City to lay complaint against City Press
10 June 2018
This morning I note, with disappointment and surprise, an unsubstantiated report in the City Press alleging that the City of Johannesburg is both ‘cash-strapped’ and ‘heading for a bailout’.
Nothing could be further from the truth.
The article makes a number of incorrect claims which only serve to manufacture panic regarding the City’s financial position.
Worst still, these inaccuracies were specifically addressed with City Press prior to the publication of the article. However, the publication has inexplicably elected to spread these claims.
I would like to reassure our residents that the City faces no financial distress nor is the City in need of a bailout.
The City Press’s chosen headline is grossly misleading and irresponsible.
The City’s Cash Management Report, as required by Section 71 of the Municipal Finance Management Act (MFMA) which has been approved by MAYCO and is on its way to Council, clearly stipulates that the City’s cash remains in a healthy state at over R3, 2 billion.
The publication has deliberately sought to misrepresent this as R1,2 billion in order to forward their chosen narrative.
Further to this, the City continues to meet its salary commitments. At no point has there been any risk of the City not being able to do so, either presently or in the future. This too was addressed with the publication.
In omitting this from their reporting, the publication has acted irresponsibly and created unnecessary panic amongst City employees.
As the new administration, we inherited a City which had been run under a system of chaos and disorder. A clear sign of this is the extremely high levels of corruption which has been uncovered – close to R18 billion.
Strangely, the reporting within the City Press today, takes specific issue with the manner in which the City has approached the fight against corruption – having spent R80 million to pursue the 3500 cases of corruption. Again, this is a figure which the paper incorrectly reports on.
The previous ANC administration’s corruption robbed the residents of our City of much needed service delivery. Indeed, in 2017, the former ANC MMC for Housing, Cllr Bovu was arrested for the illegal sale of City owned land to two residents of our City.
Our multi-party coalition government makes no apology for seeking to reverse the legacy of corruption left by the ANC.
Over the years, there has been significant mismanagement of the City’s finances by past administrations. These inefficiencies have weighted heavily on the financial health of the City. This is the history of mismanagement which our administration has been seized with reversing.
The reporting in the City Press today would incorrectly suggest that this includes raising tariff’s charged to residents.
This is incorrect.
During our budgeting process, a concern was arisen regarding the relative increases in the budget’s proposed tariff structure for the 2018/19 financial year.
In this regard, the City has made every effort to minimize tariff increases, reduce pressure on stressed household income while safeguarding the City’s ability to deliver services to our residents.
The multi-party coalition government has actively engaged both NERSA and Rand Water, contesting above-inflation based increases being passed onto municipalities.
Despite our efforts, these tariff costs have never the less been transferred to municipalities.
As such, Council sought to amend our electricity tariff to 7.17%, down from 7.37% which is based on the application of the National Energy Regulator of South Africa (NERSA) municipal tariff guidelines applied on the Eskom increase of 6.84%.
The proposed average tariff increase on water, sewerage and sanitation is to be reduced by 1% down to 13.2%, based on the Rand Water tariff increase of 12.2% and includes a 1% retail margin aimed at improving and maintaining the distribution network.
Within our proposed budget, the City has also taken steps provide relief to our residents, particularly those within our poorest communities.
Ultimately, under the multiparty coalition government, we continue to improve the financial position of the City so as to deliver better quality services to our residents:
- Under the ANC-government, the City’s total collections amounted to R32.4bn which equated to an average monthly collection of Revenue of R2.619million. Under the new administration, average monthly revenue collection, as at the end of April 2018, stands at an improved R2.8 billion;
- Through a multi-disciplinary task team, involving political leadership, the Managing Directors of municipal entities, heads of departments and technical experts, we are working towards ensuring that billing challenges are dramatically reduced. This team is already beginning to produce results. The major component of turning the billing system around involves tightening the value chain, reviewing processes, policies and procedures and purifying our data;
- Late last year, through the intervention of the Executive Mayor, the City launched a multi-departmental project aimed at enforcing by-laws and bringing the rule of law to the City of Johannesburg. This project is known as Operation Buya Mthetho. As part of this daily operation, our revenue enhancement team, along with municipal service technicians inspect properties across the City for illegal connections and municipal service abuses. To date, Operation Buya Mthetho has brought in a total of just under R600 million owed to the City that would previously have been lost through illegal connections and historical debt for the non-payment of services;
- In assessing the proposed City budget for the 2018/19 financial year and medium term, National Treasury found that the budget is funded and credible. National Treasury also praised the improvement in the current ratio and the number of days cash coverage which has increased to over 52; and
- Our debt to revenue ratio remains in line with National Treasury’s norm of 45%.
These efforts by the City are not reported nor has the impact of corruption been properly reported.
Late last week, I was advised of how Gupta linked associates, through Regiments Capital, have placed City funds at risk through unsecured lending to Denel, a state owned company, to the tune of R290 million. As part of the City’s investment structure, the City utilises a sinking fund to pay back loans and investments made to the City, amounting to over R18 billion.
In 2012, the City of Johannesburg, under the leadership of Parks Tau, was alleged to have rigged a large tender in favour of Regiments, a Gupta-connected empowerment firm, to manage this sinking fund.
Currently, the City is engaging with the Minister of Public Enterprises, Pravin Gordhan, and his department in good faith over the next few months, and following assurances by the Ministry, we are prepared to roll over this debt for a few months as this Minister, his department, and the new board of Denel, work to stabilise this entity.
While I have incredible faith in the media's role in protecting the public interest and ensuring that those who exercise public power are held to account.
However, this requires that the media perform this role in a fair, accurate and balance manner.
Indeed, the press code requires that:
‘’1.1. The media shall take care to report news truthfully, accurately and fairly.
1.2. News shall be presented in context and in a balanced manner, without any intentional or negligent departure from the facts whether by distortion, exaggeration or misrepresentation, material omissions, or summarisation.
1.3. Only what may reasonably be true, having regard to the sources of the news, may be presented as fact, and such facts shall be published fairly with reasonable regard to context and importance. Where a report is not based on facts or is founded on opinion, allegation, rumour or supposition, it shall be presented in such manner as to indicate this clearly.’’
I believe that the present article falls short of this standard and represents a violation of the Press Code.
As such, the City will be laying a complaint with the Press Ombudsman regarding this City Press publication.
Issued by Luyanda Mfeka, Director: Mayoral Communications, Office of the Executive Mayor, 10 June 2018
