Pretoria - Opposition councillors in Tshwane were left frustrated last week when mayor Randall Williams withdrew a report on the City’s revenue and expenditure from council.
The report presented a five-year review of actual revenue and expenditure trends for the financial years 2015/16 and 2018/19.
Williams did not give a reason why the report was withdrawn during the monthly ordinary sitting.
He instead informed councillors there was no rule that compelled him to give the council an explanation on a decision to withdraw a report from the agenda, especially when it was not ready.
This, however, frustrated EFF chairperson Obakeng Ramabodu and ANC chief whip Aaron Maluleka, who said Williams operated in bad faith, especially because they had spent time preparing to have discussions on the report and to talk about irregular expenditure.
Maluleka said Williams’s unwillingness to explain to council why he withdrew the report would set a bad precedent.
According to the withdrawn report seen by Pretoria News, the City was yet to spend in line with National Treasury’s requirement of 8% on repairs and maintenance, which had not happened over the past five years.
In addition, the City did not succeed in keeping expenditure on contracted services below the National Treasury norm of between 2% and 5% of total operating expenditure.
The City‘s investment in capital infrastructure also decreased in rand value during the five years. Capital expenditure from own funding was at minimum levels, with the lowest at R29 million and the highest at R208m.
Analysis of key financial ratios indicates the City had become more reliant on borrowing to fund its capital expenditure, and thus the gearing ratio increased.
The report indicated this was accompanied with a decline in the current ratio and acid test ratio, to levels below 1:1, and overall, even though the City’s finances started to recover, performance in 2019/20 and the declined collection rate to 80% in 2019/20 threatened its financial sustainability.
“Unless this improves, the City’s financial viability remains at risk,” it read in part.
However, the report explained that the period under review had been marked by persistent tough economic conditions in the country, which had serious consequences for public finances in particular.
These conditions were exacerbated by the Covid-19 pandemic that started in 2019/20. Thus economic growth continued to be under pressure.
Despite the subdued economic performance of the country, the City’s revenue continued to grow, but it eventually gave in and slowed down to the lowