April 14, 2005
By Thomas Thale
AFTER registering marked improvements in resolving billing and revenue problems in recent months, the City of Johannesburg is set to establish a new structure to take charge of its billing and revenue functions.
Executive mayor, Councillor Amos Masondo, announced on Thursday, 14 April, that the City is to establish a new revenue organisation and spend R120-million upgrading and standardising its computer system in an effort to come up with a total solution to its billing and revenue problems.
The new structure will be set up as a municipal service entity in terms of the Municipal Finance Management Act. This is a departure from the idea mooted in 2002 of establishing a Revenue Shared Services Council.
The City's press conference: City Manager, Pascal Moloi; Johannesburg's Executive Mayor, Councillor Amos Masondo; mayoral committee member Parks Tau and acting CEO of the City's Revenue Department, Roland Hunter
Acting CEO of the Revenue Department, Roland Hunter, said the City settled on the new structure, in part, to comply with the Act, which requires the City Manager to account for all revenue generated by the City.
In line with the Municipal Systems Act, a by-law enabling the establishment of the new body was published for public comment in December 2005 and is expected to be adopted by the council in the near future.
The new entity seeks to boost capacity and streamline systems in the billing and collection of revenue for all council entities, including utilities, agencies and corporatised entities.
It is expected to resolve billing queries quickly, increase the collection rate, and speed up the issuing of clearance certificates for people selling their properties.
The new structure will see the City spend some R120-million upgrading its billing and customer interface IT systems. "This move will create a single platform for billing and customer interface, which will ensure high data quality, accurate billing, minimum errors and speedy query resolution," said Councillor Masondo.
These proposals are to be tabled before the council on 21 April.
Additional funding
Hunter said the City has applied to the national Department of Provincial and Local Government for assistance in terms of Project Consolidate.
The City requires funding to finance:
- a customer census;
- the programme itself; and
- the task team needed to set up the programme.
The City has also asked for specialised skills to help with the implementation of the programme. The Department of Provincial and Local Government could also provide 15 specialists in various areas over an 18-month period. The City has also requested IT support from the department.
Fragmented processes
The City of Johannesburg has for some time been dogged by problems of inaccurate billing, low collection rate and delays in the issuing of clearance certificates. These, said Councillor Masondo, were caused by "issues relating to insufficient capacity and fragmented processes and systems".
Hunter added that some of the problems could be attributed to incorrect or incomplete information on the City's database.
City interventions bear fruit
The new structure comes as the City reported improvements in its administrative handling of billing queries, revenue collection and issuing of clearance certificates.
"In the short term, the City has brought about numerous administrative improvements including in the areas of query resolution, clearance and credit control," said Councillor Masondo.
Administrative improvements recorded over the past year are:
- A one percent increase in the collection rate
- An improvement in the issuing of refunds and turnaround times
- A marked reduction in the number of unresolved queries from 49 360 in June 2004 to 24 690 at the end of March 2005
- An improvement in the time taken to resolve queries, with queries older than 90 days coming down from 27 000 in September 2004 to 12 000 at the end of March 2005
- Stepping up credit control
These interventions have resulted in a noticeable increase in the City's collection rate, which, in March, was 95,9 percent, said Hunter. In the first quarter of this year, the rate of collection has averaged 91 percent, a marked improvement on the 89 percent averaged the year before.
Clearing accumulated debt
The City will also explore the possibility of selling part of its debtor's book, which amounts to well over R7-billion.
Hunter said at its next sitting, the council will consider a proposal to sell its debtors book for approximately R1,5-billion. "But the proposal will only be finalised if there is a good price offered," added Hunter.
City Manager, Pascal Moloi, said the City would "first have to do away with the irrecoverable part of the debt before putting it in the market".
Mayoral committee member responsible for finance, strategy and economic development, Councillor Parks Tau, said a programme management team headed by the City Manager has been set up to oversee the transition process.
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