CITY OWED R8.9BN IN RATES AND SERVICES

Rates and services arrears reach an all-time high due to tariff charges

DEBT owed to the City by its customers have ballooned to a whopping R8.9 billion.

The City’s debt book analysis report for August shows that the total amount of the arrears as of August is R5.818bn.

The overall amount owed to the City for rates and services is R8.981bn.

These amounts include current amounts due, but not yet payable, and the R1bn debts charged on indigent properties, where the Water and Sanitation Department must repair identified water leaks, install water management devices, install prepaid electricity meters for the once-off debt write-off to be implemented.

The City’s revenue chief, Trevor Blake, said there had been an increase of R148 million (2%) in their total debt for August in comparison to July.

He was presenting these and other figures at a finance portfolio committee meeting yesterday.

“Largely as a result of the increase in billings and the implementation of the new tariffs, as well as the basic water and electricity charges billed to the debtors’ accounts.”

Blake said the water crisis had a huge impact on the collection ratio and the City’s debt.

“It must be noted that the City’s debt has increased significantly since the punitive tariffs were implemented.

“During August, the debt increased to R8.981bn as a result of the implementation of the new tariffs, as well as the basic water and electricity charges billed to the debtors’ accounts from July 1.”

Blake said a special plan of action has been drawn up for the top 1 000 consumers and final warning and disconnection notices have been sent to them.

The balance outstanding for the top 1 000 consumer debtors for August was just more than R1bn with 462 businesses owing the City R579m while 533 (of the top 1 000 consumers) are residential consumers who owe the City R462m while five sundries account for R4.8m.

“An analysis was completed for the total debt in arrears, an increase of R242m was evident when compared to July 2018 due to an increase of R71.9m and R173m in the 150 days and 150 days and older debt respectively.

“It must be noted that a total of R160m irrecoverable debt charged on indigent properties, was not written off or adjusted in the months of July and August, as a result of the current system enhancements these adjustments could not be processed during August, impacting on arrears debt outstanding.”