Joburg city council averts being placed under administration in the nick of time
The Johannesburg city council has passed a R68.1bn budget, preventing SA’s richest city from being placed under administration a day before the deadline was set to lapse.
The clock was ticking for the city, which faced having an administrator appointed to run the metro until a new council was elected if it did not pass the budget, after having failed to do so before its new financial year.
July 1 was the day the new financial year started and the city failed to pass a budget after a council meeting was postponed to allow for further political consultation.
The provincial government gave the city until Friday to rectify the matter. The finance MEC in Gauteng had to approve its expenditure in the meantime, as the city could not spend any money without a budget.
The consultations, which took place over the past month, finally bore fruit on Thursday, when all political parties in the council, with the exception of the EFF, reached across the aisle to pass the budget.
The council is governed by a minority coalition led by the ANC. The DA, the second-largest party in the council, is on the opposition benches and supported the budget after a week of intense consultation.
Finance member of the mayoral committee Jolidee Matongo, tabled a dramatically different budget from that proposed in March. It includes slashing the capital expenditure allocation by close to R1bn from the proposed budget to the final, agreed budget’s R7.5bn for the 2020/2021 financial year — which is even lower than the R7.8bn in the 2019/2020 budget.
“It is clear that the Covid-19 pandemic has turned the global economy upside down, and the City of Johannesburg has not been an exception,” Matongo said, adding that the ripple effects of the lockdown and the consequent economic meltdown were already evident in the decline of the city’s revenue collection since April.
“The tariff-setting process, which was presented through a public participation engagement, took into consideration the likely impact the initially proposed tariff increases had on the local economy, businesses and residents,” Matongo said. The city accordingly revised the hikes proposed in the draft budget downwards.
The property rates rise is to be reduced from the proposed 4.9% to 4%; the water tariff increase will drop from 8.6% to 6.6%; and the electricity tariff hike goes down from 8.10% to 6.23%, Matongo announced.
After public concern and suggestions by residents on the proposed tariffs, he added, the city had taken a decision to withdraw the proposed fixed charges of R200 for residential and R400 for commercial prepaid electricity.
On salary increases, the city has budgeted for a 6.25% increase for municipal workers, but this is subject to negotiations between the unions and the SA Local Government Association Bargaining Council.
Matongo said political parties still have to discuss the proposal by the DA that councillors get no salary increases in this financial year. If all parties agree, he would table an adjustment budget to that effect, Matongo told Business Day after the meeting.
Currently, the city has budgeted for a 4% salary increase for councillors.
Leah Knott, DA caucus leader in Johannesburg, said several far-reaching interventions proposed by the party were included in the final budget after “extensive” negotiations. These ensured that residents will not bear the brunt of the Covid-19 fallout, while placing an emphasis on economic upliftment.
“There is simply no time to waste on politicking and mudslinging now. The DA’s priority is to get relief to our residents and to urgently bolster our healthcare response,” Knott said.
Another major concern for the city, aside from being placed under administration if it did not pass the budget, was potential interruptions to service delivery, she said. “At a time when hygiene is a matter of life and death we cannot afford interruptions in water and sanitation services. In a time when businesses are fighting to weather the economic storm, we cannot afford power outages.”