Management at the City of Mbombela will have to be content with just water, tea and coffee at meetings, after the municipality’s new manager, Neil Diamond, put a stop to meals being served at the gatherings as part of drastic cost-cutting measures meant to improve the finances of the cash-strapped municipality.The city has been struggling to service its huge Eskom debt, and pay service providers as well as workers and councillors on time. Diamond, who took up the job on July 1, is acting in the position for 18 months.Two months ago, the municipality served 77 employees with letters of intent to suspend them for incurring R755m in irregular expenditure over the past two financial years. As a result, its previous municipal manager, Noko Seanego, and chief financial officer, Oupa Mokoena, suddenly resigned.When the 77 employees were served with the letters, it emerged that contractors had been paid for installing streets lights and replacing 500 prepaid meters but that the work had not been done. One contractor was paid for drilling 300 boreholes but none was found.“Mbombela faces serious financial challenges but it is not unique … 263 municipalities in the country are facing the same challenges. "We have to start at management. No meals will be served at management meetings … only water, tea and coffee,” Diamond said.He cited as one of the reasons behind the decision the inflation of prices by suppliers, some of whom he said increased their prices by up to 75% when selling to the municipality. “We have to deal with that,” he said.“We can only fix the financial instability in two ways – cutting expenditure without necessarily affecting service delivery and enhancing revenue collection,” he said.In order to turn things around, Diamond said that he had:- Reduced the Eskom debt from R180m to just R95m, which is the municipality’s monthly bill;- Intervened in the supply chain management unit to reduce irregular expenditure with a special focus on wasteful expenditure; - Implemented a revenue enhancement and protection strategy; - Cancelled certain contracts and renegotiated others; - Ring-fenced various budgets; and- Paid all service providers owed a maximum of R29 000 with more payments scheduled.He said another critical area for revenue enhancement was collecting payments from third parties that were using the city’s commercial and residential properties and adjusting the property valuation roll.“There are properties worth R3.5m but they appear in the city’s books as being worth R900 000. The valuation roll needs to be adjusted.“We will also improve our billing systems so that our clients can receive their statements electronically, and use our advertising space to collect more revenue,” said Diamond.Mpumalanga cooperative governance and traditional affairs MEC Refilwe Mtshweni seconded Diamond to the position after he had been acknowledged for his 16 years’ experience in municipal finance and having served in various capacities in the City of Ekurhuleni’s finance committees as an ANC councillor. Several candidates applied for the position following Seanego’s resignation.