Jason Ngobeni, City Treasurer

Local authority notice FOR the Information Statement, September 2006: Restructuring of the City of Johannesburg's Debtor's Book, click here. [PDF, 19Kb] RELATED LINKS: Masondo celebrates subsidy scheme THE City has helped more than 120 000 indigent residents and has written off more than R1,5-billion in arrears as part of its Municipal Services Subsidy Scheme. Read more City extends another helping hand to the poor THE second phase in the City's poverty alleviation campaign, Reathusa, was launched by Executive Mayor Amos Masondo, while the deadline for registering for the Municipal Services Subsidy Scheme was extended. Read more Finance THE finance and economic development department is critical to the functioning of the entire City as it is responsible for collecting revenue from consumers and ratepayers; setting and controlling the City's annual budget; expenditure; and economic development, including tourism and marketing. Read more Credit Control THE City's credit control department is responsible for collections, among other tasks. Read more

City plans to restructure Debtors' Book In an attempt to collect all the cash owed to it, Joburg aims to set up a new company dedicated to recovering its bad debts. The public has been asked to comment on the plans. September 22, 2006 By Anish Abraham JOBURG has issued a notice signalling its intention to create a municipal-owned entity that will restructure its Debtors' Book and facilitate an accelerated debt collection process. The Local Authority Notice has been issued in compliance with the Municipal Finance Management Act and the Municipal Systems Act. The company is being established as a Special Purpose Vehicle to restructure the Debtors' Book, separating it from the rest of the City's finances. In this way, bad debts will be ring-fenced and the company will be responsible for recovering the outstanding amounts. "We have a non-performing asset in our Debtors' Book and we are exploring what we can [do] to liquidate such an asset into cash, improving our balance sheet," explained Jason Ngobeni, the City Treasurer. Such a move would free up funds that the City could use for its capital expenditure needs. According to Ngobeni, the concept came about through investigations into debt owed to municipalities by the national Department of Provincial and Local Government. "It is not mandatory; rather it is prudent financial compliance. We want to have an optimum balance sheet comprised of good quality assets and liabilities." In the process, the City will make a separation between its residents with, on the one hand, those it feels are in a position to pay their debts but fail to do so, and on the other those who are unable to pay their debts. The City will consider whether the latter may benefit from either phase of its Municipal Services Subsidy Scheme. In the scheme's first phase, the City wrote off the arrears of indigent residents; in the second phase, known as Reathusa, low-income earners are required to pay off half their debt, with the City writing off the other half. The new company will then go about recovering debts from those debtors the City feels are able to pay but who are not doing so. "Last year the City was owed a gross amount of over R7-billion," Ngobeni said. "However, this amount includes those who will benefit from our indigent schemes and other subsidies. We are still busy separating the debts and calculating the exact amount owed." Ngobeni said that in compliance with the Municipal Structures Act, the City would seek comment from the public on its plans, until 4 November. The motion will then be put forward at the general council at the end of November. Members of the public can comment on the City's plans to restructure its Debtors' Book by phone on 011 242 1042/9; by fax on 011 242 1055/6; or by email at agentm@joburg.org.za or helenbotes@joburg.org.za. Comments can also be sent to Helen Botes or Mohau Motake at: Treasury Department 14th Floor Jorissen Place 66 Jorissen Street Braamfontein Permission to use web site material Publishers may use material from this site free of charge, as long as: Credit is given to either the "City of Johannesburg website (www.joburg.org.za)" or to "Johannesburg News Agency (www.joburg.org.za)"; If the article is used online, a link is provided to the original article on this website; The name of the article's author is acknowledged; The webmaster is informed of how and where the material is used (fill in this brief online form). Johannesburg News Agency is operated by BIG Media at 011-484-1400 Print this Page E-mail this article to a friend Help using Joburg.org.za