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LOCAL AUTHORITY NOTICE ……… CITY OF TSHWANE METROPOLITAN

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LOCAL AUTHORITY NOTICE ……… CITY OF TSHWANE METROPOLITAN Powered By Docstoc
					                                  LOCAL AUTHORITY NOTICE ……….

                         CITY OF TSHWANE METROPOLITAN MUNICIPALITY

NOTICE PUBLISHED FOR PUBLIC COMMENT AND/OR INPUT ON A DRAFT POLICY FOR
IMPLEMENTATION IN THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY

The City of Tshwane Metropolitan Municipality hereby gives notice in terms of Chapter 11 of the Local
Government : Municipal Finance Management Act, 2003 (Act 56 of 2003) read with section 17(2)(b) of
the Local Government : Municipal Systems Act, 2000 (Act 3 of 2000) that it intends to implement a policy
with regard to the following:-

COLLECTION POLICY- ARREARS ACCOUNTS

The draft Policy in respect of the Collection policy: Arrear Account is open for inspection during normal
office hours from 07:30 to 16:00 on weekdays at the following addresses:-

Saambou Building, 11th Floor, 227 Andries Street, PRETORIA, 0002
Akasia Customer Care Centre, 16 Dale Avenue, Karenpark, Tel: 521-8056/8342
Laudium Customer Care Centre, corner Tangerine and 6th Avenue, Laudium, Tel: 374-9754/9760/9756
Centurion Customer Care Centre, corner Clifton Avenue and Rabie Street, Lyttelton, Tel: 671-7038/671-
7843/671-7241
Munitoria Customer Care Centre, Ground Floor, Vermeulen Street,Tel: 358-4660/4661/4663/4664/358-
4665/4666/4667
Mamelodi Customer Care Centre, Makubela Street, Mamelodi, Tel: 358-5520/5525/5538/5541
Atteridgeville Customer Care Centre, Atteridgeville Municipal Offices, Komane Street, Block E, Tel: 358-
5047/5020/5045
Soshanguve Customer Care Centre, Corner Commissioner, Block F, Tel: 521-8000 Ext 8865

The draft Policy can be obtained on the Internet at www.tshwane.gov.za OR at during normal office hours
from 07:30 to 15:45 on weekdays at the abovementioned offices or at 3RD Floor BKS Building 373
Pretorius Street Pretoria.

Written comments or representations must be directed to the Manager: Debt Collection, PO Box 440,
Pretoria, 0001 or 3rd Floor , BKS Building, 323 Pretorius Street, Pretoria or at e-mail address
NeelsE@tshwane.gov.za on or before 19 July 2006.

Any person who cannot read or write or need assistance may come during office hours from 07:30 to
15:45 to the abovementioned address to be assisted by staff members of the CTMM in transcribing
his/her comments or representation.

SUMMARY:

The draft Policy contains provisions with regard to the following:

The processes to be followed by the CTMM to sufficiently address the payment of arrears by main
category consumers.

MR BLAKE MOSLEY-LEFATOLA
MUNICIPAL MANAGER


(Notice No )
                                                                                                ANNEXURE A

           CITY OF TSHWANE METROPOLITAN MUNICIPALITY
                             COLLECTION POLICY: ARREAR ACCOUNTS

This Policy is made in terms of Section 96 of the Municipal Systems Act , 2000 ( Act 32 of 2000 ) and
               the City Of Tshwane Metropolitan Municipality : Credit Control Bylaws.

1.      PURPOSE

        In order to sustain the local governance and continued service delivery, the collection of income
        levied on accounts submitted to consumers (current accounts) must ideally be realised within a
        turnover rate not exceeding 30 days. Payment of arrears must also be addressed sufficiently for the
        main categories of consumers in order to minimise arrear debtors.

2.      DEFINITIONS

2.1     Accounts means the municipal account for services rendered and for assessment rates levied by
        the Municipality.

2.2     Clients means consumers and/or debtors with whom a legal relationship is established by either
        formal agreement for delivery of services by the municipality, or against whom the municipality has
        a rightful claim
        .
2.3     Consumers means those residents who make use of electricity, water, sewerage services or
        refuse removal/city cleansing services.

