Msunduzi expects R600 mln shortfall

2010-04-29 00:00

THE overtime bill at the Msunduzi Municipality has been reduced significantly, but council is still facing a major battle in terms of the municipality’s projected financial shortfall.

According to Msunduzi administrator Johann Mettler, the municipality is looking at a shortfall of about R600 million by the end of the financial year, which ends in June.

Of this, about R400 million is owed to creditors.

“The shortfall will bite us: it’s inevitable. We have to make up that money and the new budget must make the necessary provisions,” he said.

Mettler said his administration had just managed to pay salaries this month, but warned that there will come a time where it will face tough choices about whom to pay salaries and on what basis.

“It’s a very serious situation [and] the money must come from somewhere.”

Mettler said the municipality needs between R100 million and R120 million a month to cover all its expenses.

Some of the major expenses are the R40 million a month due to Eskom and the overall salaries bill of about R30 million a month.

The municipality also has to pay millions of rands to settle loans and cover the costs of fuel, telephones, and water and other running expenses.

“We are still sitting with uncollected debt of R500 million and what is worrying is that credit control and debt collection still hover at about 50%. This is a big problem,” Mettler said.

The good news is that the municipality has managed to clamp down on overtime spending, which was allowed to spiral out of control for the past few years.

When Mettler and his team arrived to take over the municipality’s administrative functions in March, monthly overtime — for which only R2,5 million had been budgeted — stood at almost R5 million.

Mettler then stepped in and managed to reduce April’s overtime budget to roughly R1,9 million.

He said he put certain measures in place, even going as far as threatening some employees, and the result was a sharp drop in expenditure.

This has led to some workers failiong to attend to emergencies and then using Mettler’s crackdown on overtime as an excuse.

However, the administrator said he has made it very clear that emergency cases can be attended to if they are justified.

“Those staff that are using this as an excuse are actively sabotaging the affairs of the municipality,” said Mettler.

He has also acted on the flawed property valuation roll that has resulted in poor valuation of properties and said he has contacted the service provider who has agreed to re-value certain areas.

“We have given them until next week as poor valuations impact on council revenue,” said Mettler.

He said his provincial task team will still be busy with a number of forensic investigations and that the province has given him additional assistance by adding more experts to his support team.

Mettler said he is dealing with “an extremely abnormal situation, which does not call for normal answers. There are steps that one has to take in order to remedy the situation.”

Msunduzi Mayor Mike Tarr said a forum has been established that will allow Msunduzi heads to meet union leaders once a week to thrash out any issues that workers feel need to be addressed.

 

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.