The City of Joburg is getting tough on wealthy citizens who, for one reason or another, have not been paying their electricity bills.
The city’s credit management section – which deals with credit limits, acceptable levels of risk and terms of payment, as well as enforcement actions against customers – issued an internal memorandum last week instructing its customer interface team to begin disconnecting services to homes that owe the city money.
The memo instructs the customer interface department to pay particular attention to recouping funds from property owners who reside in houses with “a market value above R5 million” as per its municipal General Valuation Roll of 2018/19.
The email, which was sent on Wednesday by the director of credit management at the Revenue Shared Services Centre, Savuya Hansford, said: “The appeal is that we apply stringent measures when concluding acknowledgement of debt on these accounts, and only accept 50% down payment and a six-month payment on remainder arrear debt, or 30% deposit and three months on the remainder arrear debt. If these conditions cannot be met, the customer must provide six months’ stamped bank statements, upon which alteration arrangements can be made.”
This email, which was addressed to acting director of customer interface, Arthur Mbobo, instructed the customer interface team to begin disconnecting noncompliant households from this past Thursday.
City of Joburg member of the mayoral committee for finance, Jolidee Matongo, said: “The memorandum, leaked to the media over the weekend, created the impression that the city was targeting affluent areas in a drive to collect revenue. All customers – in any property category or value – are obligated to pay for their rates and municipal service fees.”
I would like to remind all customers that it is their responsibility to pay their municipal accounts in full and on time.
Matongo said that “the newly appointed government of local unity has by no means approved a targeted credit management process as it goes against not only legislation, but also the city’s own credit management policy”.
“It is a well-known fact that the city generates much of its revenue through the levying of rates and consumption charges. It would be disingenuous, and counterproductive to our development agenda, to choose to collect from only certain sectors of the Joburg community. Every property owner, irrespective of the value of their property, must honour their municipal debt.”
Matongo said the memo formed part of a broader strategy to deal with mounting debt in relation to residential rates and municipal services, and that this was the first phase “of a strategy aimed to reduce a growing debtors book”.
“I would like to remind all customers that it is their responsibility to pay their municipal accounts in full and on time. Customers who find themselves strained with escalating municipal debt are encouraged to visit one of our customer service centres across the city to make debt payment arrangements.”
He also indicated that any kind of transitional period required the building of trust and communication.
Matongo’s spokesperson, Kutlwano Olifant, said: “As the government of local unity takes the reins in Joburg, this is an area that Matongo is working on as he continues to visit Joburg’s customer service centres to engage staff on their challenges. After all, administrators and politicians should have one purpose – to serve the people of Johannesburg.”
Former Johannesburg mayor Herman Mashaba expressed outrage over the memorandum, saying: “Under my administration, there was never such differential treatment. It was never brought to my attention that there was a targeting of any particular class when it came to recouping finances owed.”
He added that, “as far as I know, if there is nonpayment of tariffs, then money should be collected from all noncomplying account holders, and not certain individuals based on the value of their property. It is shocking to hear [that the city is specifically targeting wealthier individuals] and it should not be the case.”
In November, the SA Local Government Association reported that, over the past year, R22.3 billion in debt was incurred by municipalities due to a lack of payment by households, government departments and businesses, and Matongo said it was time to crack down on all parties reneging on their payments.