SUNDAY INDEPENDENT / 26 JANUARY 2020, 2:00PM / DON MAKATILE
Johannesburg – If municipalities knew – and were willing to implement – just half of the things Miyelani Holeni talks about, there’d be no need to place many of them under administration.
The cherry on top would be that they keep the lights on as they are able to service their Eskom debt, which is close to R4billion.
Holeni is group chief adviser at Ntiyiso Consulting, a 100% black-owned firm of management consultants formed in 2005.
He said it is “now a group of companies offering various solutions, making systems more efficient and have gradually grown into the space of looking after municipalities,especially in social housing – that’s where we developed our IP”.
He spoke with an ease that makes the hardships besetting the country’s 278 municipalities look not so insurmountable.
“At the core of what we do, we wake up in the morning to look for problems and find sustainable solutions to fix those problems,” Holeni said of the very problems that have landed most municipalities in the red with Eskom and the auditor-general.
Ntiyiso has been cut into three – hence the reference to the “group of companies” – but it is the subsidiary Ntiyiso Revenue Consulting “which is the one that deals with municipalities”.
“We decided we want to help municipalities holistically, hence the construction of the three subsidiaries,” said Holeni.
He said the issue of revenue was the most pressing.
“Revenue is what pays Eskom, Rand Water, the people collecting refuse, pays salaries, repairing and maintenance of roads and the closing of potholes, and all those things that would constitute service delivery.
“Revenue is core.”
In 2007/2008, during the economic meltdown, municipalities were battling, Holeni said, and many started looking at ways to make themselves a lot more sustainable. It was foolish to rely on the fiscus as Treasury allocated only about 9%-12% of the funds, beyond that the municipalities must make their own money. “They must find the 85% to 90% through services they provide that they could be paid for,” Holeni said.
“This is where we looked at the space and found that officials could not immediately get to the mechanics of how to do this. It can be complex. Municipalities are manual, paper-based singular systems. That tends to introduce inefficiencies. Human beings can only do so much.
“We looked at the entire value chain, from start to finish.”
Holeni explained the value chain expertly – from the vacant land to a fully serviced house with water and lights and meters, detailing how municipalities could then begin billing the occupants.
Ntiyiso Consulting decided, he said, to “make this process a lot more scientific so that municipalities can be able to collect revenue through accurate readings and billing”.
Meticulous reading of the meters and the attendant billing are the bugbears of many municipalities, the source of the ire of many residents.
“The value chain has to work together. If they don’t pay, what do we do to collect? You don’t just start by threatening lawsuits to collect. You ensure you don’t miss one step of the revenue collection chain.”
Ntiyiso Consulting brings to the table what municipalities often fail to implement – stop all leakages.
The things Holeni talks about are common sense, not science. But these are the very areas municipalities fail in, like the valuation of properties.
These must be updated, he said, “so you can calculate property rates”.
You can only get so much, you can only be so efficient, Holeni said, regarding the Big Five sources of revenue – electricity, water, sanitation, property rates and refuse collection.
“We see billboards, some are illegal. If you make them lawful, you can collect from them. Cellphone masts don’t sit in the air. Municipalities own property – halls and so on. Yes, it is for the community benefit, but someone must pay for the soap that cleans the hall on Monday when everyone else has enjoyed the entertainment and left.”
“Streetlights must be subsidised. That money has to come from somewhere.
“Let us look at where we can find the money, so that it is never a toss-up between buying chlorine for the swimming pool and closing a pothole; cutting the grass at cemeteries or making sure streetlights are burning.
“Let’s make sure municipalities have sufficient revenue to carry out all these service delivery needs. Our practice is how we help municipalities have completeness of revenue.
“We deploy a whole lot of methodologies, tools that are tried and tested, which have got municipalities out of trouble. We now analyse for leakages, we now understand the value chain and the capabilities to deal with these.”
It is not all talk, Holeni assured. The City of Tshwane is its flagship client and it has been at Tshwane since 2015.
“They had problems across the board. We turned around the revenue from a deficit position to a surplus position. As a result, they have had ratings upgrades from Moody’s consistently that allow them to be active in the borrowing market. Funders now run after municipalities when they are sustainable.”
As an independent contractor on a fixed term five-year contract, he was at Ekurhuleni Metro before Ntiyiso. He was a project director for its revenue programme.
Ekurhuleni was “one of the first municipalities to break from the past and look at new ways to raise their revenues”.
It was Holeni who pointed it in the right direction. “We went after the big clients, like OR Tambo International Airport. They owed us a lot. Water meter readings had new runways built over them. There were meters we were not reading. It was a huge bill. They started negotiating.”
When do you get involved, before or after a municipality is placed under administration?
“We prefer from the beginning, when problems arise. Some of them we got involved in the middle of the crisis. But we turned things around. Our methodologies allow us to get involved at any stage but we’d prefer when you are still able to keep the lights on, and provide services. We’ve been called mostly when municipalities are in trouble, with salaries at risk, suppliers to be paid and so on..
“We focus on the revenue and often cost because the two are linked.”
Holeni made it sound so easy. Why the city fathers of failed municipalities cannot fathom the solutions he advances is a mystery.
“Municipalities are not run like businesses, mostly along charitable lines.”
He makes a point about how to deal with indigent residents not able to pay for services.
“Put them in a proper programme that is fully funded, then deal with the residential problem of those who do not pay, but can afford to.”
Ntiyiso Consulting leaves municipalities after 36 months with clear ideas of how to run their affairs.
Ntiyiso could design a model to collect from non-paying Soweto residents, Holeni said.
“Yes, we would. We have a customer awareness and education programme. Outside the hard facts of the technicalities, at the end of the day we deal with human beings. We need to get a buy-in from them.”
“We run it currently in Tshwane, and we can see an improvement. Residents need to know that they are funding the municipality’s budget through their payments.
“We go to the hearts and minds of our people. They should know that if we pay, we’ve paid for a good road, working street lights and all those things we need.”
Municipalities drain their income through acts of over-commitment, like buying a glass for R100 when they could get it for R5. Then they are locked into a contract.
Ntiyiso has a footprint in seven provinces, in old and new, big and small municipalities, from Knysna to Sekhukhune and “three metros”.
“We’ve never seen a municipality slide back that we’ve worked with. Some just take longer to stabilise.”