Durban residents indebted to the eThekwini Municipality could soon find themselves at the receiving end of relentless phone calls from debt collectors looking to recover funds on behalf of the municipality.
Members of the Municipal Public Accounts Committee (Mpac) were briefed recently about the City’s plans to appoint debt collectors to pursue debtors.
“The Mercury” has seen a report tabled to the Mpac committee detailing the issue.
It provided committee members with a response on what the City is doing to address the concerns raised by the Office of the Auditor-General.
The AG audit had raised concerns about material debt impairments and material underspending of the budget up to June 30, 2023.
The City is owed close to R29 billion. Residents contribute to the bulk of the debt followed by businesses, government departments and entities.
To ease the debt burden on consumers and ensure they pay what they owe, the City has revived the debt relief programme. It allows customers to enter into payment arrangements with the metro.
The City has implemented several rounds of the programme. The last round registered success with more people signing on and more funds being recovered.
The councillors said they were briefed by City officials on the need for this step.
An official, speaking on condition of anonymity, confirmed that the City was looking at hiring debt collectors. “They are not looking at hiring many (firms) there will be around 10,” the official said.
The report also lists other actions to improve the collection of consumer debt, including the debt relief programme, disconnections, one-on-one sessions with major debtors and legal action.
It said a task team made up of the City, KZN Co-operative Governance and Traditional Affairs and Ingonyama Trust has been established to deal with the growing Ingonyama Trust-related debt.
ActionSA councillor Alan Beesley said external debt collectors were not the answer. “Only 25 credit controllers are employed within the City who oversee thousands of accounts. The City is looking to employ 10 debt collecting firms with a minimum of 50 agents each.”
Beesley said debt collection should be a core competency of the municipality.
“The City should ensure there is sufficient internal capacity to do this task.”
IFP councillor Jane Naidoo said introducing draconian measures like debt collectors to hound residents was unacceptable. To generate revenue the ANC-led administration in eThekwini should focus on running a clean and efficient administration, she said.
“They should roll out wide scale metering, clamp down on illegal connections and go after the government entities owing exorbitant debt,” she said.
DA councillor Siboniso Sibisi said they were not given details on how it would work. “The DA believes we should use internal processes first (in-line with the debt collection policy). External service providers to collect debt will result in part of the money that residents pay going towards these service providers instead of city coffers,” he said.
Mpac Committee chairperson Thami Xuma said he questioned whether the City was doubting its internal capacity to collect debt.
“They said they do not but want to strengthen it. They are owed almost a billion by government entities, they are owed by councillors. I understand why residents battle to pay but to be owed by councillors is not proper.”
The Mercury