2.4     Credit Control is the limiting of further sales of services to consumers/debtors in arrears and the
        negotiation for payment in exchange for normalising further service delivery.

2.5     Debt Collection is the execution of functions necessary to collect unpaid income of the
        municipality, owed by debtors.

2.6.1   Debtors includes any or all of the following:
        Consumers, as defined above.
        The owners of properties within the municipality’s jurisdiction, who are liable for all charges relating
        to service delivery, unless agreed otherwise, and property tax on their properties, as indicated on
        the monthly municipal accounts.
        RSC levy payers, sundry debtors, rent debtors and sale of land debtors.

2.7     Due date means the date indicated on an account statement by which time payment of the amount
        on the statement is required.

2.8     Indigent means a debtor whose whole household has been evaluated in terms of the Social
        Package Policy and who is registered as being indigent

2.9     Residential household means a debtor of whom the tariffs for all the levies for services and rates
        are domestic tariffs.

3.      PRINCIPLES

3.1     Non-payment by debtors of their accounts has a direct negative impact on the Municipality’s ability
        of service delivery to clients.

3.2     Current levies not paid by the indicated due date are in arrears and all debtors with arrears are
        subject to credit control and debt collection measures. The right of access to services, and
        consumption thereof, can only be exercised by consumers who are not in arrears on their
        municipal services accounts or who have arranged to pay their arrears in terms of this Policy.
3.3.     Payments received by the municipality will in terms of section 102 of the LOCAL GOVERNMENT:
         MUNICIPAL SYSTEMS ACT, 2000 (Act 32 of 2000), be allocated at the discretion of the
         municipality against any amount owned to the municipality.

3.4.     This policy will be administered in line with section 102 and 103 of the 102 of the LOCAL
         GOVERNMENT: MUNICIPAL SYSTEMS ACT, 2000 (Act 32 of 2000).

3.5       Various methods of payment by debtors as well as sufficiently convenient payment points are
          available.

3.6       Interest on arrear debt in excess of 59 days is levied monthly at the prime overdraft rate of the
          Municipality’s banker as at 1 January and 1 July of each year for the six months following these
          two respective dates. Interest levied but not paid is included in the arrear amount of such a debtor.
          Interest on instalment plan arrangements for the monthly payment of arrears will be calculated on
          the monthly reduced balance of the arrears at a fixed rate throughout the period and the rate will be
          the current rate as on the contract date of the instalment plan arrangement.

3.7       Credit control measures are applied with pro active reminder or warning. Account statements are
          regarded as reminders of the arrears status of the account as well as stating the intention to take
          credit control measures.

3.8       Metered services consumed by an unknown consumer are billed to the owner of the property to
          which the service connection is registered.

          Only one account for all municipal levies and service charges relating to any property will be
          submitted to the owner of such property, except in cases of those properties with multiple
          consumers, each such consumer being separately metered by the municipality for electricity and/or
          water consumption.

          Consumers who rent properties with multiple consumers, each such consumer being separately
          metered by the municipality for electricity and/or water consumption, and are to be billed separately
          for such services, must enter into a service agreement to have access to these services. No
          service agreement is valid without the written consent of the registered owner of the property and
          no such agreement shall be entered into if the account of the owner of such a property is in arrears
          and without an arrangement for payment.

          A prepayment meter can only be installed at a property with the written consent of the property
          owner or his/her duly authorised representative, who will be regarded as the prepayment
          consumer.

3.9       Refusal by banks to honour payments by cheque or debit order is regarded as non-payment, upon
          which the relevant debtors are subject to credit control measures.

3.10      Consumers who make no further use of any services but still owe an amount, are inactive debtors
          who, after the submission of a second inactive account statement to their latest known postal
          addresses, are handed over for legal collection action. Limited collection actions (i.e. Final Letter of
          Demand) are applied for inactive accounts smaller than R3 000 due to the cost benefit ratio of such
          cases. Any further collection action required for these individual accounts is at the discretion of the
          Chief Financial Officer.

