Pay what you can, municipalities urge residents as lockdown weighs heavy on citys' coffers
While eThekwini Municipality said its collection rate was still stable, Msunduzi experienced an immediate drop in its monthly revenue collection due to the coronavirus outbreak.
The national lockdown has seen numerous households rearrange their finances to make ends meet.
Chief financial officer for eThekwini Municipality Krish Kumar said although there had been a 94% collection rate for March, it expected a drastic drop in revenue collection for April.
“We are predicting a 5%-10% drop in income for April. Remember, 5% is R1.5 billion, so every cent counts. We really sympathise with our residents going through this tough time so we are asking them to pay what they can,” Kumar said.
He also warned that if a high number of residents cut back on their payments to the city, it would drastically affect service delivery.
He said the city had 60 days cash reserves on hand. However, the money had to be used “prudently”.
“This is a tough juggling act. If people cannot afford to pay for their utilities, they can make a payment arrangement. But I must warn them to be mindful that they don’t fall too far behind because it would be difficult to recover,” Kumar said.
While some residents complained that they had not received a utility bill in the post or on email from the municipality, Kumar advised that residents pay according to their March invoices.
Kumar said the City had requested all departments to realign their budgets and begin earmarking funds that can be used towards Covid-19 relief programmes.
The situation is dire for Msunduzi Municipality, which was placed under administration last year.
Chief financial officer Nelisiwe Ngcobo painted a bleak picture for the City, saying the collection rate had dropped drastically this month.
Ngcobo said, on average, the municipality collected between 85% to 90%, amounting to R380 million a month in revenue. However, as of Wednesday the municipality had not even reached its 50% mark in revenue collection.
“Normally, those who get paid on the 15th of the month would have made their payments by now.
“We’ll be lucky if we even reach 70% in revenue collection this month,” Ngcobo said.
She said the knock-on effect was detrimental, especially to small and medium creditors who depended on the municipality’s payment to keep their businesses afloat and pay their staff.
“At this point, we don’t know if we can pay them. We are not sure about salaries for our staff right now,” she said.