- Tshwane Mayor Randall Williams has announced his plans to fix the city's financial health.
- In the last financial year, revenue collection in the City of Tshwane dropped to less than 75%.
- This was blamed on Covid-19 and the lockdown regulations.
Revenue collection in the City of Tshwane dropped to less than 75% towards the end of the last financial year due to the impact of the Covid-19 pandemic and subsequent lockdown measures.
This according to Tshwane Mayor Randall Williams who delivered his state of the city address on Thursday.
He said the restoration of the City's financial health remained a top priority but the enforcement of the lockdown measures had significantly had worsened the situation.
"The impact of these measures was immediately felt by the City with a significant drop in revenue," Williams added.
"In the last financial year, the budget estimation for the collection rate was 95%. With the Covid-19 impact, it dropped to less than 75% towards the end of the 2019/20 financial year.
"Following the reinstatement of council at the end of October 2020, we immediately began to interrogate the reasons for the poor financial performance in the 2019/20 financial year, which resulted in a deficit on the operating account of over R4 billion."
Tshwane was run by a team of administrators, which ran the City until October 2020 after it was placed under administration in March 2020.
A successful court challenge by the DA saw the reinstatement of the council.
Williams said the financial position meant the City had less than a month's cash to cover its commitments.
"The mere fact that the City could continue to honour its commitments to employees and creditors, such as Eskom and Rand Water, can directly be attributed to the concerted efforts of this government to improve the financial health of the City since 2016.
"Now, we have to do it all again after inheriting a R4 billion deficit."
He added the long-term Financial Sustainability Plan, adopted by the council during 2018, had been critically reviewed to refocus on short-term interventions to ensure a return to financial health as quickly as possible.Matters to be reviewed include:
- Reduce non-essential expenditure
- Enhance revenue and debt collection
- Implement virtual community outreach programmes to assist residents with their accounts, as well as affordability arrangements to address arrears debt and the registration of qualifying indigents
- Improve the internal control environment
- Ensure consequence management through the Financial Disciplinary Board
- Review contracts
At an operational level, Williams said critical interventions focusing on revenue enhancement have already been implemented to address the poor meter reading performance, the backlog in finalising clearance certificates and the collection of arrears debt.
"The collection rate for debtors has already improved to just over 88%, and every effort is being made to again reach the target of 95%.
"These interventions, with a critical review of current expenditure, will pave the way for the City's return to financial health and sustainability, and will slowly begin to rebuild the trust between the City and Tshwane residents."