Municipalities are entrusted with the responsibility to provide services to the communities quickly and effectively, which necessitates the acquisition of financial resources and the development of institutional capacity. However, the municipality’s difficulty in collecting revenue has resulted in a disparity between their available financial resources and their municipal expenditure needs. Consequently, the revenue collection challenge must be addressed in order for the municipality to be self-sustaining. It is admissible for municipalities to finance their operations through the charging of fees for essential services, the addition of surcharges to fees, tariffs, levies, and duties.
Municipalities are in charge of providing basic services to millions of households across the country. Revenue collection takes place on the basis of the different critical services including the top 5 (Property Rates, Sewerage, Waste, Water and Electricity charge). In some cases, the services are limited to 4 services in instances where Eskom supplies electricity directly to the consumer. Therefore, it is very important that the revenue collection is done on time and correctly so that the municipality can provide quality services to its customers.
Historically, metering has posed a challenge to municipalities. Meters are cumbersome, difficult to read (and in some cases, difficult to access), and not always precise. People are increasingly unwilling to allow a meter reader to enter their property in order to obtain a reading. In the past, there has been a tendency to make errors in meter reading and billing data. These errors have been caused by equipment failure, human error, and other factors. The primary objective of rectifying these errors is to ensure that the consumer is treated fairly. Common errors include not taking on meter readings on time, not changing meters on time, incorrectly applying conversion factors, applying incorrect tariffs, and equipment failure. To rectify these errors, a consistent and reasonable methodology must be applied, which is also partially governed by the provisions and principles of the electricity and water supply by-laws. It is essential to maintain these meters on a regular basis to ensure that the consumption are correct and customers are correctly billed.
Water and electricity metering services are of paramount importance in that they necessitate the reading of meters to ascertain the consumer’s consumption. The consumption of these services is subject to continuous changes and must be accurately recorded in order to ensure that the bill is credible and acceptable to the consumer. Non-compliance with this requirement impedes revenue collection as consumers record queries and refuse to pay for bills they deem inaccurate or fail to record their consumption of the services. To guarantee that the client bears the responsibility for the consumption, both water meters and electricity meters must be read on a monthly basis.
The reliability of the Meter Reading service must be such that the consumer is able to pay without any hesitation or queries. The consumer’s meters must be read consistently and accurately, which must be done at least once per month. This provides the consumer with the assurance that they will be able to pay for the services they have engaged in. If the meters are correctly read, there will be no need for queries or interim payments.
The automated process is the most effective method of monitoring for the use or use of a service, however, it is costly. People install prepaid electricity meters as this allows them to track their usage. High consumers, such as industries/ large enterprises, use metering online services (MOL). With the current technology available, it is possible to have a smooth process, such as reading meters, with minimal human intervention. The downside of automation is that it can lead to the loss of employment or the creation of new jobs. Meters which can be read by a large number of people can now be read by a small number of people, resulting in the redundancies of staff.
Many municipalities are faced with the dilemma of outsourcing or doing in-house revenue collection. Unfortunately, municipalities, particularly those in metropolitan areas, are unable to provide this service, so they outsource it to contractors. This manual process employs a large number of personnel and requires the addition of technology, as without the technology, the manual process can be seen as suspect. When done consistently, the manual process assists in data purification, identifying meters with maintenance issues and creating jobs, as well as the visibility of people reading meters on the ground. This creates a sense of accountability for service providers, which in turn increases the monetary value of the service if done correctly. Once customers receive accurate statements, they can pay their municipal bills, resulting in increased revenue.
The manual process can be a disadvantage, as it involves human intervention and is therefore perceived as unreliable by both the consumer and the local authority. The level of transparency becomes questionable as there is perception that the estimates are not scientifically calculated but rather thumb sucked. To counteract this, a system must be configured to enable GPS coordinates, Date stamps, and Pictures to verify the accuracy of the reading.
In order to ensure the credibility, visibility, and accountability of the manual system, it is necessary to outsource Meter Reading in order to create employment opportunities. This outsourcing process involves the signing of service-level agreements with all parties involved, which require them to meet the municipality’s expectations. Furthermore, this outsourcing process allows for the hiring of project managers, known as Finance Meter Management Advisors, to oversee the Meter Reading Contractor’s work. The accuracy of Meter Reading is essential for the collection of revenue related to Electricity and Water Services, as late and inaccurate readings can impede the execution of credit control measures. Therefore, timely and accurate Meter readings are essential for the Municipality’s financial stability, which in turn affects its ability to provide services effectively.
The municipality relies on the revenue collected to provide a range of services to consumers, in addition to paying for these services to relevant service providers like Rand Water for water supply and Eskom for electricity supply to the municipality. There are also several other service providers and all the municipality workers that need to be paid.
The municipality’s cash flow depends on the revenue collected. The meter reading is an important service that municipalities depend on to collect revenue, provide financial services and provide effective service provision. It is important to ensure correct readings, correct errors and queries quickly and hold people accountable by using automated or manual processes depending on the municipality’s resources and needs.
