The Ekurhuleni multi-party coalition government passed its adjustment budget of the City for the 2021/2022 financial year during a council meeting on February 25.
According to the mayor’s spokesperson, Phakamile Mbengashe, the adjustment budget will reroute the city on a path back to basics to ensure quality service delivery to the residents of Ekurhuleni.
“The current government inherited a city with massive service delivery backlogs, a poor financial state and an investment rating downgrade by Moody’s in November last year.
“As a result, our cash on hand of 25 days as of June 30, 2021, deteriorated to 14 days at the end of September 2021. However, by the end of December 2021, we could recover to 21 days cash on hand, still woefully short of the National Treasury requirement of 30 days,” explained Mbengashe.
“Due to our precarious financial situation and Moody’s downgrade, borrowings to the city now come at a high cost. As a result, we have had to reduce our proposed borrowings by R500-million, resulting in a similar cut to capital expenditure.
“The capital expenditure remaining will focus on critical service delivery, revenue generation projects already in progress and the utilisation of national and provincial grants. Previously, grants that were not spent would be surrendered, which we can no longer afford to do.”
The metro announced that collections are around 84% compared to 90% budgeted, and the City intends to engage in aggressive credit control strategies to improve collections, on which further details will soon be announced.
Additional allocations have been made in the following critical areas:
• An additional R117-m has been allocated to promote the security of energy supply – a further R40-m for maintenance and R77-m for new infrastructure
• In economic development, we have received a grant of R58-m, which will fund job opportunities in the city
• For human settlement, there are allocations of R7-m and R10-m to deal with repairs and maintenance of Kwa-Thema and Wadeville hostels, respectively
• An additional R11-m to deal with sinkholes to address risks for affected residents
• An additional R2-m to supplement the payment to the SPCA for operating the city’s pound services, which are insufficient to compensate them for the costs involved fully, and we thank them for their continued support despite the City not providing the necessary funding.
“We will look more closely at the funding needs for the SPCA in this regard and see how we can fulfil our obligations more effectively.”
Savings in various departments are being used to address service delivery backlogs in the Department of Energy, including street lights, environmental resources, waste management, grass-cutting, tree maintenance, roads and stormwater maintenance and repairs.
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