Metro going after rich account defaulters

The Nelson Mandela Bay municipality is toughening its stance on bill dodgers by going after the properties of those who own multiple homes or buildings.
It will specifically target account defaulters who own three properties or more and will go after the most expensive properties with the highest arrears first.
The city’s bean counters revealed, at a budget and treasury committee meeting on Friday, that the metro would implement a clause in its credit-control policy and attach properties after exhausting all other credit-control measures.
The move comes amid a desperate attempt by the municipality to recoup about R3.2bn – owed by households, companies and government departments.
Its revenue-collection strategies have not worked, with the debtors book increasing by about R100m in the last few months instead of decreasing.
The director of revenue management and customer care, Mbuzeli Nogqala, said on Friday: “Our debtors book is showing an upward trajectory and unlike other metros, our municipality doesn’t write off debt – it’s something we don’t do and I think it’s something we need to look at.
“The economic climate in our country is forcing us to start having that conversation.
“People are really battling – our [water] tariffs are very stiff.”
He said they wanted to act against bad payers without being too harsh on those who were backed into a corner.
“There is no way we can kick gogo out of her house in Motherwell if she is struggling to pay,” he said.
“But, for example, I know for a fact that there is a gentleman who has got about six properties – that chap is not paying us, he’s playing hide-and-seek and he’s actually requested to see councillor [Retief] Odendaal, and I’m not happy about that.
“Those are the kinds of people that we should go for – if you owe us R800,000 and you’ve got those six properties and you’re renting them out.”
Nogqala said they would go after the properties after consultation with the portfolio committee and after all other credit-control measures had been explored.
Odendaal, the metro’s political head of budget and treasury, said: “Attaching properties is one of the most difficult decisions we can ever take, so this committee must give guidance.
“We must go hard after those who can afford to pay and are not doing so.”
Most of the consumer debt on the municipality’s books is owed by households – 170,435 accounts are in arrears for a total of R1.793bn.Most of that is for water, which has risen drastically since the implementation of Part C of the water tariffs structure in June 2017 and the charging of punitive tariffs.
About R914m is owed for more than 120 days and is meant to be recouped by service provider EOH.
An official in the municipality’s revenue management department, Joel Swartz, told the committee the company had not made major strides in recouping the money since the start of its contract in 2016.
The municipality is also owed R260m by some of the city’s biggest employers – high energy users – who paid only 79.23% of their electricity bills between 2015 and June 2017.
They say the tariff increase over that period was inflated.
The municipality is still negotiating with the group in a bid to get them to settle their outstanding accounts.
In the meantime, it has taken legal action against them.
Another headache is the R403.2m locked in the estates of 48,335 account holders who are deceased.
Swartz said the municipality was struggling to establish who the heirs were of some of these properties as they were now liable for the debt.
But Odendaal says the municipality can forget about getting all the money owed from estates.
“It’s going to be virtually impossible because sometimes the only thing in the estate is the house and [the heirs] don’t have the money to pay those accounts,” he said.
The municipality was going to have to clean up its debtors book and write off money where there was no real chance of recouping it, he said.
“We are going to have to get a working group together and interrogate the accounts.
“If people qualify for [Assistance to the Poor] subsidies, why are we not automatically writing off after 90 days?”
Odendaal says some residents are tampering with their electricity meters after they have been blocked for nonpayment.
“If you look at the number of meters that have been blocked, there’s been no movement whatsoever – no-one is coming to make arrangements.
“I believe that those people are not sitting without electricity. I believe that they’ve tampered with their meters.
“We should be visiting every prepaid customer that is showing no movement and yet our response time is eight to nine months with the electricity and energy department.”
The municipality wants to install prepaid electricity meters in the 40,000 properties that still receive accounts for electricity usage.
United Front councillor Mkhuseli Mtsila said: “How has that debt of the high energy users escalated to R260m?
“I believe you are giving them preferential treatment, but you are quick to act on consumers who haven’t paid their accounts in full.”
Odendaal said the municipality’s back was against the wall, but it was moving towards reaching a deal.
ANC councillor Rory Riordan said there was ultimately no solution to the debt problem but there was rather an approach from the municipality to instil more discipline.
“There is a huge society in our city that is very poor.
“We need a solution,” Riordan said.

This article is free to read if you register or sign in.

If you have already registered or subscribed, please sign in to continue.

Questions or problems? Email or call 0860 52 52 00.