Lack of political will to enforce credit control measures is one of the reasons Makana is heavily in debt, according to a document outlining a plan to turn the situation around.
Lack of political will to enforce credit control measures is one of the reasons Makana is heavily in debt, according to a document outlining a plan to turn the situation around.
As Makana Municipality's arrear debt rockets, its finance department is working on a plan to bring in what it's owed and the draft Revenue Enhancement Strategy is set to be tabled in Council next week.
The municipality's sharp rise in debt is due to a failure to collect all the money owed in rates, according to the draft strategy document. Instead of dropping during the 2011/12 and 2012/13 financial years, the arrear debt increased by 11%.
"The challenge we are facing in Makana municipality is to successfully turn around the current declining position and to build a sustainable municipality for the future. Revenue enhancement is one of the key elements of the turnaround strategies that can and should be used to address the challenge," the document reads.
Identified in the draft strategy as critical in helping the municipality become sustainable were its communication strategy; the provision of metered services; accurate billing and revenue collection.
"To effectively deal with the current challenges, Makana Municipality must plan and implement an effective and integrated revenue enhancement strategy," the document reads.
"To improve on the current business model, it is important to identify all the critical elements that currently affect the municipal revenue performance."
The document said the reasons for Makana's inability to collect its debt are numerous.
Those listed include "lack of political will to enforce credit control measures"; lack of accurate data on which credit control measures can be taken, and lack of skills and capacity to manage collection of outstanding debt".
The average collection rate of Makana Municipality for the current financial year ending June 30 is 75%.
The municipality is working towards collecting 95% of the money owed to them in the new financial year.
The Revenue Enhancement Strategy document will be tabled in Council on 20 June.
