The financial outlook for Nelson Mandela Bay continues to deteriorate with the September collection rate slipping to 85.5%. This is 10% below what is required to maintain a stable fiscus that will fund our R8 billion budget and guarantee the delivery of services.
The DA is concerned that approximately R40 million in revenue remains uncollected by the municipality. The reduced collection rate is largely due to the fact that a budget deviation to allow us to appoint a panel of attorneys to do our debt collection has not been renewed. This deviation was valid for three months expiring on 30 September 2013 and is now sitting on the desk of the Acting Chief Operating Officer. Adding to our collection problems, the labour dispute in Debtor Management remains unresolved and the staff ‘go-slow’ continues.
Ongoing negotiations between the Metro’s high energy users and the municipality have produced little to no positive outcome resulting in the increased withholding of rates which will only further destabilize our financial situation. Adding fuel to the financial fire is the fact that the municipality is left with only 15 days working capital (below National Treasury’s recommended minimum of 30 days) which has exposed us to unnecessary risk.
The consequence of all of these factors is a diminished capacity to deliver services come the adjustment budget early next year. This is something Nelson Mandela Bay does not deserve and cannot afford.
A budget task team was convened to scrutinize the budget on a regular basis and make recommendations to ensure