3.11      Consumers of large quantities of services are managed by telephonic and personal contact with
          them on a higher management level, e.g. corporate business and government departments.

3.12      Residential household consumers/debtors form a distinct group for whom the following special
          measures and exceptions apply:

3.12.1    Water supply to defaulting residential household consumers will not be completely discontinued,
          but rather be restricted due to hygienic reasons. Other types of consumers who are in default and
          whose water supply is involved will be completely deprived of the service.

3.12.2    Any interest free arrangements for payment of arrears in terms of this policy are intended to assist
          those debtors by making their current monthly accounts more affordable.
3.13    All notifications served to the domicilia of debtors state the reason/s for actions taken and supply
       information as to how they can take corrective action to normalise the situation.

3.14   If it is necessary to disconnect any service in terms of this Policy, the free cross-subsidised portion
       of that service, in terms of the Municipality’s tariffs for service delivery, will also not be available for
       as long as that service is to remain disconnected.

4.     CREDIT CONTROL MEASURES

       The following measures are applicable to those properties with arrear accounts for municipal
       charges, tariffs and/or levies, to which properties either water or electricity or both of these services
       are supplied by the municipality:

4.1     Reminder/Demand for payment

       A reminder that the previous account has not been paid on the due date is generated after the due
       date and hand-delivered to the debtor’s physical address. This reminder clearly states that a
       period of 7 days is allowed for payment or arrangement for payment, in the absence of which,
       service delivery to the debtor’s consumption address will be restricted. The account of the debtor is
       debited with the cost of such a reminder at the approved tariff of the Municipality.

       Where prepayment type meters for the vending of services are installed, a block will be placed on
       further vending of those services to consumers whose municipal accounts are in arrears. The
       reason for such blocking will be given to the individual consumer at vending stations.

4.2    Electricity disconnection (level 1) and Water restriction

       In the absence of reaction on the 7-day reminder, the electricity supply to the debtor is
       discontinued together with the notice for the reason of the discontinuance. The account of the
       debtor is debited with the cost of the level 1 cut-off at the approved tariff of the Municipality.

       In the absence of reaction to the disconnection of electricity within 7 days, in cases where the
       debtor has a consolidated account including water consumption levies, a disconnection (restriction
       for residential consumers) of water is carried out at the consumption address and a notice to that
       effect is left at the premises. The account of the debtor is debited with the cost of this action at the
       approved tariff of the Municipality.

       In the absence of reaction on the 7-day reminder, in cases where the debtor has an account for
       water consumption levies but not for electricity, a disconnection (restriction for residential
       consumers) of water is carried out at the consumption address after a period of 7 days, and a
       notice to that effect is left at the premises. The account of the debtor is debited with the cost of this
       action at the approved tariff of the Municipality.

4.3    Electricity disconnection (level 2) and Water restriction

       In the further absence of reaction on the level 1 cut-off of electricity, the level 1 cut-off is inspected
       after 7 days to ensure that the service is still discontinued. If the electricity is found on, it is again
       discontinued with the relevant notification, but then via a more expensive procedure to ensure a
       more tamperproof disconnection. The account of the debtor is debited with the higher cost of the
       level 2 cut-off at the approved tariff of the Municipality. The Municipality may also opt to install a
       prepayment type electricity meter at the cost of the consumer and to restrict the consumption of
       electricity by the prepayment consumer and to block the vending of prepayment services until the
       requirements of the Municipality are met.

       In cases where the debtor has a consolidated account that includes water consumption levies, the
       water supply is also disconnected (restricted for residential consumers) together with the level 1
       electricity cut-off inspection and a notice to that effect is left at the premises. The account of the
       debtor is debited with the cost of this action at the approved tariff of the Municipality.

4.4    Illegal reconnection/tampering of electricity

       If consecutive follow-up actions due to no reaction by the consumer/debtor reveal that illegal
       consumption of the service occurred or a disconnection has been tampered with, the service
          connection is removed.

