Matjhabeng Local Municipality FS 184 SCOPA JUNE 2018 Matjhabeng Local Municipality FS 184
Introduction To provide detailed responses to the matters raised by the Standing Committee on Public Accounts (SCOPA).
Short Background The municipality has a historic Eskom debt that was incurred over the years. The total amount outstanding for Eskom as at 28 February 2018 amounted to R 1,8billion.
Eskom arrears Month Opening balance Current account Interest on overdue account Less payment Adjustment Total outstanding Jul-17 R 1 458 532 520,52 R 58 493 630,81 R 16 335 381,43 R -30 000 000,00 R - R 1 503 404 465,76 Aug-17 R 1 503 361 532,76 R 59 246 843,23 R 17 724 070,86 R 1 580 332 446,85 Sep-17 R 31 774 586,00 R 14 704 111,55 R 1 626 811 144,40 Oct-17 R 32 249 293,12 R 17 179 421,39 R 1 676 239 858,91 Nov-17 R 32 189 137,05 R 16 885 712,48 R 1 725 314 708,44 Dec-17 R 31 021 193,93 R 19 190 116,88 R -32 249 293,12 R 1 743 276 726,13 Jan-18 R 32 772 575,51 R 18 736 442,38 R 1 794 785 744,02 Feb-18 R 29 933 364,61 R 20 296 109,96 R -10 000 000,00 R 1 835 015 218,59 TOTAL AMOUNT DUE-ESKOM
Eskom payment arrangement The municipality entered into a payment arrangement with Eskom during March 2018. The arrangement was tabled in Council for adoption. Since the payment arrangement has been entered into during March 2018, the municipality has been paying the current account on a monthly basis which ranges between R33m and R35m per month. The payment arrangement commenced in March 2018 and the last payment will be made July 2031. The payment arrangement will be over a period of 13 years. An amount of R 45 000 000 on arrears must be made on a quarterly basis to Eskom. From July 2017 to date the total amount paid to Eskom is R 181 Million.
Municipal sources of revenue Main Sources of Revenue 1. Electricity 2. Water 3. Property Rates 4. Sewer 5. Refuse Removal
Municipal sources of revenue conti.. Other Revenue Sources. 1. Angling Licences 2. Ploughing Of Stands (Public Institutions) 3. Rental of public parks and open spaces. 4. Sewerage Sludge. 5. Pounds. 6 .Escort Services. 7. Advertising Costs. 8. Driving fees. 9. Trespassing Fees. 10. Renting of Sports Fields. 11. Renting Of Recreation Facilities. 15. Library fines and late return of items.
Municipal sources of revenue conti… 16. Welkom Airport Landing Fees. 17. Lease of hangers 18. Lease of parking space (Taxi’s). 19. Rezoning fees. 20. Subdivision. 21. Paving of Sidewalks. 22. Cleaning of Sewerage. 23 .Levy on Industrial Effluent Water. 24. Water Connections. 25. Water Tanker Services. 26. Termination of water supply due to non-payment or tempering. 27. Application or Sundry services received from the public and institutions. 28. Purified water Supply.
Municipal sources of revenue conti.. 29. Electricity connections. 30. Temporary Electrical connections. 31. Electricity installation connection fees. 32. Testing of electrical meters. 33. Fumigating costs. 34. Refuse disposal site. 35. Bulk and Special Refuse. 36. Dead animals. 37. Cutting grass. 38. Rental stock. 39. Cemeteries. 40. Digging of graves. 41. Building Plan fees. 42. Fire and Rescue Services. 43. Traffic Services.
Municipal Collection rate (billing vs actual) Month ESKOM Billing MLM Billing MLM receipts Eskom billing vs MLM billing Collection rate Eskom vs MLM Collection rate billing vs receipts Jul-17 R 74 829 012,24 R 55 803 773,00 28 949 374,64 74,58% 38,69% 51,88% Aug-17 R 76 970 914,09 R 57 887 791,48 44 962 645,05 75,21% 58,42% 77,67% Sep-17 R 46 478 697,55 R 59 516 576,06 44 541 270,75 128,05% 95,83% 74,84% Oct-17 R 49 428 714,51 R 47 729 758,09 47 029 756,40 96,56% 95,15% 98,53% Nov-17 R 49 074 849,53 R 41 597 697,84 40 897 129,86 84,76% 83,34% 98,32% Dec-17 R 50 211 310,81 R 41 468 220,26 33 480 618,83 82,59% 66,68% 80,74% Jan-18 R 51 509 017,89 R 46 492 990,61 39 351 141,08 90,26% 76,40% 84,64% Feb-18 R 50 229 474,57 R 39 359 763,02 37 402 539,00 78,36% 74,46% 95,03% Mar-18 R 30 770 407,65 R 47 701 673,89 37 787 782,53 155,02% 122,81% 79,22% Apr-18 R 36 024 584,47 R 43 161 625,60 36 301 584,23 119,81% 100,77% 84,11%
Proposed tariff increase 18/19 Proposal for tariff 2018-19 Tariff % Increase Yearly Revenue Avg / Month % of Total Total kWh c/kWh Number of Customers IBT DOMESTIC 4,00% R 142 844 871,18 R 11 903 739,26 22,62% 82 923 689,04 R 1,72 13 482 IBT INDIGENT R 7 054 931,07 R 587 910,92 1,12% 4 146 145,78 R 1,70 1 054 PREPAID DOMESTIC 9,52% R 82 161 314,82 R 6 846 776,23 13,01% 49 004 098,32 R 1,68 13 016 FLAT BUSINESS 6,84% R 108 486 907,97 R 9 040 575,66 17,18% 55 613 109,77 R 1,95 3 209 LARGE LV 11,15% R 74 948 203,65 R 6 245 683,64 11,87% 42 961 374,93 R 1,74 391 TOU LV R 65 747 871,43 R 5 478 989,29 10,41% 36 182 557,35 R 1,82 98 TOU MV 7,69% R 133 412 183,17 R 11 117 681,93 21,13% 83 383 867,17 R 1,60 31 STREET LIGHTS R 4 182 781,15 R 348 565,10 0,66% 3 493 818,00 R 1,20 139 DEPARTMENTAL R 9 483 041,73 R 790 253,48 1,50% 8 234 316,02 R 1,15 195 TOU RESELL 4,53% R 3 101 701,35 R 258 475,11 0,49% 1 171 658,36 R 2,65 15 TOU COMMERCIAL R - R - 0,00% - TOU RESIDENTIAL N/A 6,83% R 631 423 807,51 R 52 618 650,63 100,00% 367 114 634,75 R 1,72 31 630
Revenue Enhancement Strategies applied The Executive Mayor established a Revenue Enhancement Committee. The committee meets on a weekly basis. The committee consists of councilors and senior officials of the municipality. All issues relating to revenue, setting of targets and monitoring of performance are performed by the committee. Water and electricity of defaulters are disconnected on a weekly basis. The committee is also responsible for planning the disconnection programme.
Challenges to revenue collections 1. Electricity by-passes and tampering. 2. Illegal electricity and water reconnections. 3. Aging Electricity infrastructure. 4. Stuck meters for both electricity and water. 5. No capital budget for electricity infrastructure and replacement of meters. 6. Old debt irrecoverable. 7. Electricity losses = 13,25% (2016/17) 8. Been unable to effect electrical disconnections in all six municipal townships. 9. Illegal mining 10. Provincial Public Works debt. (Debt return)
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