• Presentation on the Implementation of Free Basic Services.
• Naledi Local Municipality
• 21^st June 2005
• Old Assembly Chamber, Old Assembly Wing, Parliament
• Presented :Municipal Manager Tebogo Kebotlhale

Background

• The information contained in this presentation is based on a set of Policies adopted by Naledi Local Municipality during 2005 and available communiqués with stakeholders.
• Tariff Policy.
• Indigent Relief.
• Customer Care Policy.

Credit Control and Debt

Free Basic Services/ Subsidized Services

• Water
• Electricity
• Sewerage
• Refuse Removal
• Property Rates

Naledi Local Municipality has not yet implemented all FBS in their area of jurisdiction.

• This is due to the fact that the Indigent Register is not yet in place.
• Bids to compile an Indigent Register were invited and a service provider was appointed during May 2005.
• The Indigent Register will be completed and approved by Council at the end of September 2005.

• All users of municipal services will be treated equitably.
• Proportional charge to usage of municipal services.
• Poor households must have access to basic services and relief will be granted to poor households on a universal approach.
• Only if National Government pays the municipality an equitable share subsidy which covers the full costs of FBS.

Tariffs must reflect the total cost of the service and must be set at a level that facilitates sustainability.

• Penalties may be applied to prohibit or restrict exorbitant use.
• Extent of subsidization of tariffs will be disclosed including extent of subsidization of the poor or incentives for LED.
• Provision may be made for the promotion of LED through special tariffs for categories of commercial and industrial users.

• Tariffs will not reflect relief granted to poor households. Such incentives will be developed as a separate policy and subject to discretion of Council as to sustainability.
• Relief will be reflected, accounted for and disclosed separately in invoices, account statements, budgets and financial statements or reports.

Poor households are expected to manage their consumption beneath the levels of relief granted.

• Assistance and management of poor households is contained in the Customer Care, Credit Control and Debt Collection Policies of Council.
• However, Council reserves the right to limit consumption through pre-paid meters or restriction of services if the accounts of assisted households fall into arrears.

Customer Care Credit Control and Debt Collection Policy

• Purpose is to provide funding for a basic level of service to qualifying households with a total gross income of R1 600.00 per month.
• If use of a municipal service is less than the subsidized service, unused portion may not be accrued-no cash or rebate payment for unused portion.

Consumption of municipal services in excess of subsidized service, customer will be obliged to pay for such excess at applicable rates-

• Qualifying consumers for an equitable share will be placed on restricted service level to curb further escalation of debt.
• An indigent customer must immediately request de-registration with Council once his/her circumstances change and no longer meets the criteria.

Basket of Tariffs-Low Income Group (R1 600)

• Currently Naledi Local municipality provides the first 6Kl of water free to all households in its area of jurisdiction.
• Once the indigent register has been completed, only indigent households will receive the benefit.

• Free Basic Electricity will only be implemented from 1 December 2005.
• This leaves the Municipality with only two months within which to negotiate with ESKOM regarding beneficiaries to toe supplied with free basic electricity.
• Confirmation has been relayed to ESKOM regarding the implementation of free basic electricity by the 1^st of December 2005.

• Free Basic Sanitation will only be implemented from 1^st December 2005 after the Indigent Register has been completed.