Page 162 - UGU Dstrct Mun IDP Report '21-22

3.8.4 Revenue Enhancement and Protection Strategies
On average the total revenue of the municipality is made up of 67% grant income and 33% of own generated income as reflected in Table 3.13.3.1. The municipality’s grant dependency is high and thus the need for the municipality to increase own generated revenue. The municipality has therefore, identified revenue management and enhancement as one of the key elements to lifting the municipality from its current financial distress and every attempt is being done to ensure it functions effectively and efficiently. The summary of issues identified in the current revenue position of the municipality analysis include:
The District Municipality is directly losing revenue given the incompleteness of billing as well as the inherent incompleteness of the consumer database;
• There is a lack adequate documented procedure manual;
• That a substantial portion of meters are not physically read but are estimates;
• Lack of consistency in addressing and resolving customer queries;
• Lack of co-ordination or linkage of processes between Revenue Section and other service units such as Water Services,
Customer Relations, Environmental Health etc.;
• Tariff determination is not driven by the scientific and factually accurate cost of providing the services;
• Inability of the Revenue Management System to produce usable statistics to aid factually accurate and scientific data
analysis as a means to aid fact-based decision making by Management;
• Inability to apply effective credit control and debt management processes and procedures;
• An un-assured integrity of the Indigent Register; and
• Absence of an approach to identify and resolve the underlying causes substantial water losses, this in addition to the
water loss model not necessarily technically robust in terms of best practice.
Table 3.13.4.1: Ugu District Municipality Revenue
Revenue Source
2017 / 2018
2018 / 2019
2019 /2020
2020/21
2021/2022
2022/2023
2023/2024
Total Revenue
R 1 082 782 102
R 1 069 767 089
R 1 223 035 657
R 1 472 096 871
R 1 442 344 213
R 1 515 201 514
R 1 577 856 153
Own Revenue Sources
R 368 262 765
R 334 824 089
R 403 518 645
R 613 159 871
R 582 024 213
R 613 813 514
R 644 469 135
Grants and Subsidies
R 714 519 337
R 734 943 000
R 819 517 012
R 858 937 000
R 860 320 000
R 901 388 000
R 933 387 000
% Own Revenue Sources
34.01%
31.30%
32.99%
41.65%
40.35%
40.51%
40.84%
% Grants and Subsidies
65.99%
68.70%
67.01%
58.35%
59.65%
59.49%
59.16%
Source: Ugu DM Treasury, 2020
The Revenue Enhancement Strategy presented recommendations after taking into consideration the issues stated above that hinder effective revenue management and renders the environment not conducive to increased levels of revenue at the District Municipality. It was established that Revenue Enhancement of the Municipality is not so much about finding additional streams of revenue, but it is more about the efficiency to bill and collect the revenue that rightly and legally belongs to the municipality. Therefore, the focus of the Revenue Enhancement Strategy will primarily be on the following issues:
• Data cleansing and database management;
• Procedure Manuals including Customer Relations;
• Alignment of Revenue Management to other departments;
• Credit Control and Debt Management; and
• Management of Indigents.
• Water Loss Management
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