Joburg finances stable, posts almost R5bn surplus

2013-01-31 14:32

The City of Johannesburg posted a R4.95 billion net surplus for the 2011/12 financial year.

“We do believe that the city’s finances are stable,” said councillor Geoffrey Makhubo, member of the mayoral committee for finance, at a briefing ahead of the report’s tabling.

The surplus grew 18%, according to the report, which gave unqualified audits to most entities, except City Power and Johannesburg Water, which were often in the news over billing complaints.

Problems with meter reading, poor record keeping with waste bins and the need for tighter asset management, were highlighted as areas needing attention.

Only the Johannesburg Market and Joshco – which provides low cost housing services – received clean audits.

Turnover for the Johannesburg Market, one of the world’s biggest, was R2.8 billion, with 40 000 people visiting it on a busy day.

Unemployment in the city was 23.1% by the official definition. Combined with the global economic slowdown, and slowdown of GDP to 2.7% during 2012, this was having an impact on revenue collection.

“One of the challenges for the city has been billing and overall customer relationship management,” the report said.

53% of the city’s revenue comes from service charges and 16% from property rates.

“We are still unfortunately growing debtors and we need to reverse that,” city manager Trevor Fowler said during the presentation.

“Without paying for services and rates, the city will have difficulty in the future to enable service delivery and capital expenditure,” he said.

The city’s R35 billion income included R5.5 billion (up 12%) in property rates and R18.6 billion (up 22%) in services.

Eight percent of its income – R2.3 billion – was spent on contracted services.

Rental collections reached only 56.33% due to unemployment and unfavourable economic conditions, as well as tenants’ claims of indigent status, even though many had not registered for this.

Fowler said meter reading was the biggest problem with billing – checking very high or very low readings against historical readings.

Makhubo said: “The time of transition is over. Senior managers are in place and it is time to stand for accountability.”

During the 2012 calendar year, there were over 100 service delivery protests.

For the financial reporting period (June 2011 to June 2012) the City considered its service delivery achievements to be:

» The upgrading of more than 9km of water and sewer works in Fourways, Orange Farm and Alexandra; repairing more than 6000 water meters, maintaining 96% of public lighting, patching up 18 000 potholes, cleaning more than 100km of stormwater pipes and repairing and cleaning the Dube, Diepkloof and Meadowlands hostels;

» There were 43 clinics that provided antiretrovirals in 2011/12 compared with one in 2006;

» At least 750km of fibre optic cabling was laid for broadband services;

» 94% of informal settlements were serviced three times a week and there was 90% coverage for waste service provision, with backlogs mainly in informal settlements;

» There was 95% electricity and water services coverage and 96% public lighting, mainly in previously disadvantaged and so-called priority areas;

» Rea Vaya buses transported an average of 42 000 people per day, over the target of 40 000, and more than 150km of roads were resurfaced.

» The city said it created more than 32 000 jobs through the Extended Public Works Programme and provided training and support to more than 200 small, medium and micro enterprises.

The report would be discussed at the March council meeting.

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