CREDIT CONTROL POLICY
It is vital to the long term financial viability of the Council that it collects the revenues due to it for services rendered.
In rendering services the Council accepted the fact that it remains accountable for ensuring the provision of quality services which are affordable and accessible. The Council accepts the fact that access to services does not mean a right to the services. The Council will endeavour to render services in accordance with affordable service levels and to set tariffs at levels which balance the economic viability of continued service provision. The Council undertook to treat all residents equitably with regard to the provision of services and to ensure the quality of the services.
(i) Efficient metering
The Council will install metering devices, where applicable, in order to be able to measure the amount of services that households consume.
(ii) Regular, accurate billing
The Council undertakes to render regular and accurate bills for the services delivered in a format which is easy to understand.
(iii) Access to relief for poor
The Council undertakes to implement an indigent policy whereby the economic cost to render the service to the poor, will be subsidised.
(iv) Measures against defaulters
The Council will take strong measures to deal with households who can afford to pay for services but are not doing so.
(v) Setting of tariffs
The Council shall determine a tariff policy that will recover the economic cost to render the service.
(vi) Establishment of pay points
The Council will ensure to take all reasonable steps to provide adequate pay points which will allow consumers unrestricted access to settle their monthly accounts.
(vii) Communication
The Council will endeavour to, through the respective development, communicate the budgetary process, tariff policy and tariff setting as well as other financial issues i.e. indigent relieve policy, credit control policy etc. in order to be transparent and to render sustainable services.
(viii) Agreements
The Council will enter into service provision agreements with consumers and will render such services whilst the terms of the agreements are observed.
(C) ACTIONS AGAINST DEFAULTERS
As the accrual system is used to record income it requires that all income must be collected to finance expenditure. The principle is accepted that recurring income must finance recurring expenditure within the budget cycle of twelve months. The debtors turnover rate should not at any time exceed the national norm of forty two days.
In terms of the Council= s Financial regulations any payments received from debtors for service delivery by the Council shall be used to off-set debts to the
Council in the following order:
(i) Instalment - dwelling
(ii) Instalment - stand
(iii) Sundries
(iv) Additional - deposit
(v) Rates
(vi) Penalty on arrear rates
(vii) Collection charges on arrear rates
(viii) Refuse removal
(ix) Water
(x) Sewerage
(xi) Electricity
(xii) VAT on vatable services will be proportionate among the applicable services
Non payment of accounts will be dealt with as follows :
Services will be discontinued with immediate effect. Should it be noted that consumption is registered after disconnection, the connection will be removed at the owners cost and will not be reinstated until such time the full outstanding cost is paid to Council plus the additional service connection and consumer deposit required in accordance with the Council= s Tariff of Charges and Bylaws.
(ii) Sewerage, refuse removal, rates and sundries
Council= s attorneys will be instructed to institute legal action and to take steps to repossess the applicable properties in lieu of outstanding rates and charges.
(iii) Land and dwelling instalments
The deed of sale or lease agreement will be cancelled and eviction orders be obtained. Outstanding amounts will be recovered through legal action and/or listing with the Information Trust Corporation (Credit Bureau).
35% : 1 - 6 shall apply;
65% : 1 - 3 shall apply;
85% : 1 and 3 shall apply.
The following will apply :
(ii) Water
(iii) Refuse Removal
(iv) Sewer Services
(a) Waterborne systems - will cease to function as bulk water service or metered services have been terminated.
(b) Pail and VIP Systems
- Where the Council is the service delivery authority - the services will be terminated immediately.
- Where another authority is the service delivery authority and Council is responsible for the cost of such service - the supply authority will be informed that the Council is no longer to honour the monthly cost until such time payment is received from the applicable community.
(v) Rates / Service Charges / Sundries
(vi) Land and Dwelling Instalments
The deed of sale or lease agreement will be cancelled and eviction orders be obtained. Outstanding amounts will be recovered through legal action and/or listing with the Information Trust Corporation (Credit Bureau).
The connection will be removed at the owners cost and will not be reinstated until such time the full outstanding cost is paid to Council plus the additional service connection and consumer deposit required in accordance with the Council= s Tariff of Charges and Bylaws.
Consumer Deposits shall on an ongoing basis be adjusted/recalculated to cover at least two and a half times estimated consumption. The minimum deposits required shall be calculated in accordance with the debtors and deposit ratios as applicable during May of each year. A review of deposits of residents in arrears as well as new accounts will be undertaken.
Unless provided for in any act of Parliament, amounts due to the Council for any service rendered shall be due and payable when the service is rendered. Notwithstanding any disputes that may arise, the outstanding amounts will bear interest as indicated under (6) and all amounts remaining outstanding after 90 days shall be handed over for collection.
Interest at the rate as determined by the Council in accordance with applicable legislation will be charged on all arrear amounts, ie., on the day following the final date for payment indicated on the account. For this purpose part of a month will be treated as a full month.
Credit Bureau Listing
The names of account holders in accordance with the Council= s records will automatically be listed with credit bureau= s simultaneously with the handing over of amounts for collection.
Where pre-paid meter have been installed and the consumer falls in arrears with non-measurable service, the Council will use any funds received in respect of pre-paid service on a pro-rata basis as determined from time to time, to settle arrears on the non-measurable services account. In this regard it is emphasized that the Council reserves the right to refuse pre-paid services on the grounds of non-payment for unmeasurable services.
The Council will dedicate staff to fulfill consumer management that will assist consumers experiencing financial difficulties. Agreements may be entered into to assist those consumers and disconnection will not take place as long as the terms of the agreement are observed. Agreements will only affect arrears as at the implementation of this policy and do not affect current consumer accounts. Such agreements will also exclude interest payable on arrears at the date these agreements take effect.
(D) LEGAL STATUS
The collection of income is the responsibility of the Chief Executive Officer. Section 10G(2)(a)(ii) of the Local Government Transition Act (Second Amendment Act) determines that the Chief Executive Officer of a municipality:
A Shall cause to be kept in the accounting records contemplated in sub-paragraph (i) a revenue account which shall be credited with all moneys which accrues to and is received by the municipality ........@
Section 10G(2)(f) of the said Act determines further:
A If a person who is or was in the employ of a municipality causes or caused the municipality a loss or damage because he or she:
(i) Failed to collect money owing to the municipality for the collection of which he or she is or was responsible....................
The Chief Executive Officer of that municipality, or, if the Chief Executive Officer was responsible, the Council, shall determine the amount of such loss or damage and take disciplinary action where possible and in appropriate cases recover the loss or damage.@
The Council recognizes the legal obligation and will not interfere, individually or collectively, in the collection process.