Msunduzi Budget Tabloid 07-08

IDP/Budget 2007/08The Msunduzi Municipality Budget May 2007

INTRODUCTION OF THE PEOPLE’S BUDGET

It is a great pleasure and honor to inform the citi-zens of the City of Choice

that their needs as recorded during Izimbizo in May and October 2006 became our clarion call and formed the core and basis in the IDP re-views and fi nal and draft budgets for 2006/07 and 2007/08. Great strides and great improvements were made in aligning the commu-nity needs with the revised IDP and drafting the Budget for 2007/08. A list of major projects planned for the new fi nancial year stand as the wit-ness to our intensions to make the Budget for 2007/08 fi nan-cial year the People’s Budget.

It is our challenge as the municipality; i.e. Manco and members of staff, unions lead-ership, Exco, Councilors and various stakeholders in com-munities and various spheres of government strive together to achieve these targets and to develop and refl ect on sector plans at a municipal level with agreed priorities, indicators and deadlines. Our challenge as the City in consultation with stakeholders is to develop and adjust some of the following municipal and sector plans:

• Spatial Development Framework (in progress)

• Land Use Management Plan

• Water Services Develop Plan

• Disaster Management Plan

• Public and Transporta- tion Plans• Integrated Waste Man-

agement Plan

• Electrifi cation Plan• Environmental Management Plan• Integrated HIV and AIDS Program• LED Plan/Strategy• Poverty Alleviation Program• Gender Equity Program• Cemeteries and Crematoria Plan• Tourism Development Plan/Strategy• Fleet Management Implementation Plan• A Five Year Financial Plan (to be reviewed annually like any plans)• Integrated Revenue Strategy• Organizational Transfor- mation Projects• Integrated Housing Delivery• Performance ManagementAsisukume futhi sibam-

bisane sakhe imiphakathi ne-sizwe sethu!!

I would like to thank the IDB/Budget team, IDP/ Budget Planning Com-

mittee, Offi cials, Unions, Councillors and other external Stakeholders who participated in preparation for the up-com-ing Izimbizo that will take place around the City of Choice to discuss the achievements, progress and the challenges that Council is confronted with since last year’s Izimbizo. Izim-bizo process has created an environment whereby Council regularly gets the opportunity to listen to and to be held ac-countable by our citizens. This is a clear demonstration on the part of Council that it is indeed serous about complying with all legislation requirements and democratic principles en-shrined in our Constitution.

We have built on Izimbizo concept within our system of governance which is a direct

result of our belief that the voices and views of the com-munities are important to us. In the past years, we have en-gaged different communities on many Izimbizo. We have gone through the length and breadth of our City to hear fi rst hand what problems and chal-lenges our people are facing.

The interactions with the communities have exposed us to the strengths, shortcomings and challenges of Local Gov-ernment. We have not masked diffi culties, mistakes and fail-ures, nor have we claimed any easy victories. Our Municipality commits itself to responding to the needs of the people wher-ever they are located and irre-spective of their political affi li-ations.

The processes of Izimbizo

serves to remind us of the long journey that we have traveled in ensuring strategic content and unity in the City of Choice to better serve the people as demanded by our Constitution. Critically we proceeded from the understanding that without information, there can be no popular participation and without popular participation there can be no lasting legiti-macy or transformation of our society.

It is accepted without ques-tion that success lies in the root of good communication in this fast-moving, global world in which we live, particularly in matters of delivery and devel-opment. It fosters the necessary environment for the pursuit of partnerships leading to shared growth and a better life for all.

For those of us who enjoy the freedom that came through struggle, and who today live in our country’s Age of Hope, the question must be: to what ex-tent are we acting to build on our City’s achievement in order to help ensure that the public is informed about its rights and responsibilities; to what extent are we co-operating to ensure that those who are disadvan-taged know about the opportu-nities that democracy has brought about and are then able to take advantage of them.

Through all our efforts, we are starting to reap the fruit of our toil, the sweat of our brows and the place called hope is our destiny.

Overview from City Mayor

Ms Zanele HlatswayoCity Mayor

Message by the City Manager

Mr Rob HaswellActing City Manager

The development of the 2007/2008 budget is yet another signifi cant

milestone for the Msunduzi Municipality and follows an exhaustive process of aligning and balancing council’s vision with the amount of money available for the fi nancial peri-od.

As with all budgets a balance has to be achieved between what needs to be done and what can be done, taking par-ticular cognisance of not only maintaining existing infra-structure but of also reducing the service backlogs in formerly

marginalised communities. There are also other perti-

nent factors that infl uence the budgetary process and these include issues such as sustain-ability, alignment with national principles such as job creation within the Expanded Public Works Programme and align-ment with the city’s medium term expenditure framework as expressed by the IDP (Inte-grated Development Plan).

The IDP is a fi ve-year frame-work that provides a develop-mental plan upon which to de-sign budgets and shape spending patterns.

Hereafter, and in the inter-ests of public participation, the mayor together with ward and PR councillors will be leading a series of izimbizo (public meet-ings) to present the draft budget to communities for in-put.

This process will ultimately culminate in a fi nal budget be-ing presented to a full sitting of council for adoption.

Msunduzi budget 2007/2008 – a people’s budget to create a dynamic, caring Capital City of Choice in KwaZulu-Natal!

2

R. Pillay

CouncillorSandra Lyne

Councillor Tholakele Dlamini

CouncillorDoreen Buthelezi

CouncillorPatrick Moon

Councillor

Bonginkosi Mazibuko

Councillor Sibusiso Hlela

Councillor Balozile Sokhela

CouncillorHenry Ngubane

Councillor Ranjit Singh

Councillor

Hamid Kader

Councillor Mamfucwane Zungu

Councillor Doris Hlongwane

CouncillorMergan Chetty

Councillor Mzi Thebolla

Councillor

Mzwakhe Dladla

CouncillorJudith Lawrence

CouncillorVusi Ntshangase

CouncillorDumisani Lushozi

Councillor Zozo Dlamini

CouncillorHilton Storm

Councillor

Mazwi Msimang

Councillor

Rebecca Khanyile

Councillor

Dumisani Ngubane

Councillor

Pops Chetty

Executive Committee memberBill Lambert

Executive Committe member Mark Steele

Executive Committee member Dolo Zondi

Executive Committee member

Alpha Shelembe

Speaker

Sehla Ngubane

Council Whip

Gerrit Meyer

Executive Committee memberThokozani Dlamini

Executive Committee memberThemba Zungu

Executive Committee member Ntombizonke Mbatha

Executive Committee member

Mervin Dirks Deputy Mayor

Zanele HlatshwayoMayor

CITY GOVERNANCE

EXECUTIVE COMMITTEE

3

Thobani Zuma

Councillor

Musawenkosi Mchunu

Councillor

Rodger Ashe

Councillor

Les Naidoo

Councillor

Sibongiseni Majola

Councillor

Bonga Shozi

Councillor

Glenn McArthur

Councillor Sandile Gabela

Councillor

Sibusiso Mkhize

CouncillorPat Jaca

CouncillorManilal Inderjit

Councillor Msawenkosi Maphumulo

CouncillorMfaniseni Ngcobo

Councillor

Sibongile Mkhize

Councillor Candy Seymour

Councillor Najmah Ahmed

CouncillorSkhumbuzo Radebe

CouncillorFano Zuma

Councillor

Keith Olivier

CouncillorBukelani Zuma

Councillor Tu Zondi

Councillor Sizwe Mchunu

Councillor Truman Magubane

Councillor

Mtuza Mkhize

CouncillorBee Singh

CouncillorSiboniso Majola

Councillor Sipho Madondo

Councillor Sibusiso Ntuli

Councillor

Khethowakhe Khambule

CouncillorNomabhelu Duze

Councillor

Lindiwe Ngcobo

Councillor

Babu Baijoo

Councillor

Peter Green

CouncillorHloni Zondi

Councillor Thinasonke Ntombela

Councillor

Ntokozo Bhengu

Councillor

City Governance (Continued)

4

Integrated Development Planning

IDP is a process by which municipalities prepare 5 year strategic plans that are reviewed annually in consultation with communities and stake holders.These plans adopt implementation approach and seek to promote integra-

tion by balancing social, economic and ecological pillars of sustainability without compromising the institutional capacity required in the implementation, and by co-ordinating actions across sectors and spheres of government.

The Vision

Part of re-visioning the strategic direction of the City under the CDS proc-ess, the Vision was adjusted as following:

THE CAPITAL CITY OF CHOICE

The Vision Statement

By 2017 to be a Globally Competitive Metropolitan City of Choice which Capitalizes on its Strategic Location, Environment, Cultural Heritage and Educational Facilities Creating a Choice Quality of Life for All

Mission Statement

The Mission for Msunduzi Municipality to Facilitate the Provision of Serv-ices by:

• Community Participation• Social and Economic Development and Growth• Safety, Security and HIV/AIDS• Sustainable Service Delivery • Sound Finances • Sound Governance • Sustainable Environmental Management

City Guiding Principles

To underpin all development activities:

• Sustainability• Strategic Focus • Participation• Transparency • People Centred• Promotes Transformation• Customer Focused • Integration and Alignment• Democratic• Implementation Orientated• Accountability • Promote Co-operative Governance

THE CAPITAL CITY OF CHOICE

Msunduzi Budet

A municipality’s plan on how it intends to spend (expenditure) and raise funds (income).

Capital Budget

A plan of fi nance long-term outlays for fi xed assets and facilities such as (roads, houses, halls and etc.) and equipment (Vehicles,z Offi ce Machin-ery etc.).

Operational Budget

A plan to fi nance for short-term outlays such as offi ce materials and sala-ries.

5

The Municipality is committed to redressing and addressing the needs of the people and value the inputs from our communities. During the period May 2005 and 2006 and October 2005 and 2006, the IDP and the Mayor’s

offi ces held consultative forums and Izimbizo for the stakeholders and members of public in fi ve Area Based Management zones for 37 wards. An IDP template was distributed to the representatives of each ward and each community was re-quired to provide their IDP needs and minutes were recorded as well as ten inter-viewers were used to interview attendees whilst the meetings were conducted. In addition to these consultation meetings, a workshop for councilors was held on 30 April 2007 whereby councilors reviewed the community needs as refl ected on Izimbizo minutes and each ward councilor was requested to identify one priority per ward from Council funding for 2007/08; 2008/09 and 2009/10. This was done in addition to projects funded through grants. This was done to ensure that there was consultation between the municipality and the communities with re-gards to their needs and service delivery. The priorities of the community are categorised as follows:

Graphically this is represented as follows.

In ranking order therefore, based on the analysis conducted, the priorities of the community members are as follows:

The above priorities have guided the 2007/ 2008 Capital Budget Allocations, with particular reference to Council Funding.

This information can be summarized as indicating that among other things more than 80% of the budget must be provided to address access to basic services, socio-economic development, organisational transformation and the improve-ment of City Finances.

The budget has been aligned to the 7 priorities in terms of the Integrated De-velopment Plan (IDP) of the Council.

Major Projects

The table below provides an indication of the major projects to be under-taken by Council.

