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BCC financially constrained

11 Jan, 2022 - 00:01 0 Views
BCC  financially constrained

The Chronicle

Nqobile Tshili, Chronicle Reporter

LOCAL authorities are working towards adopting an electronic management system to improve revenue collection and data storage in municipalities.

This comes at a time councils such as Bulawayo City Council (BCC) are failing to effectively collect revenue, hampering service delivery.

(BCC) is struggling to recover $2,1 billion owed by rate payers, while it owes creditors $1,8 billion.

However, adoption of the Local Authorities Digital Systems (LADS) could address the local authority’s shortcomings.

The new system can help council improve management of housing applications and waiting lists, cemetery records, procurement processes, tracking management processes and service provisions in local authorities.

The LADS application was created by the Harare Institute of Technology with support from international agencies.

Mutare City Council (MCC) has already adopted LADS and is now able to collect up to 80 percent of its total revenue and cleared all its debts, while other local authorities are collecting just 20 percent of their total revenues.

Bulawayo secretary for provincial affairs and devolution Mr Paul Nyoni said his office is already in consultation with BCC on adoption of the new electronic system.

“More than 20 local authorities have adopted LADS and have increased their revenue collections.

For instance, MCC is now collecting 80 percent in terms of their monthly collection using the new system.

But at this moment we are building that critical mass allowing the local authority to also assess the system so that they can adopt it from a point of knowledge rather than just joining something that they are not sure of,” said Mr Nyoni.

“In terms of Bulawayo, I can tell you that we are already in discussions as Central Government and the local authority in terms of adopting the new system.”

He said after adopting the electronic management systems, MCC has also been able to service all its creditors.

Mr Nyoni said it is expected that with improved revenue collection, BCC will be able to improve on service delivery.

Council is struggling to effectively deliver services due to cash flow challenges caused by ratepayers’ failure to pay their bills.

BCC finance director Mr Kempton Ndimande said they are yet to evaluate the LADS efficiency, although they are set to meet Government over its adoption.

“Every five years we evaluate our systems to assess if the systems we are using are up to standard or there is another better one in the market.

We have not tested the operations of LADS, but what we know is that it is an application that is produced by HIT in partnership with some international agency. 

“So, we are waiting to engage the secretary for provincial affairs and devolution before engaging HIT to see its capabilities before considering adopting it.

So far, the system that we are using is very good,” said Mr Ndimande.

He said it would be improper for council to link debt collection to LADS.

“Debt collection relates to the attitudes of people in your local authority and the attitude of the local authority in trying to get its finances.

Most of the time, people pay rates after being forced. We have already procured several vehicles that will assist in debt collection,” he said.

“We are in the process of setting up a debt unit which will be slightly bigger than what we have at the moment and will cover more households in a day.

So, if we implement these debt collection strategies, the city’s financial position will be fine, but at the same time in debt collection we have to be considerate of the poor.

We have to show Ubuntu in debt collection and consider all variables.” 

In the BCC monthly minutes released last Wednesday, the local authority said it was too resource constrained to go after debtors.

Council’s debt to creditors increased by 17 percent, while its debtors increased by six percent.

BCC said residents have the highest debt of $1,3 billion, followed by industrial and commercial debtors at $651 million, Government ($156 million) and parastatals and self-financing ministries ($56 million).

BCC owes Zesa $1,3 billion, employees $200 million, the Local Authorities Pension Fund (LAPF) $100 million, trade creditors $67 million as well as substantial amounts to several other institutions.

“Council is running the risk of being unable to collect the debt and consequently pay the creditors. In order to manage creditors, management has made arrangements with various creditors to settle dues.

Meanwhile, to assist ratepayers settle their dues, council availed platforms such as EcoCash, One Wallet, Telecash and internet banking for ratepayers as alternative ways to make payments,” read the minutes.

BCC said its resource constrained to effect debt recovery strategies of cutting water supplies on owing residents and institutions.

“The challenges being faced in debt recovery are as follows: Limited vehicles to effect service restrictions and serve customers with notices and final demands.

The credit control section has only three vehicles and these are inadequate to match the growth of the city and the growing debt and limited number of cut off teams,” read the council minutes. — @nqotshili

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