MEC Maile’s administrators trying to push Tshwane off a fiscal cliff

19 May 2020

Recent financial reports relating to the City of Tshwane show the beginning of a collapse of the city’s income and revenue streams, thanks to the mismanagement of Maile’s unlawfully appointed administrator.

For the first three weeks of April the city reported a cash flow that was 36% below what was projected for this period.

This is due to the under-collection of R610 million in municipal revenues.

This is catastrophic for the city’s finances, and unless stringent financial interventions are deployed the resulting losses could plunge the city into serious financial distress.

While the financial constraints as a result of the lockdown likely contributed to revenue loss for the collection to be as low as 64%, the actual figures reported indicate that something has gone seriously wrong with the city’s ability to ensure a reasonable level of collection during these trying times.

If the current losses continue further into May it could severely constrain the city’s ability to deliver on its mandate to residents and facilitate continuous and reliable service delivery during the lockdown.

Maile’s administrators have been deployed since March and it is clear that they have failed hopelessly in ensuring that there was stability in the management of the city’s finances.

At the end of June 2019, the DA-led administration managed to ensure the city was in surplus to the tune of R2 billion as a result of cost-cutting and strict financial management.

Similarly, the operating account at the end of March 2020 was R284 million.

It is likely that all those progress is going to be lost under Maile’s administrators.

The administrators should immediately introduce cost-saving initiatives to reduce unnecessary spending in the city, along with ensuring stability in the debtors' book to better manage cashflow.

The budget planning for 2020/21 should also be adjusted to ensure that income projections are set to mitigate this under-collection. This must be one of the core service delivery objectives.

If urgent interventions are not implemented by the administrators it could lead to financial ruin in the Capital.

This point cannot be emphasized enough, if the level of under-collection that occurred in April is sustained it will bankrupt the country’s Capital city.

Issued by Randall Williams, DA Tshwane Mayoral Candidate, 19 May 2020