Aligning the Budget with the Community Needs

Major Programme / Project Amount

Community Services

New Hall - Ward 11 1,500,000

New Hall - Ward 5 1,500,000

New Hall - Ward 6 1,500,000

New Hall - Ward 20 1,500,000

Multi-purpose sports facility - Ward 3 2,000,000

Development of Hollywood Site - Ward 35 3,500,000

Replace Cremator No 2 - Northern 1,200,000

Development of Swimming Pool - Edn 1,500,000

Refurbish Sporting Facilities - Vulindlela 1,000,000

Upgrading Harry Gwala Stadium - Central 5,000,000

Lumpsum - Vehicles 15,000,000

Total 35,200,000

Infrastructure Planning & Survey

Transportation Plan: Central Area & Surrounding Area 800,000

Urban Traffi c Control System 3,000,000

Traffi c Signal Installation 400,000

Ottos Bluff Connor Road Investigation 500,000

Thermoplastic Road Marking 200,000

New England Road / N3 Upgrade 4,000,000

Total 8,900,000

Electricity

Pine Street refurbishment 10,000,000

Network Reinforcement/Replacement/Expansion 12,000,000

11kv Switchgear replacement (Primary sub-stations) 1,300,000

11kv Switchgear replacement (Secondary sub-stations) 1,000,000

Refubishment of 132kv transmission liness 3,000,000

Refubishment of 33kv transmission lines 1,000,000

Total 28,300,000

Construction and Reconstruction

Upgrading of Gravel Roads - Edn - Sitebhisini Rd - Mr7 To Railway 1,700,000

Upgrading of Gravel Roads - Edn - Unit T - T14/T15/T16 750,000

Upgrading of Gravel Roads - Edn - Ashdown - Dr Seme, Lembede Rd, Ndaba Rd 200,000

Upgrading Of Gravel Roads - Edn - Moscow - B22/B26/B27 400,000

Capital Mtce- Raisethorpe Canalisation 3,300,000

Desilting Sedimentation Basin 1,500,000

City Hall Rewriting 300,000

Prof Nyembezi Building 500,000

Total 8,650,000

Water & Sanitation

Copesville Sewerage Development 250,000

Shenstone Ambleton Toilets 1,500,000

Asset Condition Analysis 500,000

Total 2,250,000

Grand Total 81,050,000

The following projects are provided under 18.5 million from savings. Any additional funds will be borne by additional loans

Community Centre - Sweetwaters

Community Hall - Nadi

Community Centre - Nxamalala

Bridge - Eshowe

D1128 - District Road

D1126 - Tar Road

Electricity - Domestic

Community Hall

Electricity - domestic (ward 9)

Upgrade Road - Mafakathini

Sanitation (Sewerage) - Azalea

Shayamoya Road

Housing - Khalanyoni

Community Hall - France

Road - Willowfontein road (extension)

Sewerage Pipe - Unit 18 (Main Road)

Sewerage Pipe - Unit H

Community Hall - Unit BB

Access Roads & Servitudes

Tar - Martin’s Way Road

Roads - Ward 23

Hatcheries Park

Community Centre - Ward 26

Public Parking in CBD

Housing - Belfort

Slum Clearance - Ward 29

Canalization - Dolphin Avenue / Ishwari Road

Housing - Inhlalakahle

Sewerage Pipe - Site 11 (ward 32)

Housing Masukwana

Housing - Tamboville, Tembalihle & Q Section

Ward 35 - Break old structure and build workshops for small business

Taxi Rank - Lynnfi eld Park & Ashburton

Youth Centre - Dambuza Including Machibisa

Upgrading of Road Surfaces in Buffer Strip

CAPITAL ESTIMATES

TOTAL BUDGET

2006/07:R 176 million

2007/08:R 198 million

2006/07 2007/08

200

190

180

170

160

150

140

130

120

For, what is the important item in the Budget?

1. Infrastructure Services 54%2. Social & Economic Development 26%3. Sound Governance & Democracy 19%4. Sound Finances 1%5. Organizational Transformation 0%

6Capex 2007/2008 - Summary by Business Unit Capex 2007/2008 - Funding Sources

OPERATING ESTIMATES

Expenditure

The estimated operating budget for 2007/2008 is R 1,673,461,313 (2006/2007 R 1,508,239,267) million.

Salaries as a percentage of Income is budgeted at 32.43% (06/07 32.73 %). General and other expenses have increased over the prior year. R7.5 million

has been allocated for Vulindlela operating costs. Repairs and maintenance costs have been increased by some R 3.2 million over 2006/07 in order to allow for maintenance of Councils existing assets and infrastructure.

Signifi cant expenditure will be directed towards fi xing the number of potholes, resurfacing of roads, grass cutting on road verges and rehabilitation of the landfi ll sites.

Major increases in expenditure which have been provided for are Priority Posts (R 11 million), Leave Pay (R 10 million), Doubtful debts (R 10 million), Vacant Posts (R 20 million).

The table below provides a summary per expense category.

In Summary The Budget Can Be Refl ected As Follows

2006/07 2007/08

1800

1700

1600

1500

1400

1300

1200

1100

1000

TOTAL BUDGET

2006/07:R 1508 million

(Including disclosed adjustment)

2007/08:R 1673 million

(Including disclosed adjustment)

Operating Expenditure 2006/07 2007/08R’000 000 R’000 000

Salaries 440 489

General Expenditures 407 251

Bulk Purchases 469 528

Repairs & Maintenance 53 62

Departmental Changes 271 324

Contributions 91 80

Depreciation 127 93z

Interest 53

Lease 13

Charge Outs -350 -394

Capex 2007/2008 - Summary By Business Unit

Economic Development & Growth; 2.52%

Corporate Strategic Planning; 7.56%

Community Services & Social Equity; 25.75%

City Finance; 5.04%

Infrastructure Services & Facilities; 59.13%

City Finance

Community Services &Social Equity

Corporate StrategicPlanning

Economic Development &Growth

Infrastructure Services &Facilities

Capex 2007/2008 - Funding Sources

CNL60.47%

DOH14.01%

DPLG1.31%

DWAF0.25%

GIJIMA0.35%

MIG23.60%

CNL

DOH

DPLG

DWAF

GIJIMA

MIG

Operating Expenditure By Major Categories - 2007/2008

Salaries32.84%

Bulk Purchases35.46%

Depreciation6.23%

General Expenses16.85%

Interest3.57%

Lease0.89%

Repairs & Maintenance4.16%

Bulk Purchases

Depreciation

General Expenses

Interest

Lease

Repairs & Maintenance

Salaries

Operating Expenditure By Major Categories - 2007/2008

Income Sources 2007/2008

Other Trading; 2%

Rates; 24%

Sewer; 5%

Subsidies; 11%

Waste Management; 3%

Water; 12%

Other Income; 6%

Electricity; 36%

Fines; 1%

Electricity

Fines

Other Income

Other Trading

Rates

Sewer

Subsidies

Waste Management

Water

Income Sources 2007/2008

Allocation of Expenditure

7

Operating Estimates Summary 2007/ 2008

We have budgeted for a sur-plus of R 6,913,403 in 2007/2008 (R 8,156,668 for 2006/2007).

Major sources of revenue for the City are Electricity 36% (2006/07: 37%), Rates 24% (2006/07: 28%), Water 12% (2006/07: 13%) and Subsidies 11% (2006/07: 9%).

The equitable share allocation for The Msunduzi Municipality for 2007/2008 is R 142.8 million compared to the 2006/2007 amount of R 119.5 million. There has been an increase of R 23.3 million (19.5 %) over the last year.

The enhanced credit control procedures and revenue enhancement measures currently being applied in order to comply with the National Treasury income ra-tios are expected to reduce the outstanding debt.

In order to alleviate poverty, the Council will continue to support the provision of free basic services and reduce service charges and rates through an Indigent Support Program to the poorest sector of the population. In order to achieve this, a signifi cant portion of the Equitable Share has been allocated to providing, Zero rates for properties with a combined land & building value under R 30,000 (R 13.8 million), Sewerage for indigents (R 5.4 million), Refuse for indigents (R 5.1 mil-lion), Free Basic Electricity (R 5.8 million) and Water for indigents (R 47.5 mil-lion). The table below provides a further detail of the allocation of the equitable share in comparison to the 2006/07 year.

Revenue

INDIRECT ALLOCATIONS INCLUDE CONTRIBUTIONS TO THE PROVISION OF SERVICES AND INCLUDES CLINICS, REC

FACILITIES, HALLS, LIBRARIES, FIRE AND ROADS

8

Budgeting is a corner-stone of sound fi nan-cial management and

control and is the key legisla-tive process in ensuring the Municipality meets its objec-tives and developmental duties as laid out in Section 152 and 153 of the Constitution.

In accordance with its vision statement to achieve a fi nan-cially viable and sustainable Capital City of KwaZulu-Natal, and together with the objec-tives of fi scal stability and im-proved quality of life for all its residents, The Msunduzi Mu-nicipality’s budget represents the equilibrium between the needs of the community and affordability and sustainabili-ty.

During October 2006 a se-ries of izimbizo for the stake-holders and members of the

public were held in fi ve areas around the City. This process recognised numerous opportu-nities for the City and high-lighted outstanding challenges to be addressed. The Draft Budget for 2007/2008 has been drawn up taking into ac-count these opportunities and challenges.

The continued economic growth in the City combined with effective credit and budg-etary control measures imple-mented in the past year have made it possible to maintain our tariff increases for the 2007/2008 Draft Operating Budget at the same levels as the previous year.

The Draft Capital Budget has been set at R 198 million, of which R 120 million will be funded by external loan.

The budget will be fi nalised after the forthcoming public consultation process led by Mayor Zanele Hlatshwayo. Residents are encouraged to carefully study the draft budget and make constructive input at the fi ve upcoming izimbizo.

Taking into consideration that the budgeting process is not an isolated fi nancial proc-ess.

I wish to express thanks to Her Worship The Mayor, the Exco Councillors, the Speaker and Whip, Councillors, the Acting Municipal Manager Mr Rob Haswell, all Strategic Ex-ecutive Managers and all staff of the municipality for their input and support in the devel-opment of the 2007/2008

Message from Acting Chief

Financial Offi cer

Mr Roy BridgmohanActing Chief Financial

Offi cer

The Council has year on year steadily reduced the tariff increases for its people. The draft tariffs for 2007/08 are refl ected below.

RATES & TARIFFS

Loss of electricity and water due to theft and tampering remains a major challenge for the mu-nicipality. The lost revenue has a direct impact on service delivery and any reduction in these losses will ensure greater service delivery to all our citizens.

The Msunduzi Municipality is committed to providing a prosperous and sustainable future for its citizens. Underlying its commitment of hard work and good management are the principles of effi -cient budgeting and profi cient decision-making. It is with this in mind that the municipality believes that it has achieved the right balance in the compilation of its 2007-2008 budget.

External Grants

The table below provides a summary of External Grants as per the Division of Revenue Act, 2005 (Act No. 1 of 2005) promulgated on 14 April 2007 in Government Gazette

No. 27443.

