BCM turns down Bhisho’s offer of help

Just get government departments to pay up, city says

Buffalo City Metro has turned down Bhisho’s offer to help improve its revenue and debt collection rates with authorities saying the provincial government should rather help in getting departments to pay the combined R76.7m it is owed in services.

This is despite such a plunge in the city’s cash reserves that it may be unable to pay February salaries.

But the provincial co-operative governance & traditional affairs (Cogta) portfolio wants to approach court to compel the metro to accept Bhisho’s extended helping hand, saying its failure to meet revenue collection targets “could lead to the municipality adopting an unfunded budget”.

The Daily Dispatch reported in November that BCM’s budget preparation report revealed the city’s cash reserves had shrunk from more than R2bn in 2015 to R935m this year.

Cogta MEC Xolile Nqatha told the Dispatch he would write to the metro and four other municipalities who have fallen short on revenue collection, this week.

BCM achieved a revenue collection of 88% in the last financial year considerably short of the minimum required 92.5%.

Tabling his portfolio committee report on Cogta last week, Cogta chair Thabo Matiwane recommended that Mnquma, Elundini, Mbizana and Umzimvubu municipalities also be subjected to the same legal process. One of the recommendations in the 2018/19 committee report was that the department develop a revenue enhancement strategy “that will lead the municipalities on a financial recovery path”.

No details were given on what the proposed strategy would entail.

Mnquma municipal spokesperson Loyiso Mpalantshane said: “Respectfully, we distance ourselves from such a [portfolio committee] report. Together with officials from national and provincial treasury we’ve developed a revenue enhancement strategy, and that’s what we are implementing currently.”

Cogta’s planned intervention in BCM comes shortly after the provincial cabinet approved Nqatha’s plans to place the Nelson Mandela Bay Metro under administration, with Cogta officials expected to be deployed to the Port Elizabeth-based council early in 2020.

While the proposed Cogta intervention in BCM does not mean the city would be under Bhisho administration with its day-to-day affairs, MPLs agreed that the metro needed assistance.

But BCM spokesperson Samkelo Ngwenya, said they were co-operating with Cogta and that a legal process “would be extreme”.

Ngwenya said the metro was already working with national treasury and that any intervention by Cogta would have to be a part of the intervention by Pretoria.

The spokesperson said Cogta’s first intervention should be to get the government spheres who owe the metro millions of rand to pay their bills, as their heel-dragging had caused the city to fall short of its financial targets.

In his financial performance report for the quarter ending on September 30, mayor Xola Pakati said they were owed R76.7m by other spheres of government for services rendered.

This was R15.8m less than the month before. While the figures are likely to be different as Pakati is yet to submit his latest report in council, he said the breakdown at the end of September was:

Ngwenya said: “This increase in outstanding debtors is a direct correlation to the decline in collection rate, 88% in 2018/19.

“It is also a reflection of monies owed by other government spheres, and this is something that another sphere of government like Cogta can unlock for us.”

Ngwenya said they had a plan in place to improve their finances.

“Our solutions depend on us being able to optimise use of investment properties, introduce new revenue streams, centralisation and automation of cash collection points,” Ngwenya said, but could not say how this would be done.

BCM achieved a revenue collection of 88% in the last financial year — short of the minimum required 92.5%