City owed R8bn in debt
‘Businesses simply refuse to pay’
THE CITY of Cape Town, which is set to increase water tariffs by as much as 50%, is already owed R8 billion in outstanding rates and taxes, of which R5.7bn is debt older than 90 days. In March, the Cape Argus reported that the total outstanding figure for rates and services owed to the City as at January 31 was R7.9bn.
Trevor Blake, the City’s director of revenue, and other senior officials yesterday presented the latest figures to the City’s portfolio committee on finance.
“The total outstanding figures for rates and services owed to the City as at March 31 is R8.421bn, which includes the current amount due but not yet payable. There has been an increase of R235 million (3%) in our total debt for March 2018 in comparison to February. The increase is as a result of an increase in current and 30 days debt for an amount of R128m and R111m respectively,” Blake said. He said the total amount of the arrears as at March was R5.775bn.
“An analysis was completed for the total debt in arrears, an increase of R77 698 870 was evident when compared to February due to an increase in the 120 days and 150 days older debt, amounting to R83 786 219 and R40 774 577 respectively,” he added.
Blake said the bulk of the debt in arrears fell within the group of debt greater than 150 days.
“The debt that falls within the group of 150 days and older forms part of the debt that will be written off through the indigent criteria and water leaks project. Although interest was written off on the properties referred to above, based on council resolution, it is important to note that no interest will be charged on the identified accounts until the above-mentioned process has been fully implemented,” he said.
Philip Bam, secretary of the Greater Civic Alliance, said the City should tackle big businesses which were not paying.
“It is in many cases not the residents who are struggling to pay. We find that big businesses simply refuse to pay. We cannot allow that to happen. It is shocking to see the City has so much debt. It’s clear that there are many residents who cannot afford to pay and this can lead to more homelessness and landless people,” he said.
Jenny McQueen, chairperson of the Green Point Ratepayers Association, said the City’s staff debt should also be addressed.
“There are some of the staff who think they are untouchable and don’t pay their accounts. We also see business and companies not paying their accounts but nothing happens. The City should investigate this and stop targeting the homeowners,” she said.
Janine Myburgh, president of the Cape Chamber of Commerce, said an assessment of how much of the debt was recoverable was needed. “All property rates, for instance, should be recoverable because the property is security for the debt. There is no doubt that more than a decade of above-inflation rates and tariff increases have hurt consumers badly, and many of them, especially the poor and pensioners, are struggling to pay,” she said.
Priority debt management actions will be instituted against the top 1 000 debtors, government departments, and councillor and staff arrears.
The top 1 000 large debtors comprise mostly commercial industrial properties and sectional-title developments.
There are 430 businesses on the list which owe the City more than R506m. A total of 565 residential users owe more than R441m and five sundries owe R4 782 806.
“A special plan of action has been drawn up for these properties, and final warning and disconnection and restriction notices will be sent to them,” Blake said.
The total debt outstanding for all staff is R16 683 896 – an increase of R2 901 789 when compared to February. “The total amount for staff arrears is R5 805 258, an increase of R1 552 977 compared with February, Blake said. The amount outstanding for government accounts as at March is R27 982 420. This includes the current amount due but not yet payable.