Example of Account

2006/2007 2007/2008 Increase

Property Rates value - land R 50 000 198.05 209.93 6.0%

bldg R 100 000 103.99 110.23 6.0%

Basic 40 Amp MCB 107.60 112.00 4.1%

Consumption 498 units 104.88 109.06 4.0%

Water Basic 24.08 26.01 8.0%

Consumption 25 Kl 150.67 162.64 7.9%

Sanitation 71.37 76.37 7.0%

Refuse 46.17 49.4 7.0%

Vat 70.67 74.97 6.1%

Total 877.47 930.61 6.1%

Example of Account - Automatic Indigent

2006/2007 2007/2008 Increase


bldg R 14 000 0.00 0.00 0.0%

Electricity

Basic 20 Amp MCB 0.00 0.00 0.0%

Consumption 50 units 0.00 0.00 0.0%

Water Basic 0.00 0.00 0.0%

Consumption 25 Kl 150.67 162.64 7.9%

(Consumption in excess of 6 Kl @ full tariff)

Sanitation 0.00 0.00 0.0%

Refuse 0.00 0.00 0.0%

Vat 21.09 22.77 7.9%

Total 171.76 185.41 7.9%

Example of Account - Applied Indigent

2006/2007 2007/2008 Increase


bldg R 100 000 69.33 73.49 6.0%

( if income crite-ria met, 33 1/3% rebate applies)

Electricity

Basic 20 Amp MCB 24.40 25.40 4.1%

Consumption 498 units ( 50 units free) 94.35 98.11 4.0%

Water Basic ( 6 Kl free) 0.00 0.00

Consumption 25 Kl ( 7-12 Kl @ re-duced tariff)

122.47 132.22 8.0%

Sanitation Basic tariff 35.68 38.18 7.0%

Refuse Basic tariff 23.09 24.71 7.0%

Vat 42.00 44.61 6.2%

Total 543.35 576.67 6.1%

Mr Roy Bridgmohan

2007/2008 (R’000) 2008/2009 (R’000) 2009/2010 (R’000)

Equitable Share (Schedule 2) 142899 166588 217418

Recurrent Allocations (Schedule 6)

Local Govt. Finance Mgt. Grant 500 500 750

Infrastructure Allocations

MIG 58036 71693 81790

201435 238781 299958

2006/07 2007/08

Electricity - Lager Power Users 3% 3%

Electricity - Other Users 4% 4%

Water 8% 8%

Sewerage 7% 7%

Refuse 7% 7%

Rates 8% 8%

Tariff Increases

9

CREDIT CONTROL & DEBT COLLECTION

POLICY

PREAMBLE

WHEREAS Section 152 (1) (b) of the Constitution of the Republic of South Africa Act 108 of 1996 (‘the Constitution’) provides that one of the objects of local government is to ensure that the provision of services to communities occurs in a sustainable manner;

AND WHEREAS Section 153 (a) of the Constitution provides that a municipality must structure its administration, budgeting and planning processes to give priority to the basic needs of the commu-nity, and to promote the social and economic development of the community;

AND WHEREAS Section 195 (1) of the Constitution provides that the public administration must be governed by the democratic values and principles enshrined in the Constitution, including-

• The promotion of the effi cient, economic and effective use of resources;

• The provision of services impar-tially, fairly, equitably and without bias; and

• The fact that people’s needs must be responded to.

AND WHEREAS Section 4 (1) (c) of the Local Government: Municipal Systems Act 33 of 2000 (‘the Systems Act’) provides that the Council of a municipality has the right to fi nance the affairs of the municipality by charging fees for services, imposing surcharges on fees, rates on property and, to the extent authorised by national legislation, other taxes, levies and duties;

AND WHEREAS Section 5 (1) (g), read with subsection (2) (b), of the Sys-tems Act provides that members of the local community have the right to have access to municipal services which the municipality provides provided that, where ap-plicable and subject to the policy for indigent debtors, pay promptly for services fees, surcharges on fees, other taxes, levies and duties imposed by the municipality;

AND WHEREAS Section 6 (2) (c), (e) and (f) of the Systems Act provides that the administration of a municipal-ity must take measures to prevent corruption; give members of a local community full and accurate information about the level and standard of municipal services that they are entitled to receive; and inform the local community about how the municipality is managed, of the costs involved and the per-sons in charge;

AND WHEREAS Chapter 9, Sections 95, 96, 97, 98, 99 and 100, of the Systems Act provides for Customer Care Management, Debt Collection responsibility of the Municipality, contents of the policy, by-laws that give effect to the policy, Supervi-sory authority and Implementing authority.

The Msunduzi Municipality Coun-cil, at its meeting of 31 March 2006 adopted this policy to be known as “The Msunduzi Municipality Credit Control and Debt Collection Policy”.

1. DEFINITIONS

In this policy, unless the context indicates otherwise, the word or expression has the following meaning:

1.1 “Accounting Offi cer” The Municipal Manager appointed in terms of Section 82(1)(a) or (b) of the Municipal Structures Act, 1998 (Act No. 117 of 1998);

1.2 “Actual consumption” means the measured consumption of a consumer of a municipal service during a specifi ed period;

1.3 “Arrangements” means a formal agreement entered into between the Council and a debtor where specifi c repayment parameters are agreed to.

1.4. “Arrears” means any amount due, owing and payable by a customer in respect of a municipal account not paid on the due date;

1.5. “Average consumption” means the deemed consumption of a customer of a municipal service during a specifi c period, which consumption is calculated by add-ing the recorded monthly average consumption and the current actual consumption and dividing the total by 2;

1.6. “Bank guarantee” refers to an undertaking by a registered fi nancial institution whereby it guarantees a specifi ed maximum amount to be paid if the principal debtor (“the consumer”) fails to pay;

1.7. “Calculated amounts” refers to the amounts calculated by the Chief Financial Offi cer, in consul-tation with the relevant technical departments, to be due to the Council by a consumer in respect of the supply of the applicable municipal services for any period during which the exact quantity of the supply cannot be determined accurately for reasons beyond the control of the Chief Financial Offi cer. This shall normally be based on the average consumption fi gures, if available, for the service rendered to the customer or, failing the availability of such data, on the average consumption fi gures ap-plicable to one or more properties of similar size and nature in the area in which the customer resides or carries on business;

1.8. “Chief Financial Offi cer” refers to the person so designated in terms of Section 75(2)(a) of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) or any person duly authorised to act on behalf of such person and shall have the same meaning as Strate-gic Executive Manager: Finance or City Treasurer ;

1.9. “Consolidated account” refers to one combined account for all municipal services, housing rents and installments, rates and basic charges payable, and “consolidated bill” has a corresponding mean-ing;

1.10. “Consumer” means a customer;

1.11. “Conventional electricity and water meters” means electric-ity and/or water meters, as the case may be, which are used to determine the supply of electricity and water and which are normally read on a monthly or other fi xed interval basis;

1.12 “Council” refers to The Msunduzi Municipality and its successors in law and includes the Council of that municipality or its Executive Committee or any other body acting by virtue of any power del-egated to it in terms of legislation, as well as any offi cial to whom the Executive Committee has delegated any powers and duties with regard to this policy;

1.13 “Councillor” refers to any mem-ber of a municipal council;

1.14 “Credit Control” refers to all functions relating to the collection of monies owed by customers and users of municipal services.

1.15 "Customer” refers to any occupier of any premises to which Council has agreed to supply or is actually supplying services, or if there is no occupier, then the owner of the premises and includes any debtor of the municipality;

1.16 “Defaulter” refers to any cus-tomer who owes the Council arrear monies in respect of rates and / or service charges;

1.17 “Deposit” refers to a minimum sum of money specifi ed by the Chief Financial Offi cer and payable by the consumer to the Municipality prior to occupation of the property or prior to the date on which services to the property are required;

1.18 “Due date” in the absence of any express agreement in relation thereto between the Council and the customer, refers to the date stipulated on the account and determined from time to time as the last date on which the account must be paid;

1.19 “Equipment” refers to any build-ing or other structure, pipe, pump, wire, cable, meter, engine or any accessories;

1.20 “Estimated consumption” arises when no actual reading can be taken and is equivalent to the existing average consumption;

1.21 “Existing customers” refers to the customers who have already entered into an agreement for the supply of municipal services;

1.22 “Financial year” refers to the period starting from 1 July in a year to 30 June the next year;

1.23 “Implementing Authority” means the Municipal Manager or his nominee, acting in terms of Section 100 of the Local Govern-ment Municipal Systems Act, 2000 (Act No. 32 of 2000);

1.24 “Interest” is a charge levied with the same legal priority as service fees and calculated at a rate de-termined by Council from time to time on all arrear monies;

1.25 “Meter audits” refers to an investigation to verify the cor-rectness of the consumption and supply of electricity and water;

1.26 “Municipality” when referred to as:

(a) a corporate body, means a munici-pality as described in Section 2 of the Municipal Systems Act, 2000 (Act No. 32 of 2000);

(b) a geographic area means a mu-nicipal area determined in terms of the Local Government Municipal Demarcation Act, 1998 (Act No. 27 of 1998).

1.27 “Municipal Manager” means the person appointed as Municipal Manager in terms of Section 82 of the Local Government Municipal Structures Act, 1998, (Act No. 117 of 1998) and includes any person acting in that position or to whom authority has been delegated;

1.28 “Municipal services” refers to any services provided by the municipality or any authorised and contracted service provider, available or applied for, or provi-sion made for any service, for which it is entitled to charge a fee or formulate a tariff, payable by a customer or user, thereof;

1.29 “Normal offi ce hours” means the hours when the Chief Financial Offi cer’s offi ces are open to the public from Mondays to Fridays, excluding public holidays, Satur-days and Sundays;

1.30 “Offi cial” refers to an employee of The Msunduzi Municipality

1.31 “Occupier” means any person who occupies any property or part thereof, without regard to the title under which he or she occupies the property,

1.32 “Owner” means:

(a) The person in whom from time to time is vested the legal title to premises, which title is registered at the Deeds Offi ce;

(b) In a case where the person in whom the legal title is vested is insolvent or deceased, or is under any form of legal disability what-soever, the person in whom the administration of and control of such premises is vested as curator, trustee, executor, administrator, judicial manager, liquidator or other legal representative;

(c) In a case where the Council is unable to determine the identity of such person, a person who is entitled to the benefi t of such premises with a building thereon;

(d) In the case of premises for which a lease of 30 years or more has been entered into, the lessee thereof;

(e) In relation to-

i. A piece of land delineated on a sectional plan registered in terms of the Sectional Titles Act 1986, (Act 95 of 1986), and without restricting the above the developer or the body corporate in respect of the common property; or

ii. A section, as defi ned in such Act, the person in whose name such a section is registered under a sec-tional title deed and includes the lawfully appointed agent of such a person;

(f) Any legal person including but not limited to-

i. A company registered in terms of the Companies Act, 1973 (Act 61 of 1973), a Trust, a Closed Corporation registered in terms of the Closed Corporations Act, 1984 (Act 69 of 1984) and a voluntary association;

ii. Any department of State;iii. Any Council or Board established

in terms of any legislation ap-plicable to the Republic of South Africa;

iv. Any Embassy or other foreign entity;

1.33 “Premises” includes any piece of land, the external surface bound-aries of which are delineated on-

(a) A general plan or diagram regis-tered in terms of the Land Survey Act, 1927 (9 of 1927), or in terms of the Deed Registry Act, 1937 (47 of 1937); or

(b) A sectional plan registered in terms of the Sectional Titles Act, 1986 (95 of 1986), which is situated within the area of jurisdiction of the Council;

1.34 “Rates” refers to property rates on property situated in the mu-nicipal area, any other tax, duty or levy imposed by the municipality;

1.35 “Service agreement” refers to an agreement for the consumption of electricity and/or water and other services as determined from time to time;

1.36 ”Terminated account” refers to:

(a) the fi nal account for services after the customer has left the premises, whether or not the customer has given notice to terminate the sup-ply of service; OR

(b) the fi nal account for services if the customer has contravened the service provisions of this policy and attendant municipal bylaws;

1.37 “Variable fl ow-restricting device” refers to a device that is coupled to the water connection that allows the water supply to be restricted or closed;

1.38 “Visitation fee” refers to the fee charged for attendance and/or disconnection/reconnection of an electricity/water supply when the supply has been disconnected due to non-payment and/or tampering, or where access to disconnect/re-strict has not been gained, which fee shall be

1.39 “Voluntary garnishee order/emoluments order” refers to a court order for the deduction of an amount of money from the salary or other income of a customer.