4.5       Illegal reconnection/tampering of water

          The water disconnection/restriction is monitored and followed up in cases of absence of reaction by
          the consumer/debtor to ensure that the disconnection/restriction is not tampered with. Interference
          with disconnections at water services points of non residential household consumers will lead to
          the removal of such a service connection. Any first time discovery of tampering with a restriction
          device or service connection at the address of a residential household consumer leads to
          restriction of the water flow to the quantity of the monthly free water allocation to residential
          households. Further tampering after such a restriction will lead to the prosecution of that residential
          household consumer.

5         DEBT COLLECTION MEASURES

5.1       LEGAL STEPS are taken to collect arrears in the following cases:
          - for all accounts where the arrears are older than 60 days.

5.1.1     Internal legal process:

5.1.1.1   A pre-investigation into the account and debtor detail is carried out before the preparation of a
          summons takes place. The data of an appointed Credit Bureau is utilised in this regard and may
          result in telephonic contact with the debtor, which may obviate the need for summonsing. The
          tracing cost and the telephone cost are debited to the account of the debtor at the approved tariff of
          the Municipality.

5.1.1.2   Arrear accounts in excess of R100 000 which are to be summonsed are High Court matters, which
          are referred to the suitably qualified Legal Division of the Municipality for summonsing in
          conjunction with one of the appointed panel of attorneys.

5.1.1.3   Arrear accounts less than R100 000 are Magistrate Court matters for which the relevant
          summonses are issued. The different Sheriffs of the Courts deliver these summonses to the
          summonsed debtors. The expenses of the issuing and delivery of the summonses are debited to
          the debtors accounts.

          If debtors react on the summonses received within 5 working days after delivery by the Sheriff, by
          either payment in full or partial payment and arrangement for monthly payment of the balance, no
          further legal costs are debited by the attorney or debt collection agent, and the matter is not further
          pursued for as long as the debtor complies with the agreed monthly payment.

5.1.1.4   Summonses not reacted upon within the 5 working days window period are referred to the local
          Magistrates Courts in conjunction with the collection agents, who have jurisdiction in these Courts.
          Default judgement and warrants of execution are obtained and the relevant debtor is automatically
          also blacklisted at the major credit bureaus. A notice of the default judgement is posted to the
          debtor by registered mail. The remedies mentioned in section 103 of the LOCAL GOVERNMENT:
          MUNICIPAL SYSTEMS ACT, 2000 (Act 32 of 2000), will be applicable in these cases.

5.1.1.5   Default judgements not reacted upon within a further 10 working days give rise to activation of the
          warrants of execution, which can either order the sale of property of the debtor to recover arrears
          or order the debtor to be evicted in case of arrear rentals. Where the debtor has no fixed property a
          court order can be served on him/her to appear in court where the Magistrate can approve a
          garnishee order or an emoluments attachment order to recover the debt, in line with section 103 of
          the LOCAL GOVERNMENT: MUNICIPAL SYSTEMS ACT, 2000 (Act 32 of 2000).

5.1.2     External legal process:

5.1.2.1   The process for debt collection of any portion or category of the debtor book can be outsourced to
          collection agents by the Chief Financial Officer and/or The Head: Legal and Secretarial Services .
          Any cost that arises from such actions will be recovered from the debtor.

5.1.2.2. All arrear accounts older than 120 days are classified as irregular payers and may be blacklisted
         through the Credit Bureaux agencies.
5.2     ESTATES ACCOUNTS COLLECTION

5.2.1   Estates with Legal Status:

        The accounts of debtors who are declared as insolvent, under administration or deceased are dealt
        with according to normal legal practices by collection staff of the municipality.

        Unsuccessful claims are submitted to the Council for approval to be written off.

5.2.2   Estates without formalised Legal Status:

        In numerous cases the head of a household has died without leaving a will indicating to whom
        ownership of the family residence is to be transferred upon the event of his/her death OR the
        owner of the property has abandoned his/her family to fend for themselves. As these exceptions
        are not provided for in the normal legal practice, the following process will be followed in such
        cases:

        The remaining family must report the situation to the Municipality’s collection office, who will require
        the relevant documentation to be obtained by the family ie. a death certificate and an order of the
        local Magistrate allocating right of ownership to someone of the surviving family in the case of a
        deceased estate OR an order of the local Magistrate allocating right of ownership to someone in
        the abandoned family.

