WATER CONSERVATION AND CREDIT CONTROL AND DEBT COLLECTION POLICY February 2009

PRESENTATION CONTENT Introduction – Water Scorecard Legislative obligation Credit Control and Debt Collection Policy and By-law - Improved benefits to the poor who register as indigent - Rates rebates for Senior Citizens and Disabled Person Total Service Debt Water Debt for City of Cape Town Areas

Water Scorecard 26 % savings on unconstrained water usage Collection ratio for water increased from 67% to 92% Leaks repaired at 50 school for free indigents properties have had their leaks fixed for free litres of treated effluent re-used R6m water pressure reduction scheme in Mitchells Plain - savings recouped in 1 year Target of 40 km of water pipes to be replaced in 2008/09 – 18km completed YTD water management devices installed across the City in areas such as Atlantis, Brown’s Farm, Constantia, Delft, Gugulethu, Lost City, Ocean View, Parklands, Samora Machel, Mitchell’s Plain. An additional will be installed by mid-2009 in Table View and Westbank. Water stand pipe ratio exceeds National standards of 1 standpipe per 200 radius. City standard is 1 standpipe within 100 meters. City of Cape Town received 10 water related DWAF and WISA awards ISO accreditation achieved

LEGISLATIVE OBLIGATION In terms of the Municipal Systems Act 32 of 2000 a municipality: “ must collect all money due and payable, subject to this Act and any other applicable legislation” and “ for this purpose, must adopt, maintain and implement a Credit Control and Debt Collection Policy”

CREDIT CONTROL AND DEBT COLLECTION BY-LAW AND POLICY This By-law and this Policy were adopted at a Special Council meeting on 31 May 2006 and the By-law was duly published in the Provincial Gazette dated , as required in terms of the Municipal Systems Act of 2000.

Improved benefits to the poor who register as indigent. Registration criteria In order to qualify for registration as an indigent, an applicant must satisfy the following criteria: (a) the usage of the residential property must be predominantly private residential; and (b) the applicant must be- (i) the registered owner of the residential property; or (ii) an occupier of a child-headed household (all the occupants need to be 18 years of age and younger) which is registered in the name of the deceased parent or deceased parents; and (c) the gross total household income of the residential property may not exceed the maximum income of the Senior Citizens and Disabled Persons Rates Rebate Scheme which receives a 100% rebate as per the Rates Policy (was R1880 increased to R2 880). Double the State Pension is no longer applicable and is replaced by this sub-item

Improved benefits to the poor who register as indigent, continued (d) the applicant may not be the registered owner of more than one property; and (e) be a full-time occupant of the property; and (f) notwithstanding the aforesaid, owners of residential immovable property which have a Municipal value of R , or less, or as determined by Council from time to time, will be deemed to meet the criteria in sub-item (a) to (e) above and will be regarded as being registered (currently properties classified as indigent under this category. All properties with a municipal valuation of under R receives a R30 per month indigent grant towards their water and sewerage services). Council may determine the criteria as mentioned in sub-items (a) to (f) from time to time.

Improved benefits to the poor who register as indigent, continued In addition to the previously mentioned improved benefits, the writing off criteria for irrecoverable debt have been amended to allow the following: All debtors who qualify and are registered as indigent, (a) who are not employable and in receipt of a disability grant or a disability pension (b) who are 60 years of age or older; or (c) who qualify as a child headed household; will have their arrears written off once during ownership of the property, The current debt for water-related services as at 31/12/2008 is R2 billion City wrote-off R1.5 billion of arrears and parked arrears debt in 2006/07 financial year.

Rates rebate for Senior Citizens and Disabled Persons In addition to the previous benefits, those citizens that do not qualify as indigent, but are senior citizens or disabled can apply for the following rates rebate for the 2008/2009 financial year: Gross Monthly Household Income 2007/ /2009 %Rebate Rand Rand % % % % % % % % %

Requirements for Rates Rebate (Residential Properties) occupy the property as his/her normal residence; and be at least 60 years of age or in receipt of a disability pension; and be in receipt of a gross monthly household income (including that of all persons normally residing on that property) not exceeding R7 000 ; and not be the owner of more than one property; and provided that where the owner is unable to occupy the property due to no fault of his/her own, the spouse or minor children may satisfy the occupancy requirement; and provided that a usufructuary will be regarded as the owner; and provided that the criteria of a natural person may be waived at the sole discretion of the City to allow for a property owned by a trust where the total number of beneficiaries meets all of the other requirements for rates rebate; and provided further that the gross monthly income of all persons residing on that property be added to the gross monthly income of the beneficiaries staying on that property. The owner must submit the application by 31 August for this rebate to be granted for the financial year in which the application is submitted, failing which the rebate will not be granted.

Water Restrictions - Disconnections Commercial, Business and Industrial customers are disconnected Domestic Customers do not have their water supply disconnected, but have their water supplies restricted (customers not registered as indigents) or a water flow management devise fitted for indigent customers. Customers are never left without access to water. The intention of the City is not to restrict/ disconnect any water supplies for credit control measures but to install the flow management device (currently R80 mil provided on budget for installation of these devices)

WATER FLOW MANAGEMENT DEVICE Installation scenarios As part of the integrated water leaks project – Council repairs leaks on private properties (value less than R ) and by agreement install flow management devices and arrears are than written off. In the event that a domestic customer whose supply has been restricted for more than three times for non-payment and fails to pay after due process will have a flow management device installed. Flow management devices will be installed in all new housing developments. The device will be set at full flow or based on customer’s affordability. A domestic consumer may apply to be considered for the installation of a flow- control device at the applicable miscellaneous tariff as a means to control the total daily and monthly volume, set by agreement with the City, which that consumer will be liable for. Installation of such a device will be at the discretion of the City.

WATER FLOW MANAGEMENT DEVICES (cont..) Currently leaks had been repaired across the City and the water leaks project is ongoing. In total R50m has been written off as part of irrecoverable debt. Mitchells Plain installations : Projects to follow in current financial year 08/09 ie: (Tafelsig, Freedom Park & Old Tafelsig)

Registered Indigents Who agrees to have a water flow management meter installed receives: Free litre basic life line water allocation Indigent grant of R30 equal to an additional litres of water Available water is equal to 350 litres per day, unused water in a day is transferred to next day. Customer can request more water per month according to the available budget The customer pays after water has been consumed – no prepayment On agreement the water leaks as a once off are fixed and current arrears written off

FUTURE WATER DEMANDS STRATEGY To install Flow Management Devices at all Properties To constantly look at products (credit meter systems) to improve and enhance our current metering and Credit Control and Debt collection processes in the City. To continue to assist indigent customers by fixing leaks on properties to help keep water and sanitation bills affordable to customers. To continually educate and empower customers to manage and conserve the water resources.

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