2. INTRODUCTION

2.1. The City Council cannot develop the local economy and provide acceptable services to its residents unless it receives payment, in full, of all bills raised for the services that it provides.

2.2. The municipality must develop, maintain and implement a credit control and debt collection policy that is consistent and complies with the relevant legislation.

2.3. In regard to payments expected from registered indigents and Council tariffs, this policy is to be read in conjunction with The Msunduzi Municipality Indigent Policy and The Msunduzi Munici-pality Tariff Policy.

3. OBJECTIVES

The objectives of the Credit Control and Debt Collection Policy are:

3.1 To defi ne a framework within which the municipality can de-velop an effective procedure to bill and collect its revenues;

3.2 To ensure that all monies due and payable to the municipality are collected and used to deliver municipal services in the best in-terests of the community, residents and ratepayers and in a fi nancially sustainable manner as prescribed by the Municipal Systems Act, 2000 (Act No. 32 of 2000), and other applicable legislation;

3.3 To maintain and implement a credit control and debt collection policy, which is consistent and complies with Section 97 of the Municipal Systems Act, 2000 (Act No. 32 of 2000).

3.4 To ensure that the municipality develops credit control procedures and mechanisms that are con-sidered to be consistent, fair and effective to all its consumers.

4. UNDERLYING PRINCIPLES OF THIS POLICY

4.1 The administrative integrity of the municipality must be maintained at all times. The democratically elected councillors are responsible for policy-making, while it is the responsibility of the Councillors, Municipal Manager and all staff to ensure the execution of these policies.

4.2 This policy shall take effect and be enforceable from the date of approval thereof by Council.

4.3 The collection process must be cost-effective and enforcement of payment for services rendered must be prompt, consistent and effective.

4.4 Unauthorised consumption, con-nection and reconnection, the tampering with or theft of meters, service supply equipment and the reticulation network and any fraudulent activity in connection with the provision of municipal services will lead to disconnections and/or restrictions, penalties, loss of rights and criminal prosecu-tions.

5 ROLE AND RESPONSIBILITY OF MUNICIPAL MANAGER

5.1 In terms of Section 100 of the Municipal Systems Act, 2000 (Act No. 32 of 2000), the Municipal Manager is responsible for imple-menting the credit control and debt collection policy. In line with this, the Municipal Manager is to perform the following:

5.2 install and maintain an appropri-ate accounting system.

5.3 bill customers.

5.4 demand payment on due dates.

5.5 raise penalties and interest for defaulters.

5.6 appropriate payments received.

CREDIT CONTROL AND INDIGENT POLICY GUIDELINES

105.7 collect outstanding debt.

5.8 provide different/alternate pay-ment methods.

5.9 determine credit control and debt collection measures.

5.10 determine all relevant work procedures for, inter alia, public relations, arrangements, discon-nection/reconnection of services, summonses, attachments of assets, sales in execution, write-off of debts, sundry debtors and legal processes.

5.11 instruct attorneys to proceed with the legal process (i.e. attachment and sale in execution of assets, emolument attachment orders, etc.).

5.12 appoint staff to execute Council's policy and by-laws.

5.13 determine internal control proce-dures.

5.14 monitor contracts with service providers in connection with credit control and debt collection.

5.15 The Municipal Manager may del-egate these responsibilities to the Chief Financial Offi cer. However, this delegation does not absolve the Municipal Manager from being held accountable for implementing this policy.

5.16 The Municipal Manager is to report monthly to the Executive Commit-tee, and quarterly to the Council, on the actions taken in terms of this policy, and on the payment levels for the periods concerned.

5.17 Although the Municipal Manager is held accountable for implementing this policy, it is the responsibility of all offi cials of the municipality to promote and support this credit control and debt collection policy.

6 . ROLE AND RESPONSIBILITY OF COUNCILLORS

6.1 To approve budgets consistent with the needs of communities, ratepayers and residents.

6.2 To impose rates and taxes and to determine service charges, fees and penalties to fi nance the bud-get.

6.3 To facilitate suffi cient funds to give access to basic services for the poor.1

6.4 To provide for a bad debt provi-sion, in line with the payment record of the community, ratepay-ers and residents, as refl ected in the fi nancial statements of the municipality.2

6.5 To, together with the Chief Financial Offi cer, set an annual improvement target for debt col-lection (refer Section 9), in line with acceptable accounting ratios and the ability and performance of any appointed external service providers.3

6.6 To approve a reporting framework for credit control and debt collec-tion.

6.7 To consider and approve by-laws to give effect to the Council's policy.

6.8 To revise the budget should Council's targets for credit control and debt collection not be met.

6.9 To take disciplinary and/or legal action against Councilors, offi cials and agents who do not execute Council policies and by-laws, or act improperly in terms of such policies.

6.10 To approve a list of suitably quali-fi ed service providers that will act on behalf of Council in all collec-tion and legal matters relating to debt collection.

6.11 To provide suffi cient capacity in the Municipality’s Finance Busi-ness Unit for credit control and debt collection or, alternatively, to appoint service providers or debt collection agents to assist with the credit control and debt collection procedures.

6.12 To assist the Municipal Manager in the execution of his duties, if and when required.

6.13 To provide funds for the training of staff in connection with credit control and debt collection.

6.14 In terms of Section 99 of the Mu-nicipal Systems Act, 2000 (Act No. 32 of 2000), the Executive Com-mittee, is to monitor and supervise the application of this policy, and is to report to Council on the extent and success of the municipality’s credit control actions.

6.15 In order to maintain the cred-ibility of the municipality in the implementation of the present policy, Councillors, by adopting this policy, pledge that their own accounts will at no stage fall into arrears.

7 DUTIES AND FUNCTIONS OF WARD COUNCILORS

7.1 To adhere to and convey Council policies to residents and ratepay-ers.

7.2 To adhere to the Code of Conduct for Councillors.

7.3 The ward committees will act in terms of roles and functions as approved by Council.

7.4 The ward committees are encour-aged to actively promote this policy, and to ensure, at the same time, that the municipality’s customer service is of a standard acceptable to the community.

8. DUTIES AND FUNCTIONS OF COMMUNITIES, RATEPAYERS AND RESIDENTS

8.1 To fulfi ll certain responsibilities, as brought about by the privilege and or right to use and enjoy public facilities and municipal services.

8.2 To pay service fees, rates on prop-erty and other taxes, levies and duties imposed by the municipal-ity on or before the due date for payment.

8.3 To observe the mechanisms and processes of the municipality in exercising their rights.

8.4 To allow municipal offi cials ac-cess to their property to execute municipal functions.

8.5 To comply with the by-laws and other legislation of the municipal-ity.

8.6 To refrain from tampering with municipal services and property.

9. EXPECTED DEBTOR PAYMENT LEVELS

9.1 The municipality is to aim at ensuring that payment levels (i.e. the percentage level of income received from debtors) for the present and future fi nancial years, in respect of all amounts due to the municipality, exclusive of the balance of the monthly accounts payable by registered indigents, are maintained at an annual aver-age of at least 95%.

9.2 The long-term target is a debtor turnover ratio of 30 days, that is, debtors are expected to pay for services on average within one month of receiving accounts.

10. AREA OF APPLICATION

10.1 This policy shall apply and be enforceable throughout the entire area of jurisdiction of The Msun-duzi Municipality

10.2 The Council reserves the right to differentiate between different categories of consumers, debtors, services or service standards when applying this policy. The Council will, on application of this policy, avoid discrimination as forbidden by the Constitution unless it is established that the discrimination is fair as allowed by the Constitu-tion.

11. APPLICATION FOR SERVICES AND SERVICE AGREEMENTS

11.1 Before being provided with electricity, water and/or other customer services, and prior to taking occupation of premises, every customer shall enter into a service agreement with the Council in which, inter alia, the customer agrees that the electricity, water and/or other services, supplied by either Prepaid or Credit meter systems, may be used for credit control purposes to collect arrears in respect of all outstanding debt.

11.2 All consumers wishing to utilise municipal services must apply to enter into a service agreement.

11.3 The service agreement will be en-tered into prior to the provision of services and prior to the consumer taking occupation of the premises.

11.4 A new service agreement will only be entered into once all amounts owed by a consumer on other debtor accounts are settled in full.

11.5 A new service agreement will only be entered into on a property, once all outstanding amounts owed on the property are settled in full.

11.6 Where municipal services are used/consumed or made use of, and the owner, tenant, or occupants of a property, have not entered into nor completed an agreement for such services, the owner responsible for the payment of rates on the prop-erty will be billed for the metered consumption and all municipal service charges applicable to the property.

11.7 The service agreement shall indicate that transfer of a property may not be registered until the municipality issues a clearance certifi cate which refl ects that all amounts due in connection with that property for municipal service fees, property rates and other municipal taxes, levies and duties during the two years preceding the date of application for the certifi cate, have been fully paid. In addition to the above where the debt on a property exceeds two years and a clearance is issued, a letter of undertaking be provided to Council providing for full settle-ment of the outstanding debt on transfer.

11.8 Application forms are available at the municipal offi ces and the application process must occur at least ten (10) working days prior to taking occupation of the prem-ises. This will ensure that services are available when occupation is taken. Failure to adhere to the timeframe may result in customers not having the services available when occupation is taken. Once the application has been approved, a service agreement will be entered into and services will commence.

11.9 The Municipality will render the fi rst account after the fi rst meter reading cycle following the date of signing the service agreement or as soon as is administratively possible.

11.10 Consumers who illegally consume services without a valid service agreement will be subject to dis-connection and/or removal of the service and may have charges laid against them for theft and fraud.

11.11 The service agreement shall set out the conditions under which the services are provided and shall require the signatories thereto to accept the contents of the municipality’s credit control and debt collection policy, as well as the provisions of the Municipal Systems Act, 2000 (Act No. 32 of 2000).

(a) An undertaking by customers:

• That the electricity, water and/or other services supplied by either the Prepaid or Credit meter sys-tems, may be used for credit con-trol purposes to collect arrears in respect of all outstanding debt and shall include rates if the customer is the owner of the property;

• That they are liable for the costs of collection, including any administration fees, penalties for late payment, legal costs, interest,

disconnection fees and reconnec-tion fees, and

• That any alleged non-receipt of an account does not affect the custom-ers liability for the account, nor stop the credit control process;

(b) An undertaking by Council:

• That it will deliver accounts to customers.

• That if customers do not receive an account and have accordingly requested one, a statement will be supplied to them.

11.12 Where a signatory is not the owner of the property to which the services are to be provided, a letter from the owner indicating that the signatory is the lawful oc-cupant of the property and where a lessor/lessee arrangement exists between the parties, a copy of such agreement shall be attached to the service agreement.

11.13 Where a consumer has failed to enter into a service agreement with the Council, water and/or electricity shall be restricted or disconnected, as the circumstances may require, until such time as a service agreement has been entered into and the applicable deposits have been paid. In such circumstances, the consumer will be held liable for any calculated amounts.

12. DEPOSITS AND GUARANTEES

12.1 Every customer, other than those who are the registered owners of the property, is to pay a deposit on application for the provision of municipal services before the municipality renders any service to the property. Deposits are payable when new customers sign service agreements and when existing customers move to a new supply address. All deposits shall be paid at least 10 (ten) days prior to oc-cupation of the property or prior to the date on which the services are required, if not required on date of occupation. Failure to comply with this clause may result in a delay in the connection of services and the Council shall not be liable for any loss or prejudice suffered by a customer as a result thereof.

