Idealistic expectations for collection rate adds to fears about cash flow….
Still reeling from rigid and even draconian Covid-19 regulations that crippled the local economy, Matjhabeng residents now face stiff rates and taxes increases if the proposed 2022-’23 budget is approved.
“This clearly indicates that if the ruling party is at fault or if the budget is grossly unrealistic, the ruling party will not listen to any advice or warnings from anyone,” says Maxie Badenhorst, chief whip of the DA.
The proposed budget for 2022-’23 suggests an increase of 11,75% on water, 6% on electricity (this most probably will become 8,61% after the finalisation of the court case between Eskom and the National Energy Regulator of South Africa) and 8% on both sewerage and refuse removal (a non-existant service).
The municipality bases this budget on an estimated 80% collection rate.
“We warned council that even if a very optimistic collection rate of 65% is reached during the 2022-’23 financial year, the municipality will again face a loss in income of approximately R500 million. But if they budget on a more realistic 70% collection rate, the budget will be unfunded by only about R100 million. This will be much easier to address in an adjustment budget in February 2023,” Badenhorst says.
To confuse matters even more, the ANC pushed through adjustment without affording the opposition the opportunity to vote on it.
The major stumbling block here is the R100 million lost in December 2021 when National Treasury withheld the Equitable Share due to bad governance.
Thanduxolo Khalipha, new executive mayor, undertook to negotiate the release of these funds, but by March only R75 million had reached the coffers of Matjhabeng, which resulted in the adjustment budget having to be adjusted downwards.
“The DA accepted this, but on condition that a revised adjustment budget must come back to council for final approval before the end of April.
“They will have to consider the R1,1 billion loss in income due to the low collection rate. They have not considered that the current collection rate is between 52% to 56% against a budgeted collection rate of 75% for the 2021-’22 financial year.
“The indications are that they will not be able to achieve a 75% collection rate by the end of June. They are already experiencing cash flow problems.
“Officials are complaining about not having equipment and tools to do their work, while residents are buying their own taps to fix leaks on properties – they buy their own bulbs and pay service providers to do repairs.
“Residents pay additional amounts to private companies to remove their refuse, and this is going to become worse each month as the cash flow situation worsens, yet the ruling party is not willing to make any attempt to save it from total ruin.”
