DURBAN - THE financial stability of the eThekwini Municipality has come under scrutiny, with councillors demanding that mayor Mxolisi Kaunda provide them with detailed financial information of how much money the city “has in the bank”.
Councillors are demanding to know how much the municipality, which they claim is “on a financial cliff”, will collect in the coming months to ensure sustained service delivery. They warned that basic services were so poor in some communities that residents were considering withholding their rates.
At yesterday’s full council meeting, DA councillor Warren Burne led the charge demanding that Kaunda produce the financial details in the next meeting of the finance committee next month.
Burne said available information showed that the city had been burning through cash since August last year.
Opposition parties have suggested that the city had just days of cash in the bank instead of more than a month’s worth which it is required by legislation.
During the meeting, the DA revealed that in December, the municipality had negative cash coverage of four days. This emerged as councillors scrutinised the city’s general investment report.
“I think Mr Mayor has been waiting and hoping I will not speak on this matter as I have spoken about in the finance committee meeting, but that is not going to happen as we are in a dire situation,” said Burne.
He said figures in the agenda showed that money was going down, adding that in August the council had about R5 billion, while by November they were down to about R2bn.
“Those are the gross figures in the bank, those figures include grant funds which are monies we received from somebody else for a specific purpose and also include the general insurance fund which is a kitty for calamities. Let’s not delude ourselves thinking calamities do not happen – we saw our Parliament being torched,” he said.
Burne said the grant money makes 18 days of cash in the bank and the general insurance fund makes up another 19-20 days of cash, so a total of 36 days was covered by grant money and the general insurance fund.
He said the investment report showed that at some point the city had a negative cash coverage of four days.
He said if the city had any hope of convincing residents that things were not as bad as they looked, they needed to show them the figures.
ANC councillor Nkosenhle Madlala said the city was showing a great deal of improvement. “The cash-flow issue was occasioned by Covid-19 and other economic situations beyond the city’s control. Under trying circumstances we were able to keep the boat afloat in ensuring that there is collection of revenue for service delivery to continue.”
Madlala said rates revenue was used for a variety of projects including providing services for the city’s homeless.
“If I am withholding my rates because of the discomfort that I am feeling because of service delivery, no matter how legitimate that issue is, withholding rates amounts to taking a plate of food (from someone). We encourage our residents not to resort to such inhumane acts,” he said.
African Democratic Change councillor Visvin Reddy said it was not just the issue of the finances that posed a challenge, there was a general rot that could trigger a rates boycott.
He said a recent report by the city’s audit committee had highlighted numerous concerns that bordered on corrupt behaviour by officials. “Boycotting rates is not about taking the soup (from starving families), this is about taking caviar from the mouths of greedy politicians.”
THE MERCURY