1. Matjhabeng Local Municipality FS 184
SCOPA JUNE 2018
Matjhabeng Local Municipality
FS 184

2. Introduction
To provide detailed responses to the matters raised by the Standing Committee on Public Accounts (SCOPA).

3. 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.

4. Eskom arrears Month Opening balance Current account
Interest on overdue account
Less payment
Adjustment
Total outstanding
Jul-17
R ,52
R ,81
R ,43
R ,00 R
R ,76
Aug-17
R ,76
R ,23
R ,86
R ,85
Sep-17
R ,00
R ,55
R ,40
Oct-17
R ,12
R ,39
R ,91
Nov-17
R ,05
R ,48
R ,44
Dec-17
R ,93
R ,88
R ,12
R ,13
Jan-18
R ,51
R ,38
R ,02
Feb-18
R ,61
R ,96
R ,00
R ,59
TOTAL AMOUNT DUE-ESKOM

5. 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 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.

6. Municipal sources of revenue
Main Sources of Revenue
1. Electricity
2. Water
3. Property Rates
4. Sewer
5. Refuse Removal

7. 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.

8. 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.

9. 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.

10. 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 ,24
R ,00
,64
74,58%
38,69%
51,88%
Aug-17
R ,09
R ,48
,05
75,21%
58,42%
77,67%
Sep-17
R ,55
R ,06
,75
128,05%
95,83%
74,84%
Oct-17
R ,51
R ,09
,40
96,56%
95,15%
98,53%
Nov-17
R ,53
R ,84
,86
84,76%
83,34%
98,32%
Dec-17
R ,81
R ,26
,83
82,59%
66,68%
80,74%
Jan-18
R ,89
R ,61
,08
90,26%
76,40%
84,64%
Feb-18
R ,57
R ,02
,00
78,36%
74,46%
95,03%
Mar-18
R ,65
R ,89
,53
155,02%
122,81%
79,22%
Apr-18
R ,47
R ,60
,23
119,81%
100,77%
84,11%

11. Proposed tariff increase 18/19
Proposal for tariff
Tariff
% Increase
Yearly Revenue
Avg / Month
% of Total
Total kWh
c/kWh
Number of Customers
IBT DOMESTIC
4,00%
R ,18
R ,26
22,62%
,04
R ,72
13 482
IBT INDIGENT
R ,07
R ,92
1,12%
,78
R ,70
1 054
PREPAID DOMESTIC
9,52%
R ,82
R ,23
13,01%
,32
R ,68
13 016
FLAT BUSINESS
6,84%
R ,97
R ,66
17,18%
,77
R ,95
3 209
LARGE LV
11,15%
R ,65
R ,64
11,87%
,93
R ,74
391
TOU LV
R ,43
R ,29
10,41%
,35
R ,82 98
TOU MV
7,69%
R ,17
R ,93
21,13%
,17
R ,60 31
STREET LIGHTS
R ,15
R ,10
0,66%
,00
R ,20
139
DEPARTMENTAL
R ,73
R ,48
1,50%
,02
R ,15
195
TOU RESELL
4,53%
R ,35
R ,11
0,49%
,36
R ,65 15
TOU COMMERCIAL R R
0,00% -
TOU RESIDENTIAL
N/A
6,83%
R ,51
R ,63
100,00%
,75
R 1,72
31 630

12. 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.

13. 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)

14. THANK YOU