There’s been a public outcry regarding the termination of services within the City following alleged non-payment.
This has prompted the municipality to announce new measures under which these will be sanctioned.
For the City, even one wrongful termination is one to many and we are doing all we can to reverse the City’s long standing billing crisis.
“Ratepayers should note though that the process of sanctioning the termination of municipal services for defaulting customers will now be managed at a higher level. Ideally, we want a situation where the City doesn’t have to terminate services because ratepayers are able to manage their municipal debt,” says the Portfolio Head of Finance, Dr Rabelani Dagada.
To improve the accuracy of disconnections, the City has instituted a process of verification that will be done by the Group Head of Revenue Shared Services Centre (RSSC).
“We’ve received, over the past months numerous complaints from customers for alleged wrong disconnections. We have promised the residents of Johannesburg that we will run a caring, responsive and professional government. It is on this premise that we found it necessary that we improve the Credit Management process, in particular, the process of termination of services,” MMC Dagada explained.
Once a list of accounts that are due for disconnections has been issued by the City’s Credit Management team, it will then be reviewed by the Director of Credit Management before the final list is issued for disconnections.
The issuing of pre-termination notices and the subsequent termination of municipal services are part of the City’s Credit Management function, which is necessary to curb the Metro’s bulging debt and run a financially prudent municipality.
MMC Dagada said the City needed all monies owed to it in order to remain financially sustainable and to continue providing quality basic services to all residents of Johannesburg.
“Credit Management in its design is intended to be uncomfortable to avert a situation where customers become or remain indebted to the City, but it has to be done with utmost care to ensure accuracy,” the MMC said.
The review will look for incorrect imminent disconnections, accounts with queries, and accounts where payment has been made but it has not reflected on the City’s system.
“We are working tirelessly to improve the quality of the City’s billing data to reduce inaccuracies in billing and collection measures,” the MMC noted.
The Credit Management process starts with demands made for payments that are due to the City. Due dates for payments are usually 15 to 21 days from date of invoice. Customers are often called by the City’s outbound collections teams a few days before payment is due and when payments are 3 days overdue. After another 3 days has passed and no payment has been received a pre-termination notice is issued.
The pre-termination notice is designed to alert customers that they need to make payment or make a payment arrangement to pay for the overdue amounts. The pre-termination notice gives the customer 14 days to make payment or make a payment arrangement.
If payment is not received and no payment arrangement has been made, disconnection of services is effected within 7 days post expiry of the pre-termination notice. All customers with arrears over 60 days are handed over for legal collection.
In terms of section 64 (2) of the Municipal Finance Management Act (MFMA), the municipality must take reasonable steps to ensure that an effective revenue collection system, credit control and debt collection policies and procedures are in place.
“Credit management is intended to rehabilitate customer debt and assist ratepayers to remedy their municipal accounts so they don’t continue to be indebted to the City,” says MMC Dagada, adding that Credit Management was the City’s last resort at collecting monies that are long due to it.