City takes steps to boost its annual revenue by billions

24 May 2017

 

The City of Johannesburg has announced two major plans that could result in its revenue increasing by up to R8.3 billion a year.

 

Delivering his inaugural Budget at Metro Centre in Braamfontein on Tuesday May 23, Member of the Mayoral Committee for Finance Cllr Rabelani Dagada said it was clear there was a significant number of properties in Johannesburg that were considerably undervalued.

He said it had been estimated, since the inception of the current General Valuation Roll, that R3 billion had been lost and could not be recovered.

MMC Dagada also said reports that had been commissioned under the previous administration had found that the City had an opportunity to increase its revenue by R5.3 billion a year from customers – many of them commercial users – who were not being billed.

But, Cllr Dagada said, the previous administration had failed to act on the recommendations. “However, we will act on them to ensure that we improve our revenue collection,” he said.

On the issue of the General Valuation Roll, the MMC said the City had allocated R10 million from the R55.9 billion 2017-2018 Budget to establish a panel for supplementary valuations to close the lost rates and taxes gap.

A further R25 million would be allocated to improve the property valuation process through the hiring of additional property valuers, he said.

“To put the matter in perspective for you, the City of Cape Town, which is far smaller than our metro, has more than 120 valuers. Our city has 19 valuers,” MMC Dagada said.

He said a 2015 report that compared City Power, the City’s electricity utility, to similar entities in other major metropolitan municipalities around the country and found that its non-technical losses on electricity were 2.6 times higher than the average benchmark.

“This equates to up to R2.2-billion in lost revenue on an annual basis. The resident of Johannesburg deserve more than an illusion of success. They deserve a professionally run City that delivers quality services,” MMC Dagada said.

The MMC said the City had begun implementing a number of interventions to end the billing crisis. The interventions include:

• The establishment of a Technical Support Services Unit to ensure complete billing, accurate and clear invoicing, an effective payment process, effective credit management, improved customer relationship management and timeous issue resolution;

• The establishment of a dedicated Revenue Nerve Centre to monitor the performance of the value chain in real-time, detecting revenue losses and escalating identified issues to the technical team;

• The integration of the meter-reading function into the Revenue Shared Services Centre; and

• The review of water and electricity by-laws with a view to reducing the period during which the City is allowed to use estimated readings.