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Salaries of City of Cape Town's staff is a long-term 'risk to City'

Cape Town - “Excessive increases in employee-related costs without the corresponding increase in revenue could negatively impact on the long-term sustainability of the municipality,” a report said. Picture: Cindy Waxa/AFRICAN NEWS AGENCY/ANA

Cape Town - “Excessive increases in employee-related costs without the corresponding increase in revenue could negatively impact on the long-term sustainability of the municipality,” a report said. Picture: Cindy Waxa/AFRICAN NEWS AGENCY/ANA

Published May 28, 2018

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Cape Town - The huge salary bill at the City of Cape Town is putting the municipality at risk, because it might not have the revenue to pay for it in the long run.

In a massive red flag raised by the DA provincial government in a report to its DA-run City of Cape Town, the huge increases in employee-related costs are marked as “an emerging risk”.

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The Western Cape government did an analysis of the City’s integrated development plan and budget and raised concerns.

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“Excessive increases in employee-related costs without the corresponding increase in revenue could negatively impact on the long-term sustainability of the municipality,” the report said.

Other risks and recommendations pointed out in the report are that repairs and maintenance are important to ensure that full benefits are derived from assets over the initial expected lifetime of assets. The City should explore further areas to cut back on expenses to sustain the healthy financial position, while at the same time providing acceptable levels of service delivery,” the report noted.

The City’s total operating expenditure for the 2018/19 financial year increased by 8% from R37.34 billion to R40.29bn.

“Employee-related costs and bulk purchases remain the expenditure drivers, accounting for 30.24% and 24.39% respectively of total operating budget over the medium-term revenue expenditure framework. The employee-related costs are within the National Treasury norm of between 25% and 40% of total operating expenditure,” the report said.

Johan van der Merwe, of the mayoral committee for finance, previously said an error had crept into an external annexure table in the City’s tabled draft budget.

The typo caused the figure to read 17% and not 7.1%, Van der Merwe said.

Xolani Sotashe, ANC Cape Town leader, said the provincial government had confirmed what they had been advocating. “We have raised the very same issue on other occasions. The senior managers in the City are milking this municipality.

“It’s not the lower-band workers who are getting the big bucks. We don’t agree with this budget because the tariffs will hit the poorest the hardest,” he said.

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Janine Myburgh, president of the Cape Chamber of Commerce, said she was sure there were many other savings that could be realised if officials and councillors put their minds to the job instead of playing politics.

“The place to start is those 17% pay increases for top management that will take the remuneration packages of directors to a staggering R3.2m a year. Start at the top and set an example.

“It is ludicrous to pay salaries like this to the people who should have been writing reports to the council on the need to recycle water and make contingency plans for a drought that developed over three years. Instead we had panic and last-minute attempts to drill for water and desalinate seawater,” she said.

Grant Haskin, ACDP councillor, said the DA-led administration had placed tremendous strain on residents of Cape Town.

“This is unfair. We are not supporting this budget, because even the very rich are now complaining about these increases. It is really worrying,” he said.

@JasonFelix

[email protected]

Cape Argus

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