There is no financial crisis, says city’s head of treasury
THE CITY OF Joburg’s finances are sound. This is according to Seth Mukwevho, acting group head of treasury.
“The city is committed to continuous improvement of service delivery to residents and all our stakeholders. To this end, financial sustainability is key to municipal operations. The city would like to give investors and all other stakeholders assurance that there is no financial crisis and the municipality remains financially sustainable and able to meet all obligations as they fall due,” he said.
With reference to the billing issue, it is best understood within its context. Mayor Herman Mashaba said the billing regionalisation project, implemented in February 2017, resulted in some customers being billed twice in one month. The project was aimed at reducing the time between consumption and payment for services through the re-alignment of the billing portions by the geographic regions of the city.
In total, 41 208 customers were affected (out of 1 094 976), but all interest and penalties charged on those accounts have been reversed.
Of note is that no further penalties will be charged until the accounts have been normalised.
“Moreover, the city has instituted robust credit control management to ensure that the municipality recovers billed monies from all customers who are in arrears, and we are pleased to announce that great strides in collecting outstanding monies are being made,” he said.
The municipality’s redemption strategy is in place to make sure that borrowings to the tune of R2.733 billion will be redeemed in the 2017/18 financial year. The redemptions will be through the debt redemption fund, whose balance is more than R4.3bn, he said.
“Despite South Africa’s weak economy, the city’s credit rating was recently affirmed by Moodys at Aa1.za/P-1.za, which is an affirmation of the confidence in our ability to manage its finances. The city is an agile and responsive organisation and continues to experience strong revenue growth, underpinned by its status as South Africa’s business capital and main financial and economic centre. “Our financial management systems remain relevant to respond to dynamics of the economy,” concluded Mukwevho.
Municipality is financially sustainable