        In all of these cases, extension for the payment of the arrears as at the date of notification will be
        given by the debt collectors of the Finance department, disconnected electricity will be reconnected
        and the remaining family will be expected to pay all amounts levied on monthly current accounts in
        excess of the amount of the extension until such time as the matter has been finalised. This will
        prevent any further service restrictions or collection actions at the residence whilst the family are in
        the process of legalising ownership of the property.

        As soon as ownership has been officially allocated by the Magistrate, the documentation must be
        presented to the municipality’s collection office, who will then change the name of the account to
        that of the new owner. They will also encourage the new owner to make an arrangement for the
        payment of the arrears to prevent credit control and collection action from being taken by the
        municipality. Alternatively, if the family qualifies to be registered for assistance in terms of the
        municipality’s social package, they can apply for it and after registration, their arrears can be dealt
        with in terms of that policy.

        Unsuccessful claims are submitted to the Council for approval to be written off.

        The above process will also apply to cases without a formalised legal status, e.g. abandoned
        families and child headed households, where the Indigent Policy approved by Council is applied
        where relevant.

5.3     CLEARANCE CERTIFICATES

        Before any property can be transferred from one owner to another, all arrears associated with the
        relevant property are payable, where-after the Chief Financial Officer issues a certificate to that
        effect. No transfer of ownership will be processed at the deeds office without such a certificate.

5.4     APPROVAL OF BUILDING PLANS

        Before any building plans pertaining to the alteration, improvement or erection of buildings or
        structures on a property can be considered for approval or any permission to proceed with such
        construction can be given, all arrears associated with the relevant property are to be paid.

5.5     SUPPLIERS OF GOODS AND SERVICES TO CTMM

        All suppliers of goods and services to the municipality are required to provide proof that all their
        rates and services accounts are paid in full upon application for registration as vendors and every
        six months thereafter.

6       CLIENT CARE
6.1     Clients may lodge appeals on the accuracy of accounts at the Client Services Section of the
        Finance Department. Whilst such an appeal is not solved, no credit control measures are taken for
        that amount. Other levies on the account, which do not form part of such an appeal, are however
        still payable and is not included in the extension for payment.

6.2     The following instalment plan arrangements for payment can be made at the Finance Department’s
        Debt Collection and Credit Control Sections to either prevent debt collection measures or to
        normalise service delivery (reconnect) after credit control measures were instituted:

6.2.1   Full settlement of the amount for which action was taken.

6.2.2   Partial settlement of preferably 60% of the arrear amount, but no less than 10% of the arrear
        amount and entering into a repayment contract with the Chief Financial Officer for monthly
        payment of the balance over a period not exceeding 6 months.

6.2.3   The monthly payment period can in cases of special merit be extended beyond 6 months to not
        more than 60 months at the discretion of the Chief Financial Officer. The extension period must
        reflect a balance between the Council’s best financial interest as well as the client’s request.

        Residential household debtors who have not honoured the 60 months arrangements due to
        affordability, can apply to repay their arrears over a period not exceeding 100 months to make a
        more affordable arrangement. This arrangement must be paid monthly together with the current
        account and will immediately cease if the debtor defaults.

6.2.4   The discretion of the Chief Financial Officer is exercised within the following parameters:

        - If no partial settlement is possible immediately, it can be extended to the end of that month or
          included in the monthly repayment contract.

        - Monthly repayment contracts can be made interest free under the following circumstances:

               For a residential household debtor on a property with a total municipal valuation of R150 000
               or lower.
               If a debtor/consumer never received an account due to an incorrect postal address as a
               result of an administrative error by the Municipality.
               If a financial correction to a residential household account is made for any reason and the
               debtor requests an arrangement for payment of the debit.

