14 June 2006
By Chris Khumalo
Durban – eThekwini Municipality, which is owed R2 billion for rates, water and electricity by individual ratepayers and business, has adopted an aggressive credit control and debt collection policy to recover this debt.
The new no-nonsense debt recovery bill, which will see the council deducting the owed amounts from debtors’ salaries, has been approved by the council’s most powerful decision-making body, the executive committee (exco).
However this policy is still to be approved by the full council, after which it is to be opened for public comment.
City debt figures at the end of April 2006 showed that ratepayers and businesses owed the municipality more than R2 billion for rates, water and electricity.
The city's outstanding rates bill stands at R1.2 billion, water at R713.2 million and electricity at R108.4 million.
City Manager Michael Sutcliffe said Durban was the most “successful” city in the country at collecting debt and the policy was set out to ensure it maintained this record.
The municipality will begin by first putting its own house in order, using the Municipal Act to deduct money from the salaries of its staff members who have not paid for their services for more than three months.
"I am giving all staff members one month's grace to pay up their arrears. From August we will start deducting what they owe from the salary," said Dr Sutcliffe.
Dr Sutcliffe said municipal employees with outstanding traffic fines would also have these deducted from salaries.
"If officials cannot lead the way in making sure that they are paying arrears, then who can?" he said.
The policy permits the municipality to combine individual and separate accounts into one consolidated account, payable monthly.
According to the policy, the municipality will always take money from arrears accounts before current accounts.
The first account to be paid is water. Electricity and private charges will be deducted last - if a monthly payment is insufficient, the water account will be paid but the electricity bill will be unpaid, allowing the city to disconnect the electricity.
Even businesses will not escape. No tenders will be awarded to any business which has a director, partner or owner who is not up to date with payments.
The policy also allows the city to enter into an agreement with employers who have defaulting ratepayers on their staff to deduct arrears from their salaries or wages. However, the person would have to give consent first.
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