- City of Johannesburg Mayor Mpho Phalatse is confident she won't be axed this week.
- She is also confident the council will finally approve a R2-billion DBSA loan to the City on Wednesday.
- The mayor and her finance MMC addressed the media ahead of an ordinary sitting of the council.
City of Johannesburg Mayor Mpho Phalatse is confident she will defeat the motion of no confidence in her as she faces another attempt to remove her from her post.
Phalatse spoke on Wednesday morning, shortly before the council was due to start its two-day ordinary sitting.
Phalatse and Julie Suddaby, the City's mayoral committee member for finance, briefed the media about the metro's finances.
On the council's agenda for the sitting are two items for voting – the motion of no confidence in the mayor, and the DA-led multiparty government's application to approve a short-term loan.
"My focus is not even on the motions. Each council meeting may vote against me, and it's something [we will address] … in Parliament. If a motion of no confidence is defeated, you may not bring another for six months.
"This is not a farewell speech. It is a momentous occasion. It was on this day a year ago when I took... office."
The mayor said she was confident the council would approve the R2-billion Development Bank of Southern Africa (DBSA) loan application.
Impact of Covid-19
Phalatse said although Covid-19 was under control globally, the pandemic's impact was still being felt and that it had an effect on the City's ability to collect revenue.
"The Auditor-General found that many South African municipalities faced financial difficulties, and irregular expenditure had reached an untenable level. The struggle to attract loan funding was not isolated to the City of Johannesburg. We are affected by other municipalities' poor performance as investors tend to see all governments as a single entity," she said.
Despite this, the City secured R1.5 billion of the R3 billion included in the 2021-'22 budget framework to ensure service delivery continued.
"Despite the claims doing the rounds in the past few weeks, the City is in a position to honour its DBSA loan repayments. As it stands today, the City's Sinking Fund – the fund set aside to repay loans or bonds – is adequately funded for the next three years."
The mayor said, for the sake of the City and its residents, the DA-led coalition would again request the council to approve the report that would secure a short-term loan. This loan will be repaid by the end of June 2023.
She said taking out a short-term loan was standard business practice, as was the case during the budgeting processes of the City during 2015-'16, 2016-'17 and 2018-'19 financial years.
"Therefore, the disinformation by a corrupt cabal that short-term loans are unacceptable and that it somehow 'proves' that the City is broke is unjustified and a political power play at best," Phalatse added.
The City has three sources of funding: revenue collection, grants and loans.
"This is not unique to Joburg. The City predominantly funds service delivery and building projects with revenue collected from water and electricity consumed, property rates, fines and other services.
"It is essential to note that the City did not meet its collection targets in the last three years. The decrease in revenue collection can be attributed to the economic effects of Covid-19, the massive increases in food and fuel prices due to, among others, the war in Ukraine and the sudden increase in interest rates and inflation since June 2022, creating downward pressure on the revenue collection efforts," she said.
In July, the City collected R3.6 billion, 76% of the revenue collection target.
It set up a revenue collection war room with a task team to increase collections as quickly as possible, including an enhanced revenue collection campaign under Operation Buya Mthetho.
"As a direct result of these efforts, the revenue collection for August and September jumped to R4.5 billion and R4.2 billion, respectively – raising our revenue collection to 93% of the total targeted collection. In October, revenue collection fell to 86%, translating into over half a billion rand of undercollection."
Phalatse then paused and said: "We all remember what happened in October."
She was inferring that during Dada Morero's 25-day tenure as mayor, revenue collection had dropped.
Phalatse was reinstated by the courts last month. She said finance would tally the revenue collection for this month after month-end.
"It is evident, then, that the City is still recovering from a tough economic time. Our residents are recovering from a tough economic time. At this point, the City seeks to secure a loan over the shortest term possible to ease the cash flow mismatch currently being experienced. We have secured access to R2 billion – we need the council to approve the application.
"It must be noted that, although illegally installed, the government led by Dada Morero also recognised the possibility of a cash flow mismatch that could affect the City. So much so that Morero and his cabal were ready to table the same report before council, which was signed by the then-illegal MMC for finance, councillor Margaret Arnolds.
"Meaning that those tabling a motion of no confidence against the multiparty government are willing to deliberately collapse the City for a narrow political end, despite us all agreeing that this loan is necessary. What our political opponents are doing can best be characterised as 'opposition for the sake of opposition'."
She said the multiparty government was confident that it had garnered enough support to table the loan.