On September 12, ratepayers from across the metro will be at the East London High Court to challenge the 80/20 credit control policy with the intention to have it declared unlawful until it is promulgated as a bylaw.
The group of more than 30 ratepayers are being represented by Brandon Blignaut of Niehaus McMahon Attorneys.
The 80/20 credit control policy, implemented in March, allows for 80% of a ratepayer’s electricity purchases to be deducted to service their water and fire levies debt with the municipality, with only 20% left for units.
High court judge Sally Collet recently found that the city’s failure to give ratepayers 14 days written notice before implementing the 80/20 credit control measure was unlawful.
In an interview with SABC on September 1, BCM executive mayor Princess Faku said the fault lay with unreliable Post Office services that hindered the municipality’s capacity to have notices delivered. Faku said the 80/20 policy was scheduled to be reviewed by council in October.
Blignaut said: “I have nothing against the 80/20 policy because it is a good mechanism for the municipality to collect its money, however, proper steps for its implementation must be followed.
“The municipality’s own Systems Act tells them they cannot apply a policy unless it is promulgated into a bylaw and passed through council.
“If the policy is promulgated into a bylaw and steps are followed with debt collection such as issuing a 14-day notice, and the notice period lapses and the consumer has done nothing, then there is nothing unlawful about the municipality collecting its money.”
Blignaut said in its current form, the policy placed the most strain on indigent people who had limited budgets for their monthly electricity needs.
A more equitable credit control measure would consider a 60/40 split and provide the consumer with a notice period that would enable them to make provision for a repayment plan.
Blignaut said it was important for ratepayers to keep a written and stamped record of their disputes with the municipality, especially given that the bylaw compelled BCM to respond to consumers within 60 days.
Earlier this year, at a Thetha Nathi Roadshow, MMC for finance Afrika Maxongo confirmed the municipality would reconsider the 80/20 policy but that ratepayers remained responsible for settling their accounts.
He said receiving a bill was the same as receiving a notice, and that the 80/20 measure was a more lenient control as a consumer’s electricity was partially blocked, and not completely blocked as in the past.
DA councilor Geoff Walton said it was unfortunate that consumers had to turn to the courts to protect their rights, however, the number of failures at the implementation level of the 80/20 policy had necessitated it.
Walton said the policy could be promulgated by the end of the year.
He said the credit control bylaw had been presented to the council but there were several issues the council was not satisfied with. Despite this, the municipality went ahead with revenue collection.
Walton said: “Problems with the credibility of the billing system as well as disconnections and blocks have long been on record.
“While we agree the municipality must collect income due to it, it must do so in a fair and consistent manner.
“But I do not see the court setting aside the entire bylaw, nor the policy. They may well order that the provisos of the policy be set out in a bylaw and that would be acceptable.
“The DA has always held the view that any credit control action, and an 80/20 block, is a credit control action, and must be preceded by a notice as set out in the recent judgment. We have raised that concern on numerous occasions at the level of the CFO.
“Where consumers have approached us for assistance when blocked, it is one of the first questions we ask – was a notice sent to the consumer. Unfortunately, there is seldom a response on that, which leaves one with only one conclusion, that no notice was issued.
“The DA therefore agrees with the ruling of the high court that consumers must be given 14 days’ notice of an intention to either disconnect the electricity supply or to restrict it through the so-called 80/20 block.”
