municipal rates, as it created the impression that they refused to pay. The fact was that since she became a Member of Parliament in 1999, she has not received a single municipal account. She was a willing payer should she receive a statement. The reporter responsible for that media report should have conducted thorough research before publishing the article.

Secondly, the Chairperson questioned the effectiveness and efficiency of the billing systems used. For example, a Member of Cabinet who resided in KwaZulu Natal had reported receiving three statements in the same month and the municipality had been unable to correct the matter timeously. She questioned the ability of the municipality to detect such faults.

Mr Manyindo responded that no municipality could claim that their billing system was free of challenges. The Department had learnt from its interactions with some of the operators of the billing systems in the municipalities. The latter had informed Department that when they came across metre readings that did not appear right, they compiled an exception report that they forwarded to the municipality. It was then up to the municipality to check those and to correct the irregularity before an account was sent out. The point was that if that correction function was not properly organised, the exception report was futile and incorrect accounts would be issued. There were detection mechanisms in place, and effective administration was vital.

Mr Paulus stated that National Treasury’s absence from today’s meeting was significant. On previous occasions, such as when the Division of Revenue Act was tabled before Parliament’s Finance Committee, some very important changes to the equitable share and calculation of the conditional grants were effected by Treasury despite objections raised and legal opinion tabled by the Financial and Fiscal Commission (FFC) and the Members of Parliament. The objection was that National Treasury had moved away from including the provision of free basic services as part of the formula. COSATU was concerned about increasing discretion in the allocation of resources for the roll out of free basic services. National Treasury claimed that this was due to a lack of credible municipal data.

Ms Molokoane-Machika stated that communities were being included in the Integrated Development Programme (IDP) and budget processes. To deal with the Auditor-General’s report on problems with municipal billing and revenue raising systems, SALGA had established district financial area forums that would comprise the CFO and other financial subordinates. The aim was to improve financial management and awareness on financial issues. The forums would report to the Councilors on a quarterly basis

SALGA proposed that Department devise regulations and guidelines on municipal debt collection measures, especially when dealing with the transfer of basic services to the real owner of the property. Secondly, a possible amendment to Section 11a of the Municipal Systems Act should be considered. Thirdly, municipalities should acquire a billing system that allowed for consolidation of all services, and to explain how the debt had been acquired. Thirdly, municipalities had to consider building capacity of debt collection staff. Fourthly, the possible amendment of the provision in the Schedule to the Municipal Systems Act had to be considered. This currently dealt with staff and Councilors not being allowed to owe municipal debts for two months, and should be expanded to include all government employees and politicians.

Mr Mthalane agreed that a consolidated billing system was needed. Municipalities had credit control as well as legal departments, but SANCO has found that municipalities often simply handed the defaulting person to law firms to recover the debt, as was the case with Mr Mkhize. The law firms were not ‘customer-friendly’.

An additional problem was the "thumbsuck metre reading", as the practice by some municipalities to guage an average was not tolerable. There was no reason for them not to read the metres where these existed. Furthermore, the six kilolitre limit should be reconsidered.

Concluding remarks
The Chairperson felt municipality success stories had to be identified so that the positive and good lessons learnt and measures put in place could be shared. Communities and organised labour had to be consulted, as enshrined in the Municipal Systems Act. Debt collection mechanisms of the municipalities had to be considered further, especially as many seemed to abdicate responsibility to law firms. The policy guidelines for indigents had to be revisited to be more inclusive of socio-economic conditions, such as the health conditions in the area, employment status, size of household, etc.

Ms L Mashiane (ANC) requested that the current ordinances also be revisited, as many conflicted with the Constitution. Secondly, she asked whether prepaid electricity boxes could be installed in indigent communities. Thirdly, this Committee needed to meet with Treasury on their relationship with municipalities, because there did not appear to be a uniform way of dealing with the new municipal billing systems

The meeting was adjourned.

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