Gweru City Council faces another power disconnection by the Zimbabwe Electricity Transmission and Distribution Company (a subsidiary of the Zimbabwe Electricity Supply Authority) over a debt of over ZWL$260m.
The council was earlier this year in January cut off by the electricity provider after failing to settle a monthly installment.
About six months later, the local authority is facing another disconnection as it continues to struggle to clear the debt it owes to the power utility to keep the lights on.
Speaking during a 98.4FM current affairs show, Livingstone Churu, the Gweru City Council`s Director of Finance, said the local authority on Monday this week received a notice from the ZETDC stating the power utility`s intention to cut the power supply.
“Like today I did not have a good day in office after I received a notice of electricity disconnection and I was really troubled. It means if our electricity is disconnected, we can no longer pump water, we cannot collect revenue, so we were pleading with ZESA not to switch us off and I think they understood us because they were bound to disconnect us today (Monday) at 10 a.m.” Churu said.
When the city council was switched off in January, the development plunged the city into a water crisis as the city council could not pump water to users.
Defending the local authority`s move to rebase its budget to the United States dollar, Churu said the city council was faced with a financial situation where it was about to “grind to a halt” providing services to residents, as it was struggling to raise enough revenue.
“In a way, by rebasing our budget we are actually trying to cushion the ratepayers because we know it`s very difficult but we do not have a choice because we were reaching a point we were about to grind to a halt,” he said.
He added: “When we are billing, our average monthly bill is at ZW$279.68m but you will see that when we spend, like the unavoidable costs we have such as electricity, water chemicals, fuel, salaries and loan repayments, like today when I was doing rough calculations of how much we need for monthly expenditure, the amount came up to ZW$436.20m against a billing of ZW$279m. It means as a city, financial experts would tell you that we are bankrupt we cannot operate, hence we decided to rebase (the budget).”
Churu said by rebasing the budget, the council was reverting to its USD value when it was submitted to the Local Government Minister for approval on November 15, 2021, so that when the local authority bills ratepayers they pay at the “prevailing” interbank market exchange rate.
“How we will do it is that we will not be at the equal terms with the market because you will see that when you go to the market where we buy from, the (exchange) rate we can use, suppose we bill someone today, would be US$1 : ZW$443.76 but where we procure goods they would be using a much higher rate.
“The issue of rebasing is that we have retained our budget`s value, we have not changed the budget approved by the Minister (Local Government) but have just reverted to its US dollar term value as at 15 November 2021. But, when we then bill residents on a monthly basis, on the day that we bill we will use the prevailing interbank rate, except that our rate will run for the whole month until the next billing exercise.
This is different from if we were billing residents in the US dollar, where it would mean when they come to pay, we then apply the rate (exchange), but in this case our rate applies for the whole month,” Churu said.
Gweru City Council this month announced that it would be rebasing its budget with effect from July 1, 2022.
According to Churu, the rebasing of the budget would not affect the debt ratepayers had accumulated before July, 1 when the city council said the process would be coming into effect.
“Our issue of rebasing will focus on the billing from 1 July going forward otherwise before then we will not effect anything because if we had done so then we would be appearing heartless. What I am happy for is that you understand that it had to be done.”
But, Gweru United Progressive Ratepayers Development Association Trust Executive Director David Chikore said whilst rebasing the budget was inevitable, the council should have consulted the residents before effecting it.
“The problem we have with this rebasing is while we are not opposed to it, we feel there was a need for us to be engaged. The problem is we are only being told that it is being implemented yet our concerns were not taken on board.”
Chikore said some residents were afraid that they could lose their property if they defaulted on their bills and the local authority effected execution against property.
Gweru City Council earlier this year unleashed debt collectors on defaulting ratepayers and some lost their property after it was attached.
“There are people who are already struggling to meet their obligations because they have no incomes and are very poor so it would have been prudent that you consulted us before so that we reach a common ground. Within our communities, we have child-headed incomes, pensioners who are struggling, the unemployed, I mean people who are so disadvantaged to the point that if you ask them to pay more they inevitably will sink into more debt,” Chikore said.
Chikore proposed that the city council have a differentiated system of rebasing that recognised the most socio-economically vulnerable community members to cushion them from the changes.
However, Mr. Churu said the city council had considered the different economic capacities of ratepayers, where the charges would vary according to the residential property values.
“In a way I cannot say it is a blanket approach because as you see that we maintained our categories of high density, we have low density and middle density such that if I give you examples, in some instances some water charges would reach US$1.25 after a household consumed 1 to 5 cubic metres of water, meaning that it is not a blanket approach.”