City continues to rake in millions in water revenue
THE City is continuing its steady trend of over-recovering on water revenue raking in a staggering R912 million more while sanitation charges topped more than R200 million in December last year.
The City’s chief financial officer Kevin Jacoby must, according to law, compile a monthly report on the financial status of the City.
Jacoby said the over-recovery is due to some consumers still using water above restriction levels.
“This was specifically applicable during the level 6 tariff stage implemented to discourage high consumption in order to keep saving water. It must, however, be emphasised that the over-recovery on sales is not all cash backed. High consumption by non-paying consumers will mean that the over-recovery on “billed revenue” will be offset by the over expenditure as would be reflected by the provision for the non-cash backed portion of the amount billed,” he said.
The introduction of Level 5 restrictions, Jacoby says, has slowed down the over-recovery of “billed revenue” reflecting a closer alignment to the City’s monthly budget.
“This also means that the cumulative effect of over-recovery has stabilised. This stabilising effect is expected to continue under the Level 3 restriction levels and depending on the usage levels (and impact of seasonal usage) the anticipated cash backed portion of the current over-recovery can be used as a buffer potential under-recovery later in the financial year,” he said.
The City has also over recovered on the fines, penalties and forfeits raking in an over-recovery of R162.2 million.
“The over-recovery is a combination of over and under-recovery on traffic fines (under), due to a number of reasons which include public’s ability to pay fines, capacity of courts to deal with case volumes, outcome of court cases, and traffic fines accruals (over), due to more fines being issued than planned,” Jacoby said.
Service charges for electricity revenue is R291.1 million over.
On employee related costs, R775.8 million under expenditure was recorded.
“The variance is mainly due to the turnaround time in filling vacancies; internal filling of vacant positions; and appointment of seasonal workers and temporary staff, which is dependent on seasonal requirements as and when departments require additional staff.
“Bulk purchases (R103.9 million under),” Jacoby said.
At December 31, the City had 3 502 vacancies; 1 475 positions were filled (721 internal and 754 external) with 722 terminations processed from July 1, 2018.
Stop COCT founder Sandra Dickson said the financial report has consistently shown over recovering on all utility items.
“I don’t know when and how all these over-recoveries will stop. I think it’s too late for the City to fix this tariffs mess. Tariffs should never have been connected to the consumption levels.”