12.2 Subject to the provisions of clauses 12.3, 12.4 and 12.5 hereunder, the calculation for deposits shall be based on two months’consumption of metered services together with any charges for other municipal services, or a minimum amount specifi ed by the Chief Financial Offi cer from time to time.

12.3 In determining the deposit de-scribed in Section 12.2, the Chief Financial Offi cer may differentiate between areas to give cognisance to differences in service standards and usage.

12.4 The Chief Financial Offi cer may re-assess customer deposits for new domestic, commercial and indus-trial customers three months after the initial deposit date and may, as a result of this reassessment, require an additional deposit from the customer.

12.5 The Chief Financial Offi cer may review deposits annually and, in the case of a customer’s service being disconnected or restricted as a result of non-payment or tam-pering, may increase the deposit. Should the deposit be increased as a result of this review the customer must immediately make payment of the increased amount in line with the instruction from the Chief Financial Offi cer.

12.6 The outcome of the review con-templated in clause 12.5 shall be communicated to the customer in the event of any variation in the deposit arrangements being required.

12.7 Should a customer’s services be disconnected twice during any twelve-month period due to non-payment, the customer’s deposit shall be adjusted the following month to conform to Clause 12.5.

12.8 Bank guarantees are only permit-ted for businesses and only under circumstances as determined by Council from time to time.

13. ACCESS TO PROPERTY TO READ METERS

13.1 In terms of Section 101 of the Municipal Systems Act, 2000 (Act No. 32 of 2000), the occupier, owner or tenant of a property is to allow municipal offi cials or the municipality’s authorised service providers access to read meters, install or repair meters as well as to, discontinue or restrict the provision of a service. The offi cial is to have the proper authorisation and can only request access during reasonable hours.

13.2 If the municipality is unable to read any meter on any property be-cause the meter has been rendered inaccessible, the municipality shall estimate the consumption of the service concerned and thereafter bill the accountholder for the monetary value of such estimated consumption.

13.3 In the event that the Council continues to be unsuccessful in ob-taining access to the property and, therefore, is unable to obtain an accurate meter reading, the Chief Financial Offi cer or his authorised representative may disconnect the supply via the Consumer Distribu-tion Unit (CDU).

13.4 Voluntary readings:

• These will be permitted provided the municipality obtains any fi nal reading should the consumer move to another supply address.

• Consumers may be liable for a fee to cover the costs of obtaining a reading if no advance warning is given and special arrangements are required to obtain a reading.

• The Municipality is entitled to make suitable adjustments to the readings should a consumer fail to ensure that a fi nal reading is obtained.

• An audit reading during the normal reading cycles must be obtained at least once every 12 months. If a special audit reading becomes necessary this will be done at the cost of the consumer.

• The consumer may elect to sup-ply voluntary readings subject to compliance with these rules. The Chief Financial Offi cer may, how-ever, cancel the voluntary reading convenience if the consumer fails to render readings on two or more consecutive occasions .

14. ACCOUNTS, BILLING AND PAYMENT

14.1 The Council shall produce and post one consolidated monthly bill to consumers for services supplied or available (inter alia, electricity, wa-ter, refuse and sewerage charges) and for rates levied on property within the municipal area unless, for whatever reason, the rates account has not been consolidated with the services account in which case separate monthly accounts will be posted. These accounts will be produced in accordance with meter reading cycles at regular intervals or as prescribed by law. In the case of indigents where the net account after rebates amounts to zero, these will only be posted bi-annually and not on a monthly basis.

14.2 The account/invoice will refl ect the following details:

• Consumer name;

• Consumer account number;

• Consumer postal address;

• Residence/Erf details to which the services have been supplied;

• The consumption or estimated consumption for each metered service within a specifi ed period;

• The applicable service tariff;

• The monthly amount due on property rates and the total annual amount due;

• The valuation of the property;

• The amount due on any other service charges;

• The total amount due and pay-able;

• The amount in arrears, if any;

• The fi nal date for payment (due date);

11 • The method, name and location of

any municipal offi ces and autho-rised agents where payments may be made, and

• A notifi cation that failure to settle the total amount due by due date will result in termination or restric-tion of services.

14.3 The Council shall undertake to post the consolidated account to the customer address, in South Africa, as specifi ed by each cus-tomer. However, non-receipt of an account does not negate the responsibility of the customer to pay the amount owing by due date nor prevent interest charges and debt collection procedures. In the event of non-receipt of an account, the onus rests on the account holder to obtain a free copy of the most recent account, before the due date.

14.4 The consumer shall, in writing, notify the Council of any change of address, including an e-mail address, and contact details. Notwithstanding the fact that a consumer has not received an ac-count as a result of his failing to notify the Council of his change of address or due to delays on the part of external service providers, the customer is nevertheless liable for payment of such account. Any change of address only becomes effective when the notifi cation of the change is received and acknowledged by the Council.

14.5 Accounts must be paid in full on or before the due date as indicated on the account. Failure to comply with this section shall result in debt collection action (as contained in Section 27 of this policy) being instituted against the customer. Interest on arrears, at the rate determined from time to time by the Council or, in the absence of any determination, as prescribed by law, will accrue after due date if the account remains unpaid irrespective of the reason for non-payment (refer Section 18).

14.6 Bulk consumers may at the discre-tion of Council be notifi ed of their unpaid accounts prior to the com-mencement of the debt collection process.

14.7 Payments for accounts must be re-ceived at a Municipal pay-point by close of business on or before the due date. In the case of any elec-tronic payments the money must be received in the municipal bank account no later than the close of business on the due date. In the case of monies paid to agents, the money must be deposited with the agent prior to the close of business on due date and proof thereof may be required to validate any claims.

14.8 The following methods of payment and payment points can be used:

• Debit order payments, which forms are available from the municipal cash offi ces;

• Cash and cheque payments can be made at the municipality’s cash of-fi ces, any South African Post Offi ce and their agencies, First National Bank and Easypay Outlets e.g. Pick & Pay, Checkers, etc.

• VISA and MASTERCARD credit card payments can be made at the municipality’s cash offi ces;

• Electronic banking payments directly into the municipality’s account;

• Post;

14.9 The consumer acknowledges that any agent used for transmitting payments to the Municipality is at the risk and cost of the consumer. In addition the consumer must take into account the transfer time of the particular agent.

14.10 All payments and/or part-pay-ments received by the Chief Financial Offi cer shall be allocated to services in the manner as con-tained in Section 20.

15. METERING OF CONSUMABLE SERVICES

15.1 The municipality may introduce various metering equipment for the measurement of service con-sumption and customers may be encouraged to convert to a system preferred by the municipality.

15.2 Customers who default (fail to pay by the due date) may be required by the municipality to convert to another metering system.

15.3 Meters (credit) will be read in monthly cycles, at regular intervals or as prescribed by Council. Should circumstances prevent such a read-ing, the Municipality is entitled to continue with the procedure as laid down in Section 13 of this policy.

15.4 A consumer is responsible to ensure access to metering equipment and will be liable for any cost incurred to ensure access (such as relocat-ing or disconnecting the meter) if satisfactory access is not possible.

15.5 Routine or special maintenance of metering equipment will be com-municated to the consumer prior to being undertaken in order to establish a suitable time to perform such maintenance.

16. VALUATION OF PROPERTIES

16.1 All properties within the boundar-ies of the Msunduzi Municipality are to be valued in terms of the legislation applicable to the valu-ation of properties for the purpose of levying property rates.

17. PROPERTY RATES

17.1 In terms of the Council Rates Policy and in accordance with the Tariff of Charges Schedule, Property Rates will be raised and charged on a monthly basis and will be refl ected on the Councils monthly bill.

17.2 All Property Rates not paid by due date will, in addition to any pro-cedures as prescribed by law, be subject to credit control and debt collection procedures as stipulated in this policy.

18. INTEREST ON ARREARS AND OTHER PENALTY CHARGES

18.1 Interest shall be charged for a full month on all arrear amounts at the percentage determined by Council irrespective of when payment is made.

18.2 For purposes of determining arrear amounts, all amounts that are unpaid after due date, excluding interest, penalty charges previously raised including collection charges and Value Added Taxation, shall be taken into account.

18.3 The Chief Financial Offi cer will be entitled to raise the following charges in addition to the interest charge contemplated in clause 18.1:

• in the case of arrear rates, a col-lection charge equal to 10% will be raised on all arrear rates instal-ments, after the last working day of the second month succeeding the fi nal date for payment of the twelfth monthly instalment.

• charges for disconnection or restriction of services

• charges for reconnection or rein-statement of services

• charges for notices of default and other correspondence

• penalty charges for illegal recon-nections

• penalty charges for dishonoured cheques

18.4 Other than those penalty charges prescribed by legislation, the value of each of these charges will be determined on an annual basis by Council when considering its an-nual budget and shall be contained in the Msunduzi Municipality Tariff Register.

19. AGREEMENTS AND ARRANGEMENTS FOR PAYMENT OF ARREAR ACCOUNTS

19.1 The Chief Financial Offi cer is authorised to enter into agree-ments with customers in arrears with their accounts and to grant customers extensions of time for settlement of the amounts due to Council.

19.2 Where a customer in arrears is a business or commercial concern, a minimum of 50% of the total over-due amount, as an initial payment, shall be paid, and the balance of

the account shall be paid in equal installments over a maximum pe-riod of twelve months. Any future monthly current accounts shall be paid on or before the due dates for the month in question. In respect of business or commercial consum-ers who are in arrears, interest will be raised in terms of Section 18 of this policy.

19.3 Where a customer in arrears is a domestic consumer, 10% of the total overdue balance or the current account, whichever is the greater, as an initial payment, shall be paid, and the balance of the account shall be paid in equal installments over a maximum pe-riod of twelve months. Any future monthly accounts shall be paid on or before the due date. Consumers who honour their agreements and arrangements to pay, will not be charged interest from the date of the agreement on municipal service arrears, with the exception of rates arrears where statutory provisions may apply. Should they default on their credit extension for whatever reason, interest shall be raised from the date of default on the full outstanding debt in terms of Section 18 of this policy.

19.4 A consumer may be required to complete a debit order for the payment of arrears in terms of the agreement.

19.5 Should a customer breach the ar-rangement in any way, the balance of the arrear account, together with the balance of interest outstanding on the account, shall immediately become due and payable to the municipality.

19.6 A customer who fails to comply with any credit arrangement shall not be permitted to enter into any further arrangement or extension of time for payment and shall have his services terminated, however a customer who brings his credit arrangement up to date by an immediate payment shall have his services reconnected as soon as is practically possible.

19.7 A customer who fails to comply with any arrangement of debt shall have his service agreement terminated, services discon-nected/restricted, and his deposit and interest on any outstanding amounts set off against any arrear debt.

19.8 Only debtors with positive proof

of identity or an authorised agent with a Power of Attorney shall be permitted to enter into an Ac-knowledgment of Debt agreement with the Council.

19.9 Where a debtor is a close corpora-tion, trust, or a company, the per-son who signs an acknowledgment of debt on behalf of such close corporation, trust or company, shall produce written proof that he is authorised to sign such acknowledgment on behalf of all members and/or directors of the close corporation, trust, or the company.

19.10 An Acknowledgment of Debt agreement shall contain all ar-rangements for paying off arrear accounts, which may include inter-est. One copy of the agreement shall be handed to the customer and another fi led with the Chief Financial Offi cer.

19.11 In instances where a customer is employed, the municipality may obtain a voluntary garnishee order or emoluments attachment order.

