Letter by Cllr Peter Verbeek, DA Shadow MMC for Finance and Revenue in Emfuleni, writes:
A new Emfuleni Council was inaugurated end of August 2016 post the 3rd of August 2016 municipal elections. The previous Emfuleni Council ended with a Debtor’s Book of R3,5 billion:
• 2016/17: The Debtor’s Book increased to R5 billion (Increase of 43%)
• 2017/18: The Debtor’s Book increased to R7 billion (Increase of 40%)
• 2018/19: The Debtor’s Book increased to R8 billion (Increase of 14%)

The challenge with the Emfuleni Debtor’s Book is:
1) Based on accounting principles, a debtor’s book is an asset. It entails money still owed to the municipality and that debt can be collected.
2) However, from a municipality point of view, residential debt older than 90 Days, becomes a problem: it becomes less recoverable for the municipality.
• In other words, it is nice to be owed, but reality defines that the vast majority of this debt cannot be collected.

Beginning with the 1st Quarter of the 2019/20 financial year, the Emfuleni Finance and Revenue Department commenced with an electricity disconnection process in the CW areas. In total it concerned 852 households to the value of R68 million owing to the municipality. The average CW area owing to the municipality varying between R62 353,20 to R98 015,56 per household.

The Finance and Revenue Department requests a 25% down payment with arrangements for the remainder of the outstanding balance. Where do residents “find” between R15 588,30 and R24 503,89 before arrangements? Residents want electricity! The risk potentially increases that residents opt for possible illegal connections! Which ultimately could lead to Emfuleni municipality receiving less revenue.

“A Residential Debt Recovery” programme:
• Emfuleni Local Municipality subsequently introduces a 50% write-off to residents
• This 50% debt write-off is spread over three consecutive financial years
• The focus of this 50% debt write-off will be the historical debt of residents (debt older than 90 days)
• Residents need to ensure that their current Monthly account is up to date
• Total income on the property must be between R4 700 and R22 000 per month and the property value may not exceed R600 000
• Emfuleni residents opting for this write-off accept an Emfuleni SABS pre-paid electricity meter

Emfuleni Local Municipality has been placed under provincial “intervention” in June 2018 and “partial administration” as per March 2019. The Financial Recovery Plan (FRP) is not yielding the envisioned results. The DA has embarked on a campaign to place Emfuleni Local Municipality under Section 139(1)(c) of the Constitution of the Republic of South Africa; dissolution of Emfuleni Council and full administration.