More East Londoners not paying rates

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Rates and services collection in Buffalo City Metro plunged to 71.2% in September.

Sluggish expenditure in a number of vital areas of BCM budgets were recorded in this latter part of the year, according to a 2018-19 report by acting chief financial officer Siyabulela Peter.

The report was presented to the metro’s finance portfolio committee on Wednesday.

Peter noted that the drop in collection was compared to the 84.06% rate of payment of rates and services which filled BCM’s coffers in September 2017.

This is a startling 12.9 percentage point drop, made worse by the overall 93.32% collection rate for the last financial year ending in June, news of which garnered mayor Xola Pakati rapturous applause from fellow councillors.

The new financial year started in July.

Peter listed the cause of the income plunge as:

● Unresolved objections to BCM’s new valuation of properties;

● Tampering with electricity meters; and

● Non-payment even after electricity has been disconnected.

Peter wrote: “The collection ratio for September 2018 has reduced due to the fact that the municipality has implemented new general valuation this year which has increased the actual billing, of which some of the properties are still under the objections that are yet to be finalised. Factors that contribute to collection rate are tampered meters and non-payment after disconnection.”

In a further worrying trend, the report shows BCM has only spent 7% of its adjusted capital budget of R1.99bn.

In the previous financial year, 8% of the adjusted budget of R1.71bn was spent, Peter said.

The operating projects budgets showed a small decline in expenditure.

“The metro has spent 8% of its 2018-19 adjusted operating projects budget of R333.73m as at September 30.”

Peter said in the previous financial year, 9% of the adjusted operating projects budget (of R300.91m) was spent.

He said BCM had spent 11% of its 2018-19 urban settlement development grant budget of R762.99m by September 30.

In the previous financial year, 14% of this budget of R768.13m was spent.