WATER CONSERVATION AND CREDIT CONTROL AND DEBT COLLECTION POLICY

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• WATER CONSERVATION AND CREDIT CONTROL AND DEBT
  COLLECTION POLICY
• February 2009

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PRESENTATION CONTENT

• Introduction Water Scorecard
• Legislative obligation
• Credit Control and Debt Collection Policy and
  By-law
• - Improved benefits to the poor who register as
  indigent
• - Rates rebates for Senior Citizens and Disabled
  Person
• Total Service Debt
• Water Debt for City of Cape Town Areas

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Water Scorecard

• 26 savings on unconstrained water usage
• Collection ratio for water increased from 67 to
  92
• Leaks repaired at 50 school for free
• 32000 indigents properties have had their leaks
  fixed for free
• 118 000 litres of treated effluent re-used
• R6m water pressure reduction scheme in Mitchells
  Plain - savings recouped in 1 year
• Target of 40 km of water pipes to be replaced in
  2008/09 18km completed YTD
• 30 000 water management devices installed across
  the City in areas such as Atlantis, Browns Farm,
  Constantia, Delft, Gugulethu, Lost City, Ocean
  View, Parklands, Samora Machel, Mitchells Plain.
  An additional 20 000 will be installed by
  mid-2009 in Table View and Westbank.
• Water stand pipe ratio exceeds National standards
  of 1 standpipe per 200 radius. City standard is 1
  standpipe within 100 meters.
• City of Cape Town received 10 water related DWAF
  and WISA awards
• ISO accreditation achieved

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LEGISLATIVE OBLIGATION

• In terms of the Municipal Systems Act 32 of 2000
  a municipality
• must collect all money due and payable, subject
  to this Act and any other applicable legislation
  and
• for this purpose, must adopt, maintain and
  implement a Credit Control and Debt Collection
  Policy

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CREDIT CONTROL AND DEBT COLLECTION BY-LAW AND
POLICY

• This By-law and this Policy were adopted at a
  Special Council meeting on 31 May 2006 and the
  By-law was duly published in the Provincial
  Gazette dated 15.06.06, as required in terms of
  the Municipal Systems Act of 2000.

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Improved benefits to the poor who register as
indigent.

• Registration criteria
• In order to qualify for registration as an
  indigent, an applicant must satisfy the
• following criteria
• (a) the usage of the residential property must be
  predominantly private residential and
• (b) the applicant must be-
• (i) the registered owner of the
  residential property or
• (ii) an occupier of a child-headed
  household (all the occupants need to be 18 years
  of age and younger) which is registered in the
  name of the deceased parent or deceased parents
  and
• (c) the gross total household income of the
  residential property may not exceed the maximum
  income of the Senior Citizens and Disabled
  Persons Rates Rebate Scheme which receives a 100
  rebate as per the Rates Policy (was R1880
  increased to R2 880). Double the State Pension is
  no longer applicable and is replaced by this
  sub-item

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Improved benefits to the poor who register as
indigent, continued

• (d) the applicant may not be the registered owner
  of more than one property and
• (e) be a full-time occupant of the property and
• (f) notwithstanding the aforesaid, owners of
  residential immovable property which have a
  Municipal value of R88 000.00, or less, or as
  determined by Council from time to time, will be
  deemed to meet the criteria in sub-item (a) to
  (e) above and will be regarded as being
  registered (currently 68 000 properties
  classified as indigent under this category. All
  properties with a municipal valuation of under
  R199 000 receives a R30 per month indigent grant
  towards their water and sewerage services).
• Council may determine the criteria as mentioned
  in sub-items (a) to (f) from time to time.

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Improved benefits to the poor who register as
indigent, continued

• In addition to the previously mentioned improved
  benefits, the writing off criteria for
  irrecoverable debt have been amended to allow the
  following
• All debtors who qualify and are
  registered as indigent,
• (a) who are not employable and in
  receipt of a disability grant or
• a disability pension
• (b) who are 60 years of age or older
  or
• (c) who qualify as a child headed
  household
• will have their arrears written off
  once during ownership of the property,
• The current debt for water-related services as at
  31/12/2008 is R2 billion
• City wrote-off R1.5 billion of arrears and parked
  arrears debt in 2006/07 financial year.

