14 April 2005 Press Release PRESS STATEMENT BY CITY OF JOHANNESBURG EXECUTIVE MAYOR COUNCILLOR AMOS MASONDO TO THE MEDIA ON 14 APRIL 2005 RESOLVING REVENUE PROBLEMS: PROGRESS SO FAR The City of Johannesburg is to build a new revenue organization (NEWCO), as part of our ongoing efforts to resolve the billing and revenue problem. The process to identity the depth of this challenge has been long and complicated. But we are committed to dealing with this effectively. The Department of Provincial and National has offered support through Project Consolidate. We welcome the intervention by the Department of Provincial and Local Government whose support will go a long way towards eradicating this problem. The challenges in our system have mainly been caused by issues relating to insufficient capacity and fragmented processes and systems. This has meant that the customer often cannot get a query resolved. In the short term the City has brought about numerous administrative improvements including in the areas of query resolution, clearance and credit control. The City's cash collection is steadily improving with the collection rate in March 2005 at 95,9% up from 94,5% in February 2005. The average collection rate for the first three quarters of the current financial year was 91% up from 89% in the corresponding period last financial year. Refunds is an area we are still working at, but in the past few months we have already shown improvement. For example, in February this year, 83% of refund requests were issued in 30 days, and by March this improved to 94%. A recent age analysis on the query logging system shows that there is a downward trend in the number of unresolved queries. In June 2004, we had 49 360 open trouble tickets …. Or in simple language, queries from our customers. By the end of March this year, there were a total of 24 690. This time taken to resolve queries is also improving. For example, in September 2004, around 27 000 queries were older than 90 days. By the end of March, this had dropped to 12 000. There is some progress but we will do a lot more. But these administrative improvements on their own will not be sufficient to permanently address the issue. We will therefore establish a new revenue organization. This organization will be a municipal service entity formed in the terms of a by-law. The City is also considering a R120 million update of 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, minimize errors and speedy query resolution. Presently the City deals with considerable fragmentation in respect of information systems for revenue and customer relations management. For example, the City and its utilities use several different IT systems to perform the same functions. These proposals will be considered by Council 21st April. Council will also explore the possibility of selling portions of its debtors book. This will be done through the process of a competitive bidding process. The proceeds of the sale will be a boost to capital expenditure over the medium term. While we have made some progress many challenges remain. We are addressing these in a context of the following: Municipal service must be paid for, so that service delivery can continue Free basic services must be provided to address issues of affordability Batho Pele: customers must be well-treated Billing must be accurate and timely Queries and errors must be dealt with quickly Council must collect what is owed to it, hence credit control measures must continue ENDS