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City Working On Proposal To Write Off Pensioner Debt And Interest …the Local Authority Act is the barrier


By:Nghiinomenwa-vali Erastus and Lavinia Shawapala
The City of Windhoek is currently working on a proposal to write off debts of pensioners and interest for all residents.
The City is, however, busy with audits in line with its approval processes, which they hope to conclude by the end of October 2023.
This was revealed by the Deputy Mayor of Windhoek Magdalena Lombardt when talking about the matter of the utility debt burden of Katutura residents who submitted a petition to the City on 27 June 2023.
The aggrieved Katutura residents, most of them pensioners, had organised themselves to challenge the City to do away with reading estimations, clearing their arrears, and installing prepaid water metres to prevent them from falling into arrears in the future.
They cited their inability to repay the debts which, for most, are over N$400,000 per household. They vowed not to leave the stone unturned on this issue.
In revealing the city debt proposal, Lombard assured the residents that the management is committed to a thorough policy-driven approach, as they “will not be rushed into hasty decisions”.
The Deputy Mayor further cautioned that the process of writing off pensioner’s debt and interest for the rest of the residents needs to be executed cautiously to ensure long-term sustainability of the local authority.
Lombardt told the community that the city management is actively considering various debt management modalities and is bound by legal mandates such as the Prescription Act and interest charges as per the Local Authorities Act.
According to the Deputy Mayor, the legal limitation emanating from the Local Authority Act prevents them from just freezing interest on arrears.
She urged the community to look at the Act (1992) despite its numerous amendments some years ago.
Therefore, “we cannot freeze interest on arrears, and I urge the public to familiarise themselves with the relevant amendments,”she said.
Lombardtexplained that for the pensioners’ payment arrangements, a principal decision was taken by the City to charge only a 15% down-payment, instead of the 33.33% requirement as per the City’s Credit Control Policy.
While reiterating that no pensioners’ residential property accounts are handed over to the Redforce Debt Management company.
Responding to the residents’ specific request with regard to the interruption of metered services, she said the City has the mandate to suspend prepaid services to recover outstanding debts for various services rendered.
The Electricity Regulation 20 indicates that if an account is not paid by a consumer before the expiry of the last day for such payment the Council may suspend the supply of electricity to such consumer until the amount due is paid by the consumer.
As for the call to install pre-paid water and electricity metres, Lombardt explained that the process has faced challenges due to financial constraints and limited manpower.
She said the electricity prepaid installations have always been free for pensioners, with the only requirement being that the pensioners apply for the installation of prepaid electricity metres.
As for the prepaid water metres, there are currently payment options available to pensioners and general residents, which are upfront payments or repayment of the prepaid metre installation cost.
The repayment is done over a maximum period of five years, deducted through the purchase of the unit at an interest rate of 11%.
On the issue of water consumption estimates, she explained that when there is a pipe burst or leakage on the main line, the City bears the cost of the repairs as well as the losses and not the residents.
However, when there is a leak on the residents’ property or after the water meter installation, the resident or owner is responsible for fixing the leak and the consumption.
The community has also called on the City management to end its contract with the external debt collector Redforce.
According to her explanation, prior to the appointment of the external debt collector, clients’ accounts were handed over to attorneys for further debt collection.
“Those accounts handed over for legal collection to external attorneys accumulated vast amounts of debt, which placed a significant financial burden on the City and the clients,” the Deputy Mayor explained.
Since the attorneys charged legal fees even if they had not collected the amount from the defaulters as opposed to their current arrangement with the external debt collector.
Lombardt added that the previous collection process proved to be costly, with no surety of financial benefit to the City or the client.
According to her, there is no interest charged on accounts handed over to the external debt collector for all residents, apart from the collection fee of 10% of each payment made.
The Deputy Mayor also highlighted the City’s concerns about residents who are not pensioners and who are using pensioners’ situations.
She revealed that the individuals are also petitioning and rallying support whilst having arrears themselves, as they “shy away from their obligations to pay for their consumption”.
She said such cases, including repeated re-connections of defaulters’ services, will be thoroughly investigated and addressed.
Lombardt called on the Katutura community to remain calm and objective to allow for the administrative processes to reach definitive conclusions and resolutions.
Spokesperson for the Katutura Residents Committee, which delivered the petition to the municipality, Shaun Gariseb, however, described the municipality’s response as selective.
“We gave out more than five recommendations but they only pointed out the pensioners. That shows that these people have no response to what we are saying. The recommendations were very clear. We said that we do not just want a write-off. If we were people who did not want to pay or to honour our municipal obligations, we were not going to have those recommendations,” Gariseb told The Villager.
The spokesperson of the committee believes that the response was done at the last minute in a “desperate” attempt to stop the residents from protesting.

Nghiinomenwa-vali Erastus

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