Revenue is the cornerstone of the functionality of any municipality. Without revenue, the municipality cannot effectively perform service delivery activities. Municipal revenue generation will be the hardest-hit by the COVID-19 lockdown.
- Residents will not be able to make payments at the usual pay points during the lockdown—residents may avoid travelling to public places to reduce their risk of contracting COVID-19.
- Residents may be unable to pay bills due to lack of income.
- Failure to bill consumers on time
- Business closures will result in reduced consumption-based billings.
- Retrenched employees will increase the number of indigents.
- Collection rates will decrease, and irrecoverable outstanding debt will increase.
- Drastic decline in projected municipal incomes that will leave municipalities with unfunded expenditure and cashflow problems.
RCA RESPONSE SOLUTIONS
- A mobile application that allows all consumers to receive bills and make payments on their mobile phones (kindly refer to “Section 6: Life after COVID-19” for more details).
- A long-term Revenue Enhancement Strategy focusing on land and property use; this will entail a detailed look into the current town planning system.
- Review of all municipal property and its current utilisation with the aim of aligning rentals to market rates, whilst identifying properties that are not generating income and disposing of them to improve cashflows in the short term.
- Realistic income projections that will be used to inform the Adjustment Budget.
- Debt management solutions that will offer consumers payment plans aligned to the current economic status.