Mangaung Draft Budget 2020/21 Outstanding Debtors

OUTSTANDING DEBTORS

From an analysis of outstanding debtors over a 48 month period (May 2016 – May 2020) the following can be observed.
• Total outstanding debtors at May 2020 is R3 577 553 400 more than at May 2016
• On average outstanding debtors increased with R75.5 million per month
• Debt as a percentage of total debt was as follows on 31 May 2020
o 32.5% Water
o 20.4% Rates
o 14.1% Interest
o 13.2% Electricity
Outstanding water debtors increased with R1 001 813 383 over the period or on average with R250 million per year.
 The obvious solution is to replace rotating water meters with pre-paid water meters. The present ANC council under leadership the Executive Mayor failed to address this issue. Their solution is to raise the tariffs with the result that the debt of non-paying users is recovered by paying users.
 The second issue that needs to be addressed is the loss of purified water lost as a result of unmetered water used, burst pipes and illegal connections. The audited outcome for this water loss is around R200 000 000
When we as DA take control of this council we will rectify the two above issues speedily as an important step in fixing the financial problems of this metro. And for those who don’t know, it will curb the enormous provisions for dab debt and create space for spending on service delivery.
Outstanding Government debt increased with R1 536 865 920 over this period. If they do the right thing and settle their debt the more than R1 billion expenditure item on the budget for debt impairment can be removed. In the Systems Act it is clearly stated that National and Provincial departments and public entities must promptly meet their financial commitments towards municipalities.
The total provision in the draft budget for Legal Cost Collection (Debt Collectors) is R36 537 963. How can this cost be justified with the huge increase in outstanding debtors. It is not rocket science to collect outstanding debtors and can be done by our own personnel.
Failure to bring the outstanding debtors down to acceptable levels are surely going to lead to the downfall of this metro that finds itself already on the edge of the abyss.

Analysis by DA Mangaung Cllr Hans Britz