Debt, wages eat reserves
The cash-strapped municipality wasn’t the only one in the red this week. EFF PR councillors Mzwandile Qotoyi and Nomakhwezi Mtwa attended Wednesday’s Special Council Meeting at Makana Municipality in the party’s trademark red overalls.
Yandiswa Vara, speaking from her position as Council Speaker, was disapproving of the councillors’ dress.
“I’m a bit disturbed because it brings back memories of things I saw on TV,” she said.
She was referring to the State of the Nation address on 9 February during which EFF members in red were forcibly removed from Parliament. But she couldn’t do a Baleka Mbete, because there is no rule saying you can’t wear overalls in Council.
Or red. Which, incidentally, Vara herself was wearing.
Wednesday’s Special Council Meeting was to pass the adjustment budget and appoint a new acting director for corporate and shared services.
However, the meeting included a closed discussion on an urgent confidential report, the subject of whcih was later confirmed to be former councillor Paul Notyawa’s new legal challenge ove the post of Municipal Manager.
It also saw the announcement by the Mayor that Makana’s entire EPWP allocation would be deployed to cleaning Grahamstown, and keeping it clean.
A useful feature in Council agendas over the past few months has been the inclusion of an explanation of the processes that are being dealt with in that meeting, along with a summary of the legislation.
According to this explanation, the Adjustment Budget “reaffirms the Municipality’s commitment to achieve the service delivery targets and performance indicators as reflected in the approved service delivery and budget implementation plan, considering the financial constraints currently being experienced”.
In her introduction, the Mayor Nomhle Gaga highlighted the fact that in the first six months of the year, the municipality has collected 82% of its revenue budget.
At the same time, less than 50% of the capital expenditure budget had been utilised, which was compromising service delivery.
Gaga mentioned the Grahamstown Business Forumdriven strategic planning meeting last Thursday and said there would be a follow up on 15 and 16 March for the whole municipality. One of the commitments was to deploy all those employed through the Extended Public Works Programme (EPWP) to cleaning.
According to Council documents, the adjustment budget was necessary because of: • A shortfall in projected revenue collection (incorrect meter readings, water and electricity losses and high non-payment rates because of unemployment were listed among the reasons) • The need to service longstanding debts, interest on which amounted to R4 million • Underexpenditure on capital projects because of adjustments on the Division of Revenue Bill (which determines government grant allocations). • The service delivery backlog. Items where expenditure had been cut included catering; events, advertising and sponsorships, office furnishing; purchasing of newspapers and other publications for employees, travel and subsistence and legal costs.
Overtime had been reined in, according to Council documents, with planned overtime submitted to management for consideration on a monthly basis.A notable change in the adjustment budget was the reduction of electricity income by R33 million - “for the purpose of aligning our tariffs with Nersa and also due to the implementation of time of use tariff”.
The total operating expenditure was adjusted downwards by R63.9m compared to the approved budget.
While wages and salaries swelled by R20 637, general expenditure was reduced downwards, particularly with electricity bulk purchases.