Chinhoyi seeks Govt authority to borrow $2m

CHINHOYI Municipality has applied to Government for the authority to borrow $2 million which will go towards retrenchment of excess staff.

This is part of the staff rationalisation programme aimed at streamlining the municipality’s operations and reduce the salary bill. Chinhoyi has 372 workers chewing about $380 000 every month against revenue of around $340 000.

This has resulted in salary arrears of $2,4 million.

Speaking at a Chinhoyi Municipality budget consultation breakfast meeting yesterday, chamber secretary Mr Abel Gotora said negotiations with the workers were at an advanced stage.

“An agreement has been secured between council and the workers,” he said. “We are waiting for approval from the Ministry of Local Government, Public Works and National Housing.

“We have met the requirements of the Labour Relations Act and we are hoping to secure $2 million.”

Mr Gotora said the borrowed money would be repaid by savings from the retrenched workers.

Chinhoyi wants to retrench at least 120 workers to cut on employment costs so that it complies with Government’s 70-30 ratio for service delivery and employment costs.

In his presentation, finance director Mr Zephania Chirarwe said retrenchment was one of many strategies council was implementing.

He said the disparity between revenue and employment costs needed to be addressed urgently.

“It is not sustainable for the local authority,” he said.

“We cannot afford to channel all collections to employment costs at the expense of service delivery.”

Mr Chirarwe said retrenchment, employment freeze and salary reduction were some of the key strategies being implemented to turnaround the municipality.

This comes as council owes creditors over $16 million, a situation Mr Chirarwe said exposed council to litigation due to its inability to pay on time.

Conversely, he said, the debtors were mounting, further incapacitating council to pay off what it owed.

Council is owed $36 million, with people who purchased stands in various housing development projects owing around $16 million.

Only $600 000 has been collected so far against a target of over $3 million in this year’s budget.