'Ignoring Debt is Not the Solution' - City of Cape Town

'Ignoring Debt is Not the Solution' - City of Cape Town

The income that the City receives from rates and services enables the delivery of top quality municipal services. The City therefore continues its focus on those who are able to pay, but refuse to do so, while at the same time offering assistance to those who are experiencing financial difficulties. Read more below:

In the current financial year, the City of Cape Town made close to R3 billion available to provide rates rebates and indigent relief to qualifying residents. The proposed funding earmarked for social assistance in the next financial year is currently being discussed as part of the budget process.

‘It is really important that we all contribute our fair share for services. Those who are in financial difficulties must approach us for relief. Hoping that the debt will go away or ignoring the problem is not the answer, and there is help on offer. As a caring City, we make allowance for residents who are unable to pay for basic services to make representation to the City for relief, and for those who are struggling to pay their municipal accounts to enter into an agreed arrangement/instalment plan to pay off their arrears.

‘If those who have the means to pay refuse to pay for services that they use, it has a marked impact on the sustainability of the City. It is vital that we instil a culture of payment. Residents need to acknowledge that while we all have rights, we all have responsibilities too. If any resident’s water is restricted, electricity supply disconnected, prepaid electricity purchases limited or if legal action is instituted against them, this is done as a last resort. This only occurs if residents have ignored all the notices sent to them and they have not made any attempt to obtain assistance from the City. We must continue to focus on financial resilience in order to continue providing services,’ said the City’s Mayoral Committee Member for Finance, Alderman Ian Neilson.

The City will continue enforcing payment of outstanding debts through effective debt management actions, which may include:

·         the restriction/disconnection of water/electricity services

·         the collection of all arrear debt through prepaid electricity purchases

·         property owners being handed over for adverse credit listing at the relevant credit bureaus

·         accounts being handed over for legal actions to the appointed attorneys to initiate legal recovery actions, which could lead to a sale in execution of the property to recover the municipal debts

During January, 14 203 letters of demand were sent out and 607 debtors were handed over for adverse credit listing. A total of 6 619 prepaid electricity blocking/daily charge collection letters were delivered and 136 accounts were sent for prepaid electricity purchases collection during January 2019. If the debt is still not settled, then these debtors will be handed over for legal action.

The City’s monthly payment ratio for January 2019 was 95,68% and the 12-month moving average payment ratio as at 31 January 2019 was 92,57%.

The total cash collected during January 2019 was approximately R2,5 billion, reflecting an increase of R365,7 million compared to that of January 2018. The total billings for January 2019 were approximately R2,8 billion, which reflects an increase of just over R151 million when a year-on-year comparison is done.

These are positive trends, but there is much room for improvement. A culture of payment must be instilled in all those who can afford to do so.  

If you know of someone who might potentially qualify for assistance, please direct them to visit: http://www.capetown.gov.za/local%20and%20communities/financial-relief-and-rebates/our-approach-to-financial-support/indigent-grants

The above was supplied by the Cape Town Media Office and distributed by Neighbourly.

Image Credit: Andrea Natali