        -   Extension for normal full payment of a current account which has no arrear balance, can be
            made until the end of a month or the next salary payment date of an employed client.

6.2.5   Breaching of repayment contracts is regarded as a violation of this policy and will lead to renewed
        disconnection of services as well as legal procedure for the collection of the arrears.

6.2.6   In instances of such contract breach, services can only be reconnected and legal procedures be
        put in abeyance after the reinstatement of the contract by payment of all repayment instalments in
        arrears and the unpaid current accounts.

6.2.7   In cases where the reinstatement of a breached contract is not possible, new repayment contracts
        can be considered due to unforeseen financial and personal circumstances of the debtor. In such
        cases, the Finance Department’s Credit Control Section will advise the debtor/consumer to save on
        the current levies by either curbing consumption or by requesting certain services to be
        discontinued for an agreed period of time. By so doing, the repayment of the arrears together with
        the current account is made more affordable.

6.3     Settlement offers by debtors for full and final payment of arrear amounts can be considered and
        granted by the Chief Financial Officer subject to the following conditions:

        -   Not more than the arrear interest levies on the account, or a portion thereof, can be granted as
            a credit against such an account, if it is in the best financial interest of the Municipality.

        -   Out of Court settlement offers by debtors against whom legal action is pending can be
            considered after consultation with the Municipality’s Legal Counsel, if it is in the best financial
            interest of the Municipality.



7       RECONNECTION OF SERVICES

        Where services are disconnected as a result of the application of this policy, these services can
        only be reconnected under the following circumstances:

7.1     Water supply disconnected for non-payment by non-residential debtors, can only be normalised
        after either receipt of the amount in arrears or conclusion of a settlement arrangement for payment
        of the arrears in terms of this Policy.

7.2     Water supply which has been restricted due to non-payment by residential debtors will be
        normalised after either full payment of the arrears, or upon receipt of an appeal for normalisation
        due to a good payment record on the repayment contract and the current monthly levies. The
        Chief Financial Officer will receive and evaluate each such an appeal.

7.3     Water supply to non-residential debtors, which has been disconnected due to tampering can only be
        normalised if the debtor has arranged to pay the arrear account in terms of this Policy, has in
        writing undertaken not to tamper or allow further tampering on the water installation and has paid
        the required fee for restoring the service connection.

7.4     Electricity supply discontinued/blocked due to non-payment can only be reconnected/unblocked
        after receipt of the amount in arrears or the conclusion of a settlement arrangement for payment of
        the arrears in terms of this Policy. The prepayment sales restriction of consumers/debtors with
        arrangements will be lowered to enable them to afford both the monthly arrangement payment and
        electricity.

        Should the Municipality discover any tampering on a prepayment installation, no
        unblocking/reconnection will be done unless payment of the account of that consumer/debtor has
        taken place or has been arranged and the service installation is certified by the electricity division
        as to having been normalised.

7.5     Any services which are discontinued as a result of tampering with the Municipality’s distribution
        networks and/or -mechanisms will only be reconnected if such a debtor can obtain a Court interdict
        to compel the Municipality to do so.

        If the affected consumer/debtor, however, admits in writing that he/she permitted or committed the
        tampering, undertakes to not repeat the action, concludes a settlement arrangement for payment
        of the arrears in terms of this Policy and pays the relevant connection fee for the new service
        connection, service reconnection can also be made. Such written admission will be kept for future
        use in case of repeated tampering.

8.      RSC LEVY PAYERS

        RSC Levies have been abolished with effect from 1 July 2006. All arrear RSC Levies payable as at 30
        June 2006 will be collectable in terms of this policy and any other applicable national legislations and
        guidelines.

8.1     Active accounts with balances greater than R 200.00:

8.1.1   Declaration for payment forms (RSC4) are sent monthly to all registered levy payers in order to
        declare and pay the current levies

8.1.2   If no assessment or payment was received for the previous month, they are informed of an estimated
        assessment (RSC6)

8.1.3   Where a balance exists on the account, it is also reflected on this document in order for the levy payer
        to be informed.
8.1.4    A collection letter (RSC12 or RSC15) is sent to the levy payer in respect of accounts with balances
         older than 60 days,

8.1.5    A further reminder letter (RSC21) will be sent to the levy payer if no payment has been received after
         30 days.

