Upset over debt collection

Dozens of Woodlands residents protested water arrears being recovered from their electricity purchases. They are pictured outside their local community centre on Saturday March 10.

Up to 40% of your prepaid electricity purchase is being deducted to cover the expense of an outstanding municipal account, including water, rates and refuse.

Danny Christians, councillor for Ward 81 (Rocklands and parts of Portland), who is a member of the City of Cape Town’s finance portfolio committee, explained that when buying R100 electricity, R40 could be deducted for “debt recovery” if residents had failed to pay their bill, after already having had their arrears scrapped.

Speaking to the Plainsman yesterday Tuesday March 13, after residents in Woodlands protested their water arrears being recovered from their electricity purchases at their local community centre on Saturday March 10, Mr Christians said the City had a R2.4 billion budget for bad debt, which included arrears being scrapped and indigent grant applicants.
“Once residents apply to have their arrears scrapped via their ward councillor, completed forms are submitted to council’s debt management department, who will scrutinise the information.

“You will be informed in writing that the debt has been written off,” he said.
Those who qualify must have a combined home income of less than R4 000 a month; and agree to have an electricity prepaid meter and water management device installed for free.

The installation of these devices can take up to three months and to have the arrears written off can take up to a year.

The total number of applications that the department receives dictates the time it takes have the debt written off.

Mr Christians said during this time the account is frozen, no interest is accrued and debt incurred will be written off. “But once the debt has been written off, you have to start paying the account,” he said.

Arrears can only be written off once, and if debt is incurred again, residents will receive pink letters and punitive measures are put in place.

Approved indigent applications are valid for 12 months.

However, if the applicant is 60 years or older it will remain valid until the implementation of the next general valuation, supplementary valuation or change in gross household income affecting the owner’s property.

Woodlands Ratepayers’ Association chairman, Clarence Human, said he had received five complaints in one day about municipal debt being recovered from residents’ electricity purchases.

A meeting was held on Tuesday March 6, where it was decided to host the protest on Saturday.

“There are a lot of pensioners in our area. Why do they have to suffer?” he asked.

Mr Human said: “I don’t know what we’re going to do.”

He showed the Plainsman the R57 589.99 municipal bill of Woodlands resident Reginald Johannes, who had his arrears scrapped. Mr Johannes bought R30’s electricity on Thursday March 8, however, of this amount, R6.20 went towards debt recovery, leaving him with 11.90kWh units of electricity.

Elizabeth Thuynsma, 73, received a letter from ITC business administrators, stating that she owed the City R5 118.48. The letter said she had failed to respond to previous written correspondence from the council.

Her electricity receipt showed that of her R30 purchase on Wednesday February 28, R14.70 went towards debt recovery.

Michael Jacobs, deputy chairperson of Mitchell’s Plain United Residents’ Association (MURA), said it was the City’s responsibility to ensure residents were only paying for services that were actually rendered. “It is disturbing to note, that especially pensioners, who are supposed to be benefiting from the indigent grant, are negatively affected by these bills, for which there are no answers.

“We call on the City of Cape Town to refund all of its citizens,” he said.

Mr Jacobs also pointed out that residents who showed negative balances on their accounts, were also being penalised.

Mariam Wolmarans, 70, showed her municipal balance of minus R300, but close to 50% of her electricity purchase, went toward debt recovery.

The Plainsman sent a media enquiry to the City about these queries, to which mayoral committee member for finance, Johan van der Merwe, replied. “Indigent residents who applied for the benefit are advised in writing when their application has been approved and advised of all of the relevant benefits as a deemed indigent property owner, which includes the once-off write-off of the arrears debt,” he said.

“Once, the write-off has been implemented on the system and the relevant devices set, the implemented write-off is reflected on the next billed invoice,” he said.

Mr Van der Merwe said municipal debt was deducted from electricity purchases where customers had not responded to the City’s request to agree to a repayment plan or to honour the terms of such an agreement.

“This could influence the cost or number of units bought as a percentage of tendered amount is deducted to service the debt and the remainder converted to electricity units,” he said.

This is in accordance with the City’s Credit and Debt Management Policy, which protects indigent customers but at the same time also tries to establish a culture of payment for non-indigent customers to ensure the municipality is financially sustainable.

Woodlands Ratepayers’ Association member, Junaid Mcleod, said while the amounts for debt recovery may seem little per electricity purchases, “it must be multiplied by the amount of residents being charged this fee, this will amount to a lot”.

Mr Mcleod said residents were misinformed about the municipal bills and that more needed to be done to educate them and raise awareness about municipal billing systems and policies.

To apply for an indigent grant, visit your ward councillor and take along proof of identification, a recent three-month bank statement or an affidavit stating that you do not have a bank account, a three-month bond statement or an affidavit stating that you do not have a bond account; and if you have inherited the house, then copies of the estate documents. Employed applicants must take their latest salary/ wage slip or letter from their employer stating their income; and proof from the South African Social Security Agency (SASSA) showing receipt of a disability grant, maintenance or pension.

For details on your ward councillor, call the Lentegeur administrative offices on 021 444 8696 or 021 444 8722 or visit the offices on the corner of Merrydale Avenue and Melkbos Street, Lentegeur.