19.12 Where any debt has arisen as a re-sult of the Council having applied an incorrect charge and/or tariff, the consumer may arrange to pay the debt over a maximum period equivalent to the period over which the incorrect charge was applied or over twelve months, whichever is the shorter.

20. ALLOCATION OF PAYMENTS AND PART-PAYMENTS

20.1 Receipt of the total outstanding monies will be allocated to the credit of the account in full. If a debtor pays only part of any amount due, the Chief Financial Offi cer shall allocate such payment as follows:

• fi rstly, to any unpaid interest raised on the account;

• secondly, to any other sundry debtors (miscellaneous);

• thirdly, to housing rents and installments;

• fourthly, to any unpaid refuse col-lection charges;

• fi fthly, to any unpaid sewerage charges;

• sixthly, to any unpaid water charges;

• seventhly, to any other unpaid electricity charges; and

• lastly, to any unpaid property rates.

20.2 A customer shall not be entitled to allocate any payment made to any portion of the total debt due to the Council.

21. DISHONOURED AND OTHER UNACCEPTABLE CHEQUES/DEBIT ORDERS

21.1 Refusal by banks to honour payments by cheque or debit order is regarded as non- pay-ment, upon which the relevant debtor is subject to credit control measures.

21.2 The Council shall, at the earliest opportunity, be entitled to discon-nect or restrict, as the case may be, the electricity and/or water supply of a customer who has offered a cheque or debit order as payment for municipal services if such cheque or debit order is returned or dishonoured by the fi nancial institution on which it is drawn as a result of a lack of funds or for any other reason.

21.3 A customer tendering a cheque or debit order referred to in Clause 21.2 shall be liable for all admin-istration charges and bank fees as determined by Council as a result of such transaction.

21.4 Should a dishonoured cheque or debit order be received, the cus-tomer may be contacted telephoni-cally with the request that a cash deposit equal in amount to that of the dishonoured cheque be made into the municipality’s account within 24 hours.

21.5 Should any attempt to contact the customer fail, then the municipal-ity shall immediately discontinue the supply of services to the prem-ises.

21.6 In the event of the customer not having suffi cient funds to settle the outstanding debt, the Municipality may open a case of fraud with the South African Police Service.

21.7 Dishonoured cheques are to be kept on fi le and will only be given to account holders on request if the account is paid up to date after the reversal of the dishonoured payment.

21.8 A customer who has offered three dishonoured cheques in any 12 month period will not be allowed to make further payments by cheque for a period of at least one year, although a bank guaranteed cheque may be accepted by the Chief Financial Offi cer.

22. QUERIES IN RESPECT OF ACCOUNTS

22.1 The enquiries counters at the municipality’s service centres can be contacted for all account queries.

22.2 An enquiry clerk stationed at the municipality’s service centres shall be available to assist consumers with account balance queries as well as the opening and closing of accounts.

22.3 Any resident or consumer who may feel aggrieved concerning his/her account may address a written grievance / appeal to the Chief Financial Offi cer.

22.4 The municipality endeavors to investigate any query and give feedback within fourteen working days of the receipt of the query.

22.5 Any query in respect of the amount due and payable on the consolidat-ed bill must be lodged, in writing, at the municipality within 10 days

of the consolidated bill date in order that it may be investigated. Should the query not be lodged within 10 days, the municipality cannot be bound to the provisions of clause 22.4.

22.6 A customer who has lodged an enquiry is not relieved of the responsibility to maintain regular payment on his account. In the event of an accountholder reason-ably querying any item or items on the monthly municipal account, no action shall be taken against the accountholder provided the accountholder has paid, by due date, an amount equal to the monthly average monetary value of the three most recent un-que-ried accounts in respect of the service under query, as well as all un-queried balances on such ac-count, and, provided further that, such query is made in writing by the accountholder or is recorded in writing by the Chief Financial Of-fi cer or his designate on behalf of the accountholder within 10 days of the consolidated bill date.

22.7 If a customer has received a response to a query but is still not convinced that the account is correct, the customer will still be liable for the full outstanding amount and will be subject to credit control action.

23. UNRESOLVED CUSTOMER QUERIES

23.1 Should a query remain unresolved after 14 working days have passed from the date the query was lodged, the customer is to notify the Section Head of the relevant section who will follow up and resolve the query.

23.2 Should the Section Head, as a re-sult of the complexity of the case, be unable to resolve the query, it is to be referred to the Consolidated Billing Manager for resolution.

24. DISCONNECTIONS/RESTRICTIONS OF SERVICE

24.1 The Council shall disconnect/re-strict services to consumers whose consolidated accounts remain unpaid after due date.

24.2 The municipality shall, prior to disconnection and/or restriction of services, not be obliged to issue any fi nal demand notices or other reminders to customers whose ac-counts are unpaid after due date.

24.3 The municipal account shall refl ect a warning message that shall be deemed to be proper and suffi cient notice to the customer that his services may be disconnected or restricted unless payment is received on or before due date.

24.4 In the event that full payment of the consolidated account, includ-ing any accumulated arrears, is not received by close of business on due date, the electricity supply and thereafter the water supply may be disconnected/restricted, unless a formal arrangement for an extension of payment, in terms of Section 19, has been approved by the Chief Financial Offi cer or his authorised representative.

24.5 Even though a customer may have concluded satisfactory credit arrangements in terms of Section 19, the Council is not obliged to effect a reconnection of services on the day that payment is received or the agreement has been signed, but will, unless unable to do so because of circumstances beyond the control of the municipality, endeavour to do so within three (3) working days in terms of Sec-tion 26 read in conjunction with Section 25.

24.6 Where a customer’s services are disconnected, or where access to disconnect services has not been obtained, the customer shall be charged a visitation fee, as deter-mined by the Council, which shall be paid prior to the services being reconnected.

24.7 Where a customer’s account and/or service agreement has been terminated or is in arrears and no credit arrangement has been en-tered into, the Council may, at the customer’s cost, proceed to collect such amount as is outstanding and due in terms of the procedures

12for debt collection contained in Section

27 of this policy.

24.8 Where a customer or owner’s ac-count is in arrears and no credit arrangement for the settlement of any outstanding debt has been entered into, and, whether the services to the property have been disconnected / restricted or not, the Council may, regardless of whether the service agreement is terminated or not, implement the procedures for debt collection as set out in Section 27 of this policy, if such action is deemed by the Chief Financial Offi cer to be in the best interests of the Council.

24.9 Should the Chief Financial Offi cer be of the opinion that the termina-tion of services, in respect of which the account is in arrear, could result in the endangerment of the life of any person, the Chief Financial Offi cer may appropriately restrict rather than terminate the services in question.

25. RECONNECTION/REINSTATEMENT OF TERMINATED/RESTRICTED SERVICES

25.1 Services which have been ter-minated or restricted shall be reconnected or reinstated by the municipality only when all the fol-lowing conditions have been met:

• the arrear account has been paid in full, including the interest raised on such account; or an acceptable arrangement has been entered into with the municipality for the payment of the arrear account, including the interest raised on such account; or a query, as contemplated in Section 22, has been resolved and arrangements for payment as approved by the Chief Financial Offi cer have been concluded;

• a revised/existing service agree-ment has been entered into/re-instated with the municipality, as contemplated in Section 11 of this policy; and

• a suitable cash deposit, as de-termined by the Chief Financial Offi cer in terms of Section 12, has been paid to the municipality.

25.2 Where consumers using prepaid meters have arrear amounts in respect of other services rendered by the municipality the Council shall allocate fi fteen (15) percent of any future prepaid purchases to arrear amounts until such time as the arrears have been brought up to date.

26. PERIOD FOR RECONNECTION OR REINSTATEMENT

26.1 The municipality shall endeavour to reconnect or reinstate termi-nated or restricted services within 3 (three) working days after the date on which the conditions set out in Section 25 of this policy have been met, unless unable to do so because of circumstances beyond the control of the municipality.

27. PROCEDURE FOR DEBT COLLECTION AND WRITE OFF

Where consumer accounts are in arrears, the Chief Financial Offi cer is authorised to institute the following procedures with the intention of proceeding until the debt is collected or written off:

27.1 Immediately after due date, dis-connect and/or restrict all water and/or electricity services for all overdue amounts relating to rates, service charges or any charges for services rendered by the municipal-ity in terms of the procedures laid down in Section 24 of this policy;

27.2 Thirty days after the due date:

• Tracing action may be authorized and instituted if the whereabouts of the debtor is unknown.

27.3 Sixty days (or any earlier period if the Chief Financial Offi cer deems that it is in the best interest of the Council) after the due date, and where an account rendered to a customer remains outstanding, the

following action may be taken:

• All arrear amounts shall be handed over to the Council’s debt collec-tion agents.

• The collection agents will then make use of normal debt collection procedures including a call centre approach and legal processes to collect the amounts owed to Council

• If necessary, the sale in execution of such property to recover arrear property rates and service charges will be instituted (if the accoun-tholder is also the owner of the property).

• All legal expenses incurred by the municipality shall be for the ac-count of the defaulting customer.

27.4 The Chief Financial Offi cer may insist that a consumer, who is utilising a credit meter, convert from that credit metered supply to a prepayment supply. The cost of such a conversion is to be borne by the consumer.

27.5 The Chief Financial Offi cer may allocate up to fi fteen (15) percent of any payment for prepayment services to arrear debt.

27.6 The Chief Financial Offi cer may order that emolument attachment or garnishee orders be instituted on debtors’ salaries.

27.7 The Chief Financial Offi cer may withhold rates clearance certifi -cates in terms of Section 118 of the Municipal Systems Act, 2000 (Act No. 32 of 2000) and Section 30 of this policy.

27.8 The Chief Financial Offi cer may withhold payments of grants-in-§aid to consumers whose accounts are in arrears.

27.9 The Chief Financial Offi cer may withhold payment to suppliers whose accounts are in arrears in terms of the Supply Chain Man-agement policy.

27.10 The Chief Financial Offi cer may withhold/reject the approval of building plans relating to improve-ments on properties if there are arrears on that property.

27.11 Whenever all the legal avenues and procedures listed above have been exhausted, or it becomes uneconomical to proceed further, the arrear amounts should be clas-sifi ed as irrecoverable and should be written off.

27.12 The Chief Financial Offi cer, in terms of the Council’s fi nancial regulations, has authority to write off individual irrecoverable debts in amounts not exceeding R 10 000.

27.13 The Executive Committee, in terms of its delegated authority, is authorised to write off individual irrecoverable debts in amounts ex-ceeding R 10 000.

27.14 The Chief Financial Offi cer shall as soon as possible after 30 June each year, or more regularly if requested by Council to do so, present to the Council a report indicating the amount of the arrears that have been written off during the fi nan-cial year, together with the reasons for the write off.

27.15 The Chief Financial Offi cer may

write off debts if he is satisfi ed that:

• All reasonable steps have been taken to recover the debt and the debt is considered to be irrecover-able, or

• He/she is convinced that recovery of the debt would be uneconomi-cal

27.16 Any debtors whose amounts are written off may be listed with the Credit Bureau and may not be per-mitted to enter into future service contracts with the Council.

28. ILLEGAL TAMPERING AND/OR THEFT OF SERVICES

The Municipality does not condone theft and fraud of municipal ser-vices and will monitor the service networks for signs of tampering or irregularities. Furthermore,

28.1 Water and electricity metering and connection equipment remain the property of the municipality and anyone involved in instances of tampering, damaging or theft thereof will be liable for criminal prosecution.

