Presented by: Ms Siyabulela Bashe Presentation to Western Cape - Revenue Management Master Class 2018 19 & 20 November 2018 REVENUE MANAGEMENT Presented by: Ms Siyabulela Bashe

PRESENTATION OVERVIEW Water restrictions implementation dates and book trends Areas identified requiring attention to improve revenue collection and solutions Other innovative solutions Importance of Agility and Transversality in Municipalities

Water Restrictions Implementation Dates and Debt book Trends In the following months, the debt increased to R9.062bn in April 2018, to R9.173bn in May 2018 and reduced to R8.34bn The arrears followed a similar trend , increased R5.849bn in May 2018 and then reduced to R5.27bn in June 2018 The increasing debt trend identified a need to review our processes and system logic

DEBT OUTSTANDING PER CATEGORY The above comparison reflects that the bulk of the debt outstanding is linked to residential properties and depicts an increasing trend in the residential debt

RESIDENTIAL DEBT BOOK BASED ON MUNICIPAL PROPERTY VALUATION (MPV) Monitoring the movement in each category allowed the City to identify where the consumption challenges were being experience Deal with the properties based on the approved policies and ensuring effective actions are taken

RESIDENTIAL DEBT BOOK CHARGES CLASSIFICATION The above comparison depicts the debt outstanding per service charge, reflecting that the bulk (71%) of Residential debt is linked to water and sewerage charges.

AREAS REQUIRING ATTENTION & SOLUTIONS Dealing with Top Water Abusers Water Management Devices were installed at the properties not adhering to the consumption levels The update of meters on the system The change in meters led to backlogs of meters changed on the ground not being updated on the system The delays in update lead to an increase in accounts billed with estimated readings Prioritisation of these updates ensured that the account are billed on accurate readings and not on historic consumption Reduction of estimated readings

AREAS REQUIRING ATTENTION & SOLUTIONS (2) Reviewing systematic logics and setting effective controls Reviewing of estimation logic Dealing with exorbitant accounts More effort and drive required from all the departments to deal with the extremely high billings and debts of indigent properties Although the City has always had a process to deal with indigent properties, it was important to review our process. Ensuring accurate billings of accounts, reducing wastage and limiting losses by effectively setting the Water Management Devices (WMDs)

AREAS REQUIRING ATTENTION & SOLUTIONS (3) Increasing the number of effective water restrictions for residential debtors in arears and effective water disconnections on non-residential debtors As the bulk of the debt is linked to residential property, it is critical that we take effective debt recovery action Prioritisation of accounts using the value of the debt and also taking into consideration the consumption pattern Implement a continuous Improvement approach Assessing operational weaknesses and strengths Although intention is to deal with all areas identified, focus is given on few priorities that will result to faster and impactful results Assigned specific teams to deal with specific challenges and areas of concern Assess every accomplishment as they can transform into significant improvements and increase productivity and change in service delivery

OTHER INNOVATIVE SOLUTIONS Use of mobility: Updating of meter changes and details remotely Updating of readings on the system The tool will also be used to improve efficiencies and dramatically improve effectiveness of the restriction and disconnection processes, including delivery of warning letters Use of technology to enhance Revenue Collection and efficiency: Automated Debt Management and legal collection Processes Collecting of Debt through Electricity Prepaid purchases Use of sms communication - prompting high response rate and improving revenue collection Looking at the option of using Smart View SMS communication

Importance of Transversality When there are challenges, working in silos seem to be the best option. Management responsibility: It is important to identify that silos form easily and should be actively managed Communicating the plan and the goal with all stakeholders is crucial to encourage transversality Transversal approach continues to be recognised as critical within the City and was identified as ODTP guiding principles: Dealing with the water challenges it was understood it was not only a water department’s challenges but all departments ensured their involvement when necessary. e.g. Safety and Security, Customer relations, Finance and Revenue Management

Importance of Agility With all the challenges which were experienced, an agile system was critical: Responsive management to deal with change and finding appropriate and effective solution Systems and technical support that helps with change. Reviewing of process and ensuring changes makes a difference over a short period. Local Government is regulated by relevant legislation Although regulated should use the legislation to support the decision and achieve the targeted goals It is important to remember with all challenges and constant demand of service delivery from Municipalities, Agility Trumps Efficiency!

Questions? Thank you