5 January 2006 CITY'S CASH COLLECTION LEVELS AT RECORD HIGHS A great challenge for all municipalities is the collection of monies owed it for income due it. Joburg has made excellent progress in addressing this particular challenge, according to the City's Revenue Department spokesperson Mandy Jean Woods. "In the financial year 2004/5 the overall collection rate was a record 93,3%. The collection rate for September 2005 was 98,5%. The average collection rate for the financial year to November is 94,4%. This is significantly up from where the collection rates were hovering a few years ago," says Woods. "More than 95% of the City's income emanates from water, electricity, rates and taxes levied on residents and it is important that these monies are collected so that service delivery can continue to grow and improve." City Power and Joburg Water are also playing their part and achieving record collection level from the customers they manage (these are customers for whom affordability is not an issue like higher income residents and businesses). The outstanding debt varies but remains significant, and this is well known, she says. "But effectively for the past year we have been following a four-pronged approach with successful results." The four pillars of the strategy to reduce unpaid debt are: 1. Addressing Uncollectable Debt – this is being addressed through the Municipal Services Subsidy programme. To date in excess of R1 billion has been written off, so reducing the overall debtor's book by the same amount. 2. Introducing an Incentivised Repayment Scheme – this scheme, which will be introduced in February 2006 aims to assist homeowners who have a total income level of between about R1 500 and R6 500 to pay their arrears and to bring their accounts into a current situation. 3. Sale of the Debtors Book - The City has previously announced that it intends to investigate the sale of its debtor's book. Work on this is progressing. Adopting a Credit Control Policy – a new Credit Control By-Law was promulgated in May this year. Johannesburg was the first City in the country to adopt such a by-law. Work on implementing all aspects of the policy is underway and it is expected that it will be fully implemented by the middle of next year, with the first elements of it becoming effective from January 2006. A copy of the by-law is available on the City's website at www.joburg.org.za. "The City has adopted a vigorous approach towards arrear management and thousands of defaulting debtors are at various stages of litigation in recovery whereas daily hundreds of service termination instructions are executed in our attempts to bring the arrear account into line prior to litigation," says Woods. Final Letters of Demand are also sent out to account holders in arrears and these residents have 14 days in which to either pay their accounts, enter into a formal repayment programme where the account is in arrears or alternatively to log their query with the Call Centre, failing which their services will be interrupted or restricted. "To date, the City has enjoyed around a 50% response to the Final Letters of Demand it sends out with customers either paying their accounts or making arrangements to pay off their accounts, and this figure is growing steadily," says Woods. Issued by: Mandy Jean Woods General Manager: Marketing and Communications Department of Revenue, City of Johannesburg Phone: 358-3420 Fax: 358-3423 Cell: 082 553 4211 (Please send sms if urgent) Email: mandyw@joburg.org.za