Double standards on debt
LAST Thursday, the same day Ndlambe municipality wrote off a huge chunk of what it considers unrecoverable debt, the Ndlambe Action Group (Nag) met to discuss the municipality's lawsuit against Nag chairman Derek Victor to recover about R1 000 in withheld rates.
Outstanding arrears owed to the municipality have been hovering around R100-million for the past two years, and the finance directorate's inability to make a dent in it has been an embarrassing albatross around its neck. Last week finance director Howard Dredge lightened the burden a bit by getting exco to do what he has wanted for some time, diminishing the debt by simply writing it off.
The lion's share of the write-off, R24,5-million, is what Dredge called "unrecoverable indigent debt”, years worth of unpaid bills by people who never signed up as indigents and could not be counted among the thousands of Ndlambe residents for whom the municipality receives an equitable share to be able to provide free services.
Though not officially recognised as indigent, they nonetheless could not, or simply did not, pay for their monthly rates and service charges which accumulated to astronomical proportions.
The R24,5-million write-off represents just half of Ndlambe's wards. Dredge said they could not write off all debt in one fell swoop. The second round of write-offs is likely to be even bigger as it will account for Ndlambe's most populous wards, including Port Alfred and Nemato.
Other debt written off last week included R2,7-million for deceased account holders, and R1,1-million for housing charges dating back to the former transitional local councils.
The debt of deceased account holders represents another predicament in that it's not necessarily debt that could not be paid off. Family members of the deceased or other people who live in the house live do not inform the municipality and ignore the bills that keep coming.
The municipality wants to tackle this predicament by amending its credit control policy to debit charges to a tenant's account, but that requires keeping track of arrears and opening a new account for those actually living in the house.
Besides the debt write-offs we learned last week that the account arrears of the current crop of councillors has more than trebled in less than a year, from R18 302 in July last year to R67 538 in April. The debt of municipal staff is even larger at R636 347.
Clearly, there is a double standard at play here. The municipality is doggedly pursuing Victor and Nag for money withheld because of a dispute declared over lack of service delivery, poor budgeting, mismanagement and procedural impropriety, yet the municipality has shown no ability to make the slightest dent in years of mounting arrears of people who simply don't pay.
The case against Victor, court date set for August 13, represents more than just recovering Victor's withheld rates. If the municipality wins, Nag will have to hand over the more than R1,7-million in combined rates they have held in a trust account. A fraction of the money owed to the municipality, but money the municipality wants.
Victor is confident his case is winnable, but is also considering a settlement with the municipality. Nag's legal adviser Peter Bassett (not the advocate representing them), frankly told the 30 or so Nag members who attended their AGM that the municipality was likely to follow government's example of outlasting and "bludgeoning” its opponents as it has far more resources than the average person.
Nag has approached AfriForum for help, and this week AfriForum confirmed they were looking at the case.
- Jon Houzet
