Time ripe to rethink ways councils generate revenue

For municipali­ties to function well, residents and businesses must pay for services

- By Miyelani Holeni ■ Holeni is the chief group advisor at Ntiyiso Consulting Group, whose mission is to empower institutio­ns that enable Africa’s developmen­t

Those of us who survived the deadly Covid-19 pandemic that stole two years of our existence, livelihood­s, savings and loved ones are still trying to get back on to our bearings and the respective trajectori­es we were on before the onslaught.

And while the world is gradually opening up, loadsheddi­ng and water-shedding have entered the fray in SA, causing untold damage to all business and households, and municipali­ties have not been spared.

As it stands, infrastruc­ture disrepair, backlogs and under-investment have prevented optimal revenue generation. And daily we are witnessing how the economy is severely battered by everrising interest rates, inflation and job losses.

All these elements have led to the cost of living rising, and this has resulted in many citizens finding themselves in a position where they cannot afford basic expenses; and this includes paying municipal service bills.

For local government stakeholde­rs, the time is ripe to relook at how income is generated from the communitie­s that are under severe financial strain, and how such income is appropriat­ed wisely.

Municipali­ties have to rethink how they price their services, how they measure their usage, how they bill and collect against those services, and lastly, how to exercise effective credit control and debt recovery methods.

Municipali­ties need to go back to the principles of revenue management and the value chain thereof with an understand­ing that a revenue division represents the business side of local government.

The revenue value chain is about achieving four goals that include predictabi­lity through management, completene­ss of revenue (through billing and collecting every rand), protection of revenue following defined processes and growth.

Perhaps the time to start thinking about how to integrate this value chain has arrived. The planning and designing of a dwelling is the first step in defining a revenue generation plan.

Municipali­ties have to master each of the revenue value chain components in order to achieve the set targets or thresholds.

For any municipali­ty to function, it needs residents to consistent­ly pay for the services they receive.

On revenue collection, the municipali­ties must consider several factors including an assessment of the Customer Relationsh­ip Management Policy, the municipali­ty’s strategic position on how it intends to develop better customer relations and to automate customer interactio­n to achieve better turnaround times.

Municipali­ties must realise cash-flows from billing customers accurately by implementi­ng billing integrity and quality assurance processes. This is evaluated by, among others, ensuring that all revenue lines items and all customers are billed every rand of consumptio­n every month.

They should also have the ability to efficientl­y generate income from a diverse pool of both available and innovative revenue sources to improve the revenue base.

It has to use revenue data science techniques to analyse complex volumes of municipal data to identify revenue leakages and discover opportunit­ies to increase revenue from existing and new sources.

In the context of revenue, data science is about utilising data analytics across all the phases of revenue collection and management to create dashboards that will indicate how revenue is generated.

Revenue management and increase require a scientific, entreprene­urial discipline to create, test and grow new revenue lines.

In addition, councils must employ more skilled revenue profession­als who are innovative and can apply systemsthi­nking approach to revenue generation, conversion and sustaining revenue.

Lastly, municipal officials must practice the highest levels of discipline when it comes to governance, to safeguard the expenditur­e of revenue including the grants under their care to meet the service delivery mandates and to develop infrastruc­ture that will support the growth of the local economy.

 ?? / ANTONIO MUCHAVE ?? If residents do not pay for services, municipali­ties will definitely not be able to provide services that they require.
/ ANTONIO MUCHAVE If residents do not pay for services, municipali­ties will definitely not be able to provide services that they require.

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