n IMFO : Official Journal of the Institute of Municipal Finance Officers - The revenue conundrum - how debt restructuring can assist municipalities
|Article Title||The revenue conundrum - how debt restructuring can assist municipalities|
|© Publisher:||Institute of Municipal Finance Officers (IMFO)|
|Journal||IMFO : Official Journal of the Institute of Municipal Finance Officers|
|Publication Date||Autumn 2015|
Let's be frank: the core function of municipalities is not the collecting of outstanding money, it is not their speciality - period. Once you accept that as the reality, it opens up what we like to call the Revenue Conundrum, and poses a series of pressing questions. What happens then when a municipality's revenue is crippled by non-payment for services rendered? Does the municipality assume the dual role of being a service provider and debt collector? Will the political DNA of the municipality allow for it? Taking into account our stance on reality, the answer can only be: of course not. And as a result this leaves the municipality with a very big problem: a debt book that is increasing daily and no actionable recourse in stemming the tide.
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