28.2 With regard to electricity services, if tampering of any nature or theft of such services is identifi ed, the electricity supply to the property may be discontinued by the remov-al of the meter and the cable and the water supply may be restricted. In addition, the customer’s service agreement with the Council may be cancelled and the customer’s deposit may be offset against any amounts owed to the Council.

28.3 If the restricted water supply is tampered with or any variable fl ow-restricting device removed, the water supply may be discon-tinued, the service connection removed and the customer’s ser-vice agreement with the Council may be cancelled. The customer’s deposit may be offset against any amounts owed to the Council.

28.4 Once Council becomes aware that any terminated or restricted service has been irregularly reconnected or reinstated, the necessary action to remedy the situation will be implemented which could include the Municipal Manager reporting such action to the South African Police Service.

28.5 All outstanding amounts including, all metered consumption since the date of the illegal reconnection, or the estimated consumption, if a reliable meter reading is not pos-sible, shall be paid in full together with the required deposit, before any reconnection/reinstatement, and new services agreement are considered. However, the receipt of payment will not necessarily impact on nor prejudice any legal or criminal proceedings against the customer.

29. UNOCCUPIED PREMISES

29.1 When a consumer terminates a consumption account and no new owner registers, the property is deemed to be unoccupied.

29.2 Whenever water and/or electric-ity consumption is recorded at a property that is deemed to be unoccupied effort will be made to establish the identity of the person responsible for that consumption, failing which an appropriate bill will be raised and forwarded to the owner of the property for payment. Should payment not be received then the registered owner of the property is liable for the services consumed.

30. CLEARANCE CERTIFICATES

30.1 Before any property can be transferred from one owner to another, all amounts owing to the municipality for the preceding two years on the property must be settled. Only after settlement, will the Municipality issue a certifi cate stating that all outstanding debts have been settled. No property transfer can take place without such a certifi cate. In addition to the above where the debt on a property exceeds two years and a clearance is issued, a letter of undertaking is to be provided to Council providing for full settle-ment of the outstanding debt on transfer.

30.2 The Municipality requires a pay-ment in advance equal to four months average consumption of all relevant services prior to the issuing of such a clearance certifi cate in order to allow for any consumption that may take place during the time taken for the transfer to go through.

30.3 The Municipality shall, wherever possible, issue a clearance cer-tifi cate within ten working days of such request once all outstanding debts and administration fees have been paid in full.

30.4 The above provisions do not ap-ply in the case of transfers from National Government, Provincial Government or another municipal-ity of residential property where the provisions of Section 118 of

the Municipal Systems Act are applicable.

31. MUNICIPAL STAFF

31.1 Any member of staff of the Council and any Councillor may not be in arrears with the Council for rates and/or service charges for a period longer than three months, and the Council will deduct any outstand-ing amounts from the salary or allowance of such member of staff or Councilor after this period, in accordance with item 10 of Sched-ule 2 of the Municipal Systems Act, 2000 (Act No. 32 of 2000).

32. REPORTING AND PERFORMANCE MANAGEMENT

32.1 The Chief Financial Offi cer shall report monthly to the Municipal Manager in a suitable format to enable the Municipal Manager to report to the Executive Committee as supervisory authority in terms of Section 99 of the Municipal Systems Act, 2000 (Act No.32 of 2000), read with section 100(c).

32.2 If, in the opinion of the Chief Financial Offi cer, Council will not achieve cash receipt income equivalent to the income projected in the annual budget as approved by Council, the Chief Financial Offi cer will report this with moti-vation to the Municipal Manager who will immediately move for a revision of the budget according to realistically realisable income levels.

32.3 The Executive Committee shall, at intervals of 3 months, report to Council as contemplated in Section 99(c) of the Municipal Systems Act.

33. COMMUNICATION OF POLICY TO CONSUMERS

33.1 The municipality will, at its own cost, publish the Credit Control and Debt Collection Policy in the local media. The Chief Financial Offi cer operating under delegated authority will publish the policy on whatever basis is to the Council’s best advantage. A copy of the policy will be posted on the mu-nicipality’s website and hardcopies will be made available on request at the service centers. Any amend-ments may be communicated on the website and in a newsletter from time to time.

33.2 Councilors must, from time to time, address ward committees on the contents of the policy and any amendments thereto.

34. BY-LAWS TO BE ADOPTED

34.1 By-laws shall be adopted to give effect to the Council’s credit con-trol and debt collection policy.

34.2 The by-laws are to comply with the requirements of the Municipal Systems Act, 2000 (Act No. 32 of 2000), the Water Services Act, 1997 (Act No. 108 of 1997), the Electricity Act, 1987 (Act No. 41 of 1987) and the Municipal Finance Management Act, 2003 (Act No. 56 of 2003).

34.3 The by-laws deal severely with defaulters, and their application requires a considerable degree of commitment from the Mu-nicipal Manager and his or her administration, as well as from the municipality’s political structures. For the by-laws to ensure the avoidance of fi nancial misfortunes for the municipality, and to lead to sustained fi nancial stability, their application will have to receive the constant attention of all the municipality’s key role-players and decision makers. If the by-laws are not constantly and consis-tently applied, from month to month and from year-to-year, the municipality’s political and admin-istrative credibility will be severely impaired, and it may not be able to ensure fi nancial sustainability in the long run.

34.4 Although the by-laws envisage even the termination of basic services for defaulting account-holders this will not in itself, no matter how harsh it may seem

to those councillors and offi cials who are disposed to greater leni-ency, prevent the accumulation of arrears. The monthly billing for property rates, sewerage charges and refuse removal fees will continue in respect of defaulting accountholders, even though their consumption of electricity and water may have been terminated or restricted. The termination or restriction of services must therefore be seen merely as a vital fi rst step in the credit control programme, and the commitment by the municipality to follow up such actions with the full force of the law at the municipality’s disposal is an essential further step if the accumulation of debts is to be meaningfully curtailed.

35. ENFORCEMENT OF OTHER LEGISLATION

35.1 In addition to the credit control and debt collection provisions contained in this policy and the published by-laws relating hereto, the Council may enforce any other rights or exercise any power conferred upon it by the Municipal Systems Act, 2000 (No. 32 of 2000), the Water Services Act, 1997 (Act No. 108 of 1997), the Property Rates Act, 2004 (Act No. 6 of 2004) and the Municipal Finance Management Act, 2003 (Act No. 56 of 2003).

35.2 In the event of an inconsistency be-tween the provisions of these and any other by-laws, the provisions of these by-laws shall prevail.

INDIGENT POLICY 1. Defi nitions

In these bylaws, unless the context indicates otherwise -

“Council” refers The Msunduzi Municipality and its successors in law and includes the Council of that municipality or its Executive Committee or any other body acting by virtue of any power delegated to it in terms of legislation, as well as any offi cial to whom the Executive Committee has delegated any powers and du-ties with regard to this policy;

“Child headed household” means a household where both parents are deceased and where all occupants of the property are children of the deceased and are all under the legal age to contract for services and are considered as minors in law by the state;

“consumption” means the ordinary use of municipal services, including water, sanitation, refuse removal, and electricity services for domestic or household purposes;

“due date” in the absence of any express agreement in relation thereto between the Council and the customer, refers to the date stipulated on the account and determined from time to time as the last date on which the account must be paid;

“free basic water” means the maximum amount, volume or consumption of water determined by resolution of the Council from time to time that will be provided free of charge as refl ected in the Council’s Tariffs;

“Income level” means the total, combined income, from any source whatsoever, of the residents, ten-ants, owner and/or all occupiers of a property, as determined according to national policy and guidelines and refl ected in the Council’s Tariff policy;

“Indigents – Automatic” means Owners and/or occupiers of residential property where the combined municipal value of the land and buildings or the vacant land value of such property is equal to, or less than, the values determined by resolution of the Council;

“Indigents – Application” means a resident in charge of a household and who is responsible for payment of municipal charges and whose combined household income is equal to or less than

13the amount as determined by the Council

to qualify for indigent status and has made application to the Coun-cil and is accepted to be classifi ed as an indigent;

“municipal value” means the total combined value of land and buildings on a property, as refl ected in the municipal valuation roll;

“municipal services” refers to any services provided by the municipality or any authorised or contracted service provider, avail-able or applied for, or provision made for any service, for which it is entitled to charged a fee or formulate a tariff, payable by a customer or user, thereof;

“occupier” means any person who occupies any property or part thereof, without regard to the title under which he/she occupies the property;

“owner” means:(a) The person in whom from time

to time is vested the legal title to premises, which title is registered at the Deeds Offi ce;

(b) In a case where the person in whom the legal title is vested is insolvent or deceased, or is under any form of legal disability what-soever, the person in whom the administration of and control of such premises is vested as curator, trustee, executor, administrator, judicial manager, liquidator or other legal representative;

(c) In a case where the Council is unable to determine the identity of such person, a person who is entitled to the benefi t of such premises with a building thereon;

(d) In the case of premises for which a lease of 30 years or more has been entered into, the lessee thereof;

(e) In relation to-

i. A piece of land delineated on a sectional plan registered in terms of the Sectional Titles Act 1986, (Act 95 of 1986), and without restricting the above the developer or the body corporate in respect of the common property; or

ii A section, as defi ned in such Act, the person in whose name such a section is registered under a sec-tional title deed and includes the lawfully appointed agent of such a person;

(f) Any legal person including but not limited to-

i. A company registered in terms of the Companies Act, 1973 (Act 61 of 1973), a Trust, a Closed Corporation registered in terms of the Closed Corporations Act, 1984 (Act 69 of 1984) and a voluntary association;

ii. Any department of State;

iii. Any Council or Board established in terms of any legislation ap-plicable to the Republic of South Africa;

iv. Any Embassy or other foreign entity;

“rates” refers to property rates on property situated in the municipal area, any other tax, duty or levy imposed by the municipality;

“refuse charge” means the monthly charge levied by the mu-nicipality for the removal of solid domestic waste;

“sewage charge” means the monthly charge levied by the municipality for the disposal of domestic sewage;

Objective

The objective of the Indigent Support Policy is to ensure the following:

• The provision of basic services to the community in a sustainable manner, within the fi nancial and administrative capacity of the Council; and

• To provide procedures and guidelines for the subsidisation of basic service charges to its indigent households, using the Council’s budgetary provisions received from Central Government, according to

prescribed policy guidelines.

• The Council also recognises that many of the residents can simply not afford the cost of full provision and for this reason the Council will endeavour to ensure affordability through:

• Settings tariffs in terms of the Councils Tariff Policy, which will balance the economic viability of continued service delivery; and

• Determining appropriate service levels.

Indigent Support Policy Principles

The following should be the guid-

ing principles in implementing the Indigent Support Policy:

• The Indigent Support Policy is in accordance with the Local Govern-ment Municipal System Act No 32 of 2000, Local Authorities Ordi-nance No. 25 of 1974 and other amended or related legislation.

• Relief will be provided by the Council to registered residential consumers of services.

• The Council must, wherever pos-sible, ensure that any relief is con-stitutional, practical, fair, equitable and justifi able to avoid alienating any group of households. There should be no differentiation what-soever of any residential consum-ers. It should only differentiate in the level of service rendered.

• The subsidy for minimum service levels should not result in the creation of a complicated admin-istration that would not be cost effective to implement.

• Differentiation must be made between those households that cannot afford to pay for basic services and those who just do not want to pay for these services.

• The payment of services should be affordable to the indigent.

• The Indigent Support Policy will prevail as long as funds are avail-able.

• The Council may review and amend the qualifi cations for indi-gent support.

• The collective or joint gross income of all the occupants of the household will be taken into account. The household income must be correctly refl ected on the application form requesting indigent support.

