WITH traffic fine income dwindling and overtime soaring, the City of uMhlathuze has upped its budget from the R3.1-billion approved in May last year, to R3.3-billion.
The numbers were shared during the Adjustment Budget presentation to Exco on Tuesday by Chief Financial Officer Mxolisi Kunene.
Kunene stressed that this was not a ‘new budget’ and was part of a normal adjustment process regulated in terms of the Municipal Finance Management Act.
Overtime was reported up by R7.1m, while traffic fine income dropped by R1.5m, with no corresponding reduction in expenditure, much to Mayor Mdu Mhlongo’s ire.
‘We have been discussing this for the past two financial years.
‘Contracted services used to recoup the fines but since that contract ended it appears nothing has happened.
‘This is a bureaucratic error within the responsible department.’
Depreciation
But while these two issues received plenty of attention and criticism, by far the biggest contributor to the upward adjustment was an additional R124-million for depreciation and asset impairment (plus R55m), debt impairment (plus R18m) and post-retirement benefits..
Mayor Mhlongo hastened to explain the R124m did not involve any payments, but was merely an under-calculation of depreciation in the original budget.
‘There is nothing improper here, just a misalignment of budget figures. Once corrected, the issue will be resolved.’
Emphasis would have to be placed on additional resources allocated to repairs and maintenance.
On the question of overtime, Cllr Mhlongo said nobody begrudged legitimate and reasonable overtime.
‘However, we must reign in the overtime, such as by ensuring good turnaround time when faults are reported.’
Councillors spoke of ‘deliberate delays’ by repair crews who factored overtime into their salaries.
No mention was made of whether staff shortages might have necessitated the need for extra overtime.
Security costs
Meanwhile, the bill for security has increased by 77% over the last six years.
The CFO said this was ‘not sustainable’ and ‘expenditure needs to be curbed, especially for functions funded by property rates’.
More money was also being paid to Eskom, while security and matters relating to the local government elections also upped expenses.
Owing to the global economic crisis, a conservative approach to revenue projections was adopted.
While the budget was to act as a catalyst for economic growth, cost containment measures would reduce non priority spending.
There were positives on the income side:
• Supplementary valuations saw an increase in property rates;
• With Alloys (ex-Tata Steel) fully back on line by mid-year, electricity service charges will rise;
• Water revenue has gone up owing to Level 4 drought penalties imposed.
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