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Rates rebate for Senior Citizens and Disabled
Persons

• In addition to the previous benefits, those
  citizens that do not qualify as indigent, but are
  senior citizens or disabled can apply for the
  following rates rebate for the 2008/2009
  financial year
• Gross Monthly Household Income
• 2007/2008
  2008/2009 Rebate
• Rand
  Rand
• 0 -1740 0
  -2880 100
• 1741-2130
  2881-4200 90
• 2131-2520
  4201-4600 80
• 2521-2910
  4601-5000 70
• 2911-3300
  5001-5400 55
• 3301-3690
  5401-5800 45
• 3691-4080
  5801-6200 35
• 4081-4500
  6201-6600 20
• 4501-5000
  6601-7000 10

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Requirements for Rates Rebate (Residential
Properties)

• occupy the property as his/her normal residence
  and
• be at least 60 years of age or in receipt of a
  disability pension and
• be in receipt of a gross monthly household income
  (including that of all persons normally residing
  on that property) not exceeding R7 000 and
• not be the owner of more than one property and
• provided that where the owner is unable to occupy
  the property due to no fault of his/her own, the
  spouse or minor children may satisfy the
  occupancy requirement and
• provided that a usufructuary will be regarded as
  the owner and
• provided that the criteria of a natural person
  may be waived at the sole discretion of the City
  to allow for a property owned by a trust where
  the total number of beneficiaries meets all of
  the other requirements for rates rebate and
  provided further that the gross monthly income of
  all persons residing on that property be added to
  the gross monthly income of the beneficiaries
  staying on that property.
• The owner must submit the application by 31
  August for this rebate to be granted for the
  financial year in which the application is
  submitted, failing which the rebate will not be
  granted.

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Water Restrictions - Disconnections

• Commercial, Business and Industrial customers are
  disconnected
• Domestic Customers do not have their water supply
  disconnected, but have their water supplies
  restricted (customers not registered as
  indigents) or a water flow management devise
  fitted for indigent customers. Customers are
  never left without access to water.
• The intention of the City is not to restrict/
  disconnect any water supplies for credit control
  measures but to install the flow management
  device (currently R80 mil provided on budget for
  installation of these devices)

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WATER FLOW MANAGEMENT DEVICE

• Installation scenarios
• As part of the integrated water leaks project
  Council repairs leaks on private properties
  (value less than R88 000.00) and by agreement
  install flow management devices and arrears are
  than written off.
• In the event that a domestic customer whose
  supply has been restricted for more than three
  times for non-payment and fails to pay after due
  process will have a flow management device
  installed.
• Flow management devices will be installed in all
  new housing developments. The device will be set
  at full flow or based on customers
  affordability.
• A domestic consumer may apply to be considered
  for the installation of a flow-control device at
  the applicable miscellaneous tariff as a means to
  control the total daily and monthly volume, set
  by agreement with the City, which that consumer
  will be liable for. Installation of such a device
  will be at the discretion of the City.

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WATER FLOW MANAGEMENT DEVICES (cont..)

• Currently 32 000 leaks had been repaired across
  the City and the water leaks project is ongoing.
• In total R50m has been written off as part of
  irrecoverable debt.
• Mitchells Plain installations Projects to
  follow in current financial year 08/09 ie
  (Tafelsig, Freedom Park Old Tafelsig)

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Registered Indigents

• Who agrees to have a water flow management meter
  installed receives
• Free 6 000 litre basic life line water allocation
• Indigent grant of R30 equal to an additional 4
  000 litres of water
• Available water is equal to 350 litres per day,
  unused water in a day is transferred to next day.
• Customer can request more water per month
  according to the available budget
• The customer pays after water has been consumed
  no prepayment
• On agreement the water leaks as a once off are
  fixed and current arrears written off

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FUTURE WATER DEMANDS STRATEGY

• To install Flow Management Devices at all
  Properties
• To constantly look at products (credit meter
  systems) to improve and enhance our current
  metering and Credit Control and Debt collection
  processes in the City.
• To continue to assist indigent customers by
  fixing leaks on properties to help keep water and
  sanitation bills affordable to customers.
• To continually educate and empower customers to
  manage and conserve the water resources.

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QUESTIONS?

• Let us work together for a better city