• Other than those consumers who are automatically deemed to be indigent by Council, the residents must formally apply on the prescribed application forms for the relief and will qualify for the indigent support according to the prescribed criteria/principles laid down by the Council. After the application form has been completed, an effective and ef-fi cient evaluation system should be used in order to obtain the outcome within a reasonable time determined by the Council.

• If a person is found to be indigent, they should be registered on a database linked to the debtors system.

• The onus is on the recipient to inform the Council of any change in his/her status or personal household circumstances.

• All indigents should be re-evalu-ated annually to assess the provi-sion of continued basic services.

• Disciplinary measures decided by the Council, should be imposed on people who misuse the system and provide incorrect information.

• Any other principle decided by the Council.

Application for Indigent Support

1. Applications for relief must be made on the prescribed forms. The applicant must comply with all the necessary requirements.

• The application form is to contain, inter alia, the following important information:

• Details of the account holder;

• Proof of income;

• Proof of residence;

• Certifi ed copies of identifi cation documents; and

• Number and names of depen-dants.

• The onus at all times to re-apply for continued relief or submit proof of change in circumstances rests with the household.

2. Automatic qualifi cation for concessions

1. Owners and/or occupiers of resi-dential property where the com-bined municipal value of the land and buildings or the vacant land value of such property is equal to, or less than, the values determined by resolution of the Council for the purposes of qualifying for the concessions set out below, and as refl ected in the Council’s Tariffs for indigents, shall automati-cally qualify for such concessions, subject to the conditions set out hereunder:

Property Rates - Free Electricity - Free kWh (as deter-

mined by the Council) Electricity MCB - Free amperage

(as determined by the Council) Water - Free kl volume (as deter-

mined by the Council) balance @ normal tariff for domestic water

Sewerage - Free Refuse - Free

2. In the event that the consumption of water on a property that quali-fi es for the concessions referred to in Section 2(1), exceeds the maximum volume determined by the Council as free basic water for whatever reason, the owner or occupier shall be billed for the total consumption of water in excess of the basic free water as determined by the Council at the tariffs ordinarily applicable within the municipality, and the amount billed shall be deemed as payable.

3. Should consumption exceed the maximum volume determined by Council as free basic water, an owner or occupier of property may make application to the Council for the special tariffs referred to in Section 3 below, which shall in-clude the installation of a variable fl ow-restricting device to his/her water supply.

4. Notwithstanding that an owner or occupier may qualify for the concessions outlined above, the Council may restrict the supply of water to the property of such owner or occupier if he/she fails to pay any account by the due date.

5. In the event that an owner or occu-pier fails to pay any account by the due date, the Council may, in terms of its Credit Control Policy and its Bylaws, disconnect the electricity supply, to the property occupied by such owner or occupier.

6. In the event that there is any evi-dence of tampering with, or theft of Council’s services to a property, the Council may invoke the provi-sions of Section 28 of the Credit Control Policy and its Bylaws.

7. In the event that an account is ren-dered and is deemed not payable and the owner or occupier con-tinues to qualify under the terms and conditions of the indigent policy for indigent concessions, no interest shall be raised on the account. However should the owner or occupier fail to comply with the terms and conditions of the indigent policy and an account is rendered and deemed payable, interest may be raised on the full outstanding overdue account.

8. In the case of Child Headed Households, where the conditions for services and rates meet the qualifi cation criteria referred to in Section 2(1), and the house-hold is declared indigent after consultation and approval by the Ward Councillor and where the combined income of all minor children is less than the amount as determined by the Council for such qualifi cation, the household will receive the applicable indigent concessions outlined in Section 3(2) below. The consolidated ac-count may continue in the name of the deceased parent/s until the estate is transferred to the heir or heirs of the estate. In the case where an executor of the estate is appointed and has jurisdiction over the minor children, the executor would be required to

make provision for payment of the consolidated account.

3. Application for special or basic tariffs

1. Owners and/or occupiers of resi-dential property where the com-bined municipal value of the land and buildings on such property is greater than the value determined by the Council for the purposes of qualifying for free services, as refl ected in the Council’s Tariffs for indigents, but whose level of income is less than the amount de-termined by Council as qualifying for special or life line tariffs, may apply in writing to the Council for such tariffs.

2. Owners or occupiers who apply for such special tariffs shall be required to apply annually, a mini-mum of one month in advance of the anniversary date of their last application for indigent status, in writing by completing the neces-sary application forms, and on approval of their application shall receive the following benefi ts:

Municipal Services:

Electricity - Free kWh (as deter-mined by the Council)

Electricity MCB - Reduced amper-age up to the level approved by Council, at the approved tariff

Water - Free kl (as determined by the Council) Indigent conces-sion kl consumption– @ the tariff approved by Council for indigent customers

Consumption in excess of indigent concession kl @ the normal tariff applicable for domestic household use

Sewerage - Basic Tariff

Refuse - Basic Tariff

Property Rates:

1. Where the combined land and building value of the property is greater than or equal to R 30 001 and less than R 40 000;

Property Rates - Free

2. Where the combined land and building value of the property is greater than or equal to R 40 001 and dependent on the combined household income a rebate of either 40 % or 33 1/3 % is ap-plicable.

3. Where an owner or occupier of property qualifi es for the payment of special or life line tariffs, such owner or occupier shall be liable for the payment of refuse removal and sewerage disposal services to the property at the special or life line rates determined by resolution of the Council from time to time.

4. In the event that the consumption of water on a property that quali-fi es for the concessions referred to in Section 3(2), exceeds the maximum volume determined by the Council as free basic water, for whatever reason, the owner or occupier of the property shall be li-able for payment of consumption of water on the following basis. There will be no charge for consumption up to the volume determined by the Council as free basic water. Consumption in excess of this amount will be charged for at the tariff rate ordinarily applicable to consumers who consume in excess of the volume determined by the Council as free basic water.

5. Where an owner or occupier of property qualifi es for the conces-sions referred to in Section 3(2) and such owner or occupier consumes electricity supplied by the Council, the miniature circuit breaker (MCB) on the property shall be reduced to the amperage as determined by Council.

6. In the event that there is any evi-dence of tampering with, or theft of, Council’s services to a property, the Council may invoke the provi-sions of Section 28 of the Credit Control Policy and its Bylaws.

7. In the event that an account is ren-dered and is deemed payable and the owner or occupier continues to qualify under the terms and conditions of the tariff policy for indigent concessions, no interest, other than on outstanding rates,

shall be raised on the account. However should the owner or occupier fail to comply with the terms and conditions of the tariff policy and an account is rendered and deemed payable, interest shall be raised on the full outstanding overdue account.

8. In the case of Child Headed Households, where the conditions for services and rates meet the qualifi cation criteria referred to in Section 3(1), and the house-hold is declared indigent after consultation and approval by the Ward Councillor and where the combined income of all minor children is less than the amount as determined by the Council for such qualifi cation, the household will receive the applicable indigent concessions outlined in Section 3(2). The consolidated account may continue in the name of the deceased parent/s until the estate is transferred to the heir or heirs of the estate. In the case where an executor of the estate is appointed and has jurisdiction over the minor children, the executor would be required to make provision for pay-ment of the consolidated account.

9. A customer who is resident in a Flat, Simplex, Duplex, Town House, Retirement Complex and the like, and who qualifi es in terms of Section 3(1) and where the water service is not billed for separately by the municipality, will qualify for the following conces-sions:

(a) Water - a fi nancial benefi t that is equivalent to the amount approved by the Council as free water for domestic use; and

(b) Sewerage - a fi nancial benefi t that is equivalent to the basic tariff in respect of sewer charges for domestic property;

10. Should the application of the fi nancial benefi ts of Section 3 (9), result in or have the effect of the monthly bill being in credit, the account rendered shall be zero and not stand to the credit of the customer.

4. Inconsistencies between different by-laws

In the event of an inconsistency be-tween the provisions of these and any other by-laws, the provisions of these by-laws shall prevail.

14

Special Provisions

Access to Basic Services

* All tariff (charge) amounts and income limits quoted here are subject to change.

AUTOMATIC QUALIFICATION AS AN INDIGENT

HOUSE AND LAND VALUE UNDER R30 000

ELECTRICITY Free 50 kWh ✓

AMPERE Free 20 Amp ✓

WATERFree 6kl Balance @ normal R8.56 per kl ✓

SEWERAGE Free ✓

REFUSE Free ✓

RATES Free ✓

ON APPLICATION AS AN INDIGENT

Subject to Ampere limit of 20 Amp and Water Restriction Device

HOUSE AND LAND VALUE BETWEEN R30 001 AND R40 000Reduced

ELECTRICITYFree 50 kWh Balance @ normal ✓

AMPERE 20 Amp Reduced ✓

WATERFree 6kl 7-12 @ R3.49 per kl Balance @ normal R8.56 per kl

✓

SEWERAGE Reduced Tariff ✓

REFUSE Reduced Tariff ✓

RATES Free ✓

ON APPLICATION AS AN INDIGENT

Subject to Ampere limit of 20 Amp and Water Restriction Device

HOUSE AND LAND VALUE OVER R40 001Reduced

ELECTRICITYFree 50 kWh Balance @ normal ✓

AMPERE 20 Amp Reduced ✓

WATERFree 6kl 7-12 @ R3.49 per kl Balance @ normal R8.56 per kl

✓

SEWERAGE Reduced Tariff ✓

REFUSE Reduced Tariff ✓

RATESRebate on approval Income less than R1740 40% OR Income between R1740-R2136 = 33.3%

✓

Indigent Policy Guidelines

Electricity and Water Enquiries 033-392 3222

CHILD HEADED HOUSEHOLDS

In the case of child headed households, the following con-ditions apply: The child-headed household be declared indigent after consultation with the Ward Councillor/s provided that the household income af-

ter death does not exceed R2136.00 per month. That the account be continued in the name of the deceased estate.

FLATSWhere a resident lives in a

fl at, and is the account holder and is declared indigent upon

application, the following con-ditions apply:

WATERA fi nancial benefi t that is

equal to the value of 6kl of water based on the domestic tariff shall, on application, be credited to the electricity ac-

count.

SANITATIONThe indigents electricity ac-

count shall, on application, be credited with the basic tariff in respect of sewer charges based on the domestic tariff.

That if the above mentioned concessions have the effect of the month being in credit, the account rendered shall be zero and not stand to the credit of the consumer.

*Conditions Apply

Meter Reading Enquiries 033-392 3223 / 033-392 2251

Rates Enquiries 033-392 2229 / 033-392 2391

15

16

In an attempt to improve service delivery, the Msunduzi Municipality is rolling out a new telephone system. To accommodate the new integrated telephone system, Telkom has allocated the Council new telephone numbers.

The New Numbers are as Follows

All telephone numbers starting with 033 395 1xxx have changed to 392 2xxx, e.g. 033 395 1598 will changed to 033 392 2598.

For queries please contactGwen Ndwandwe

033 392 2589 or 083 459 6800

We’ll communicate furthur changes in due course. We apologise for any inconvenience.

Main Switchboard number is:

033 392 3000

Cons Billing Enquiries is:

033 392 3222

Cons Billing Meter Readers is:

033 392 3223

Procurement Fax number is:

033 392 2396

Water and Sewerage Faults number is:

033 392 2128

Hall Bookings number is:

033 392 2264

Msunduzi Budget Tabloid 07-08

Documents

year financial plan

years izimbizo

coming izimbizo

sector plans

msunduzi municipality

city of choice

izimbizo concept

idp budget planning