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Wednesday Sep 05, 2012

Cape Town throws lifeline with water debt write-off

The City of Cape Town will write off more than R1.8 billion in arrears this year, related to water bills for poor households.

The write-offs will apply only when the city moves on to properties, fixes leaks to deal with water waste and installs water-management devices.

They apply to households where the property is valued at less than R300 000, or based on income.

The city said the move would combat water scarcity and prevent people from falling into further arrears. In these cases, the city pays to fix leaks.

During yesterday's finance portfolio committee meeting, members discussed the city's rates payments.

Residents can apply for a range of rebates on their services. The rebatesdepend on monthly income and the value of the home, and in some cases senior citizens also qualify.

Danny Christians, a member of the committee, asked whether the city could increase the R1.4 billion it had set aside for write-offs in the next financial year.

Christians asked whether the city could raise the income threshold for rebates from R3 000 to R4 000 a month.

Ian Neilson, deputy mayor and mayoral committee member for finance, said several factors had to be considered when budgeting for writeoffs.

Neilson said the city was also looking at the ANC's proposal not to charge schools for basic services. This measure would affect the city budget, if passed.

In July, more than 2 000 residents received warning letters to pay their electricity accounts. Another 6 815 received the same concerning their water bills.

In that month, 1 332 electricity connections were cut after ratepayers failed to heed warnings.

In the meantime, those who can afford to pay their rates are injecting millions each month into city coffers.

Trevor Blake, the city's director for revenue, said records for July showed all the city was on track to "break all records of cash collection".

Blake said although they were still waiting for the final figures, it seemed just over R1.6 billion would have been collected in July.

More than 96 percent of city residents paid their rates on time in that period.

Neilson said the revenue department had helped maintained a "sustainable stream" of income. This meant the city had more money for major projects.

Over the past five years, the City of Cape Town has spent R20bn on capital projects.

Of this, R6bn came from the city's own money. Other funds were borrowed or were grants from the national government.

Cape Argus

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