Cape Town residents urged to pay overdue rates to avoid legal action

By Songezo Ndlendle Time of article published Mar 12, 2019

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CAPE TOWN - The City of Cape Town on Tuesday urged residents to continue paying their rates as the income received from rates and services enables the delivery of quality municipal services, and warned that stern action will be taken against serial defaulters.

The city added that it would go after those who are able to pay but refuse to do so, while at the same time offering assistance to residents who are experiencing financial difficulties.

During January, 14,203 letters of demand were sent out and 607 debtors were handed over for adverse credit listing the city revealed in a statement.

The city added that in the current financial year it has made close to R3 billion available to provide rates refunds and indigent relief to qualifying residents. The proposed funding earmarked for social assistance in the next financial year was currently being discussed as part of the budget process.

“It is really important that we all contribute our fair share for services. Those who are in financial difficulties must approach us for relief. Hoping that the debt will go away or ignoring the problem is not the answer, and there is help on offer,” said the city’s mayoral committee member for finance, Ian Neilson.

“As a caring city, we make allowance for residents who are unable to pay for basic services to make representation to the city for relief, and for those who are struggling to pay their municipal accounts to enter into an agreed arrangement plan to pay off their arrears.”

He added that if those who have the means to pay refuse to pay for services that they use, it has a marked impact on the sustainability of the city.

“It is vital that we instill a culture of payment. Residents need to acknowledge that while we all have rights, we all have responsibilities too. If any resident’s water is restricted, electricity supply disconnected, prepaid electricity purchases limited or if legal action is instituted against them, this is done as a last resort," Neilson added.

“This only occurs if residents have ignored all the notices sent to them and they have not made any attempt to obtain assistance from the city. We must continue to focus on financial resilience in order to continue providing services.”

Neilson said the city would continue enforcing payment of outstanding debts through effective debt management actions, which may include, among others, the collection of all arrear debt through prepaid electricity purchases, property owners being handed over for adverse credit listing at relevant credit bureaus, and accounts being handed over for legal action to appointed attorneys to initiate legal recovery actions, which could lead to a sale in execution of the property to recover the municipal debts.

A total of 6,619 prepaid electricity blocking charge collection letters were delivered and 136 accounts were sent for prepaid electricity purchases collection during January 2019. 

If the debt is still not settled, then these debtors will be handed over for legal action, according to Neilson.

“The total cash collected during January was approximately R2,5 billion, reflecting an increase of R365,7 million compared to that of January 2018. The total billings for January were approximately R2,8 billion, which reflects an increase of just over R151 million when a year-on-year comparison is done,” he said.

African News Agency (ANA)

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