Bridging the power gap: navigating municipal challenges and securing finance with STS

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Category: Funding and Treasury

Bridging the power gap: navigating municipal challenges and securing finance with STS

In a decisive move, the City of Tshwane launched a revenue-collection campaign, disconnecting electricity to non-paying customers in early February 2022. They’ve upheld their commitment to a “no fear, no favour” approach, targeting approximately 533 government accounts and 528 business accounts.

This campaign has prompted ordinary residents of Tshwane to ensure their municipal bills are up to date as the situation directly impacts them. After addressing government departments, embassies, and businesses, the focus has shifted towards community schemes with outstanding debts. In a recent announcement, The City of Johannesburg (CoJ) is following suit.

Are you aware of your community scheme's financial status?

One concerning issue is the lack of awareness among residents about their scheme’s financial health. With other municipalities likely to follow suit, unit owners are urged to verify their scheme’s municipal accounts.

Many residents were caught off guard discovering their bodies corporate had fallen into arrears with municipal accounts. Despite paying levies diligently, residents face the threat of power and service cuts. This has led to complaints about unexpected special levies to cover arrears.

Factors contributing to community schemes' financial challenges:

Managing agents, trustees, and executive committees have a duty to ensure financial stability. However, factors like load shedding, a turbulent economic climate and rising costs pose challenges. Increased prices for fuel, electricity, and maintenance strain budgets, often exceeding levy income.

Challenges like unforeseen expenses, inadequate financial management, and arrear levies jeopardise schemes’ financial health. Levies, vital for municipal payments, when unpaid, lead to financial strain or service disruptions.

How can STS help maintain financial stability?

STS offers tailored solutions regardless of a scheme’s financial state. For financially sound schemes, solutions maximise reserve fund returns, while struggling schemes can benefit from budget balancing and financial stability assistance.

Facing potential disconnection, many Tshwane schemes sought STS’s guidance. Solutions ranged from using reserves to exploring funding options, and clients commended STS for our professionalism and effective solutions.

How can STS help maintain financial stability?

Let STS customise a funding solution to keep your lights on hassle-free!