Buffalo City’s customers owe R1.84-billion, with some overdue payments dating back more than five years.
Non-paying residents are costing the city millions in outstanding rates, sewerage, electricity, water and refuse removal bills.
Households owe the most – R1.1-billion as of the end of September.
City manager Nceba Ncunyana said yesterday that the top five non-payers were Quigney, Parkside, Gately, Amalinda and Southernwood. Households were followed by businesses, which owe the metro R419.2-million. State departments owe R65.23-million.
The debts could be higher: Ncunyana said “the final figure for October is not available as yet”.
The metro recorded an 82.15% collection rate for the year to date by the end of September. In the last financial year it was 85%. The target for this financial year is 93%.
“The current economic climate has a negative effect on businesses and therefore increase in debt and arrangements,” said Ncunyana, adding that BCM continued to block and disconnect non-paying customers.
However, in his first financial performance report, executive mayor Xola Pakati said despite the implementation of credit control and debt collection actions “the primary contribution factor to the increase in debtors and reduction in collection rate can be attributed to non-payment by our customers”.
He lambasted business owners and government departments for failing to pay what was due to the metro, saying there was no justification for business owners failing to pay for services while they continued to enjoy making profits from their businesses.
“The same applies to government departments. There is no reason they are not paying. This crisis has recently been brought to our attention and we are very uncomfortable with it. It is a lot of money that could have been used to benefit thousands of BCM residents through our projects to improve service delivery,” Pakati said.
“It is very unfortunate that even government departments follow the bad habits of ordinary citizens.”
However, when asked why the city had allowed the residents to run up a debt of R1.1-billion over a period of years, he said he was not informed as to what had contributed to the non-payments.
“The department of finance should bring to the attention of council the action they will take to make sure that we get our money from these people.
“There is no justification for businesses, the same applied to government departments, we don’t cut them off because it would be embarrassing for them.
“But soon we will have no choice but to do so if they do not pay up because the city ends up incurring debt as we also buy and pay for the services we provide,” Pakati said.
At the end of September the department of health owed BCM R20.7-million for services and the provincial department of public works R20.6-million.
The national Department of Public Works had arrears of R2.3-million in September after paying R20.1-million in August, while the department of education was R1.3-million in arrears.
The department of sport, recreation, arts and culture was the only one that paid off its debt in August.
The report revealed that domestic consumers had the highest share of debt older that 30 days, followed by indigent consumers.
However, an unimpressed East London Ratepayers Association secretary Christo Theart found the maths hard to fathom.
“It is a puzzle to all of us how they claim that ratepayers owe so much to the city when we get letters demanding payment and threatening us when we don’t pay our rates. When we don’t pay they cut us off, so where does so much debt come from?”
Theart said BCM needed to explain what he described as an “impossible debt” from residents.
“They need to explain how they let this debt get to where it is now when they have policies in place. I own property in Quigney and Southernwood and if I’m one day late for payment I get letters demanding that I pay.”
The report says deductions are stop-ordered for all municipal staff and councillors in arrears. Metro staff made up 0.09% of outstanding debt. — mamelag@dispatch.co.za