8.1.6    A final notice (RSC13/RSC14) will be sent by registered mail 30 days after the reminder was sent.

8.1.7    If no reaction is received, the matter is referred to the Legal Division for summonsing.

8.1.8    Active accounts with balances lower than R200 are written off as bad if no response is received after a
         reminder letter has been issued, as the collection costs do not warrant proceeding with further
         collection actions.

8.2      Inactive Accounts:

8.2.1    Amounts outstanding less than R 3 000.00:
         These debts are written off as bad debt after a final demand has been issued, as collection cost does
         not warrant proceeding with further legal action.

8.2.2    Amounts outstanding greater than R 3 000.00:
         These debts are referred to the Legal Division for summonsing and further legal action if the levy payer
         has not reacted to a final demand for payment.

8.3      Levy Inspectors:

8.3.1    Identify arrear accounts (older than 60days) during routine sweeping action and verify levy information
         r collect cheque payments for the Municipality.

8.3.2    Identify non-registered levy payers and ensure that they are duly registered.

8.4      Summonsed Accounts:
         Summonsed accounts of which the warrant of Execution is returned “Nulla Bona”, are listed for writing
         the arrears off as bad debt as there were no assets that could be attached.

9.       SUNDRY DEBTORS

9.1      If sundry debtors are in arrears, a final demand for payment within 14 days is submitted to them.

9.2      If there is no response after the final demand, the matter is handed over to the Legal Division
          for further collection action.

9.3      Where there is a response for arrangements, a payment based on a percentage of the outstanding
         debt has to be made and an interest free arrangement agreement for the balance over a period not
         exceeding 24 months depending on the amount outstanding and what the debtor can afford. Only
         in exceptional cases will arrangements exceed 24 months since most of the sundry debtors are
         cases where the service is provided once off. In the exceptional cases, the period of an
         arrangement agreement will be extended to more than 24 months up to a maximum of 60 months.

9.4      In cases of payment not being received as agreed, the matter is handed over to the Legal Division
         for further collection action.

9.5      The minimum amount for an account to be handed over to the Legal Division is R3000. All accounts
         less than R3000.00 are written off after all collection efforts other than legal action have failed.

10.      PROPERTY RENTALS and SALES

10.1     RENTAL ACCOUNTS:
10.1.1   If no payment has been received before the end of the month, a reminder for payment is printed
         on the following month statement, indicating that if payment is not received within 14 days, the
         municipality will proceed with the collection action.
10.1.2   Arrangements for payment of arrears by debtors of lease/sales agreements may not exceed a
         period of 24 months. On average, tenants do not stay in municipal owned flats/houses for longer
         than four years, therefore arrangements over an extended period increases the risk of not
         recovering the debt.
10.1.3   For all accounts that are more than 90 days (3 months) in arrears a payment demand notice is
         served, advising debtors to either pay or to make the necessary arrangements for payment within
         14 days at the relevant Finance offices.
10.1.4   If the payment demand has not been responded upon, a final demand is issued. At this stage the
         outstanding amount is greater than 4 times the monthly levy.
10.1.5   If the debtor does not respond within 14 days, the account is handed over for collection and/or
         cancellation of the agreement by the Legal Division. The Legal Division can negotiate affordable
         arrangement agreements for payment with such debtors. Non compliance to such arrangements
         will lead to the eventual eviction of such a tenant.
10.1.6   Upon making arrangements with debtors, they are informed that the monthly arrangement amount
         must be paid in addition to the monthly levy.

10.2     SALES ACCOUNTS:

10.2.1   Accounts are followed up by the Finance Department with the Legal Services Division, to establish
         progress with the finalisation of each agreement of sale between the Municipality and the buyer,
         whilst a monthly statement for the balance is sent to the debtor. The Finance Department will not
         certify the transfer of ownership to the purchaser, unless the full purchase price has been paid.

				
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