This follows two letters National Treasury sent to Mbombela last year stating that if the municipality did not rectify its financial issues, Mbombela’s equitable share allocation (money allocated from the national government to municipalities across the country, every three months) would be withheld.
The municipality presented the adjusted budget at a council meeting in late February, announcing in the budget that “other expenditure” and “other materials” will be decreased by R11 million and R2 000 000 respectively.
This “other expenditure” and “other materials” typically deal with stock in stores such as cement and tar for potholes and light bulbs for street lights.
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DA councillor and MPAC member, Sanley van der Merwe, said after the council meeting to Lowvelder that “it is very concerning for the opposition that cuts have been made in these two areas.
This includes operational costs for keeping your open spaces like parks clear.
Van der Merwe added, “It is a known fact the municipality’s actual percentage spent for maintenance of existing assets is less than two per cent where Treasury’s guideline for the municipality indicated eight per cent should be spent.”
Treasury mandated the municipality, in its agreement with Mbombela following breaches regarding the municipality’s inability to service arrears debts owed to creditors, that the City takes measures to reduce operational expenditure and have a concrete plan to service historic creditors.
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Van der Merwe asked where the credit reduction plan was during the presentation of the budget, however, this was not answered.
The DA asked that council be provided with the plan as the last one they had received was back in 2019.
“We also have no reports or information on how the municipality is going to deal with the trade creditors,” she said.
“The big accounts are bulk accounts like Eskom, the Department of Water and Sanitation, and the Department of Community Safety, Security and Liaison. These are always the ones highlighted on the creditors reduction plan, but what about our trade creditors that have an outstanding amount of just over R200 million?
“The trade creditors are the smaller, local businesses such as your printing companies and so on.
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“They are not paying these business back and so ultimately these companies that actually contribute to municipality’s income are closing down.”
Another concern is the municipality’s collection rate in areas across Mbombela.
While the municipality has shown a four per cent over-collection, which Van der Merwe said “speaks to the cash flow available within the municipality”, it is “abundantly clear that Nelspruit and White River combined contribute 80 per cent, in revenue income for the municipality.
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“All other areas contribute, but a fraction of the rates that are being collected.
“This begs the question why we see ward coucillors and companies cleaning Nelspruit and White River, cutting grass and picking up rubbish, while there is no sight of EPWP workers or community works programme staff.
“Nobody is cleaning in the town although Nelspruit and White River are mainly paying for all the services.”
Lowvelder asked the City of Mbombela what steps the municipality were going to take to ensure outstanding creditors are paid and how to reduce outstanding debtors.
The municipality responded with an extensive list of the payment rate per billing town for the past six months and the debtors payment levels per billing cycle up to the end of January 2021.
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