City of Joburg explains why service deposits were added to bills – and why residents are being disconnected

The City of Johannesburg (CoJ) created frustration among residents when it added or adjusted service deposit charges in June.

Residents complained that the service deposit was added six days after the statements for June were released, immediately placing residents’ accounts in the red.

The City then began disconnecting the services of property owners whose accounts were in arrears, many of whom were unable to immediately pay the large sums suddenly added to their bills.   

Service deposits mirror rental deposits

The CoJ began formulating their Credit Control and Debt Management Policy in the 2021, which was approved in August 2022.

This gave the CoJ increased powers to ensure ratepayers meet their obligations, which could be evaluated at the CoJ’s discretion. Included in the evaluation is the deposit paid by residents.

“The policy allows the city to periodically review the adequacy of the security deposit paid by the customer to ensure that it remains above or equivalent to two months’ average consumption,” MMC for Finance Dada Morero told The Citizen.

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A residents’ debt to the CoJ begins when they open a new services account, and the deposit – the equivalent of two months’ average consumption – forms part of the first invoice.

“The deposit is an amount paid by the customer, to be withheld by the city from the opening of an account until termination, and will be refunded on termination provided the customer does not owe the city on other accounts,” explained the MMC.

No adequate communication

Residents have complained to their councillors, claiming the city did not inform them of the sudden adjustment of their accounts.

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Morero denied this.

“We would also like to advise that the city communicated with all affected parties about the inadequacy of the security deposit after the review exercise was completed,” he said.

“Furthermore, the city has subsequently disconnected services for those who did not respond to the request to pay the adjusted deposit, in accordance with the policy.”

Residents who have received a final demand letter from the CoJ have been asked to make a payment arrangement with the city or face disconnection within 14 days.

Exemptions for some customers

In a letter to Morero’s office, DA shadow MMC Chris Santana pleaded with the city to allow residents to pay the amounts off over time.

Santana explained that residents had tried to make payment arrangements, but were prevented from doing so because of the financial year-end roll over and the CoJ systems being offline.

The city confirmed Santana’s request for certain exemptions, stating pensioners, extended social package beneficiaries and properties valued under R500 000 would be exempt from service deposits.

“Against this background, [the CoJ] has acted within the guidelines of the council’s approved policy when raising such security deposits and disconnecting services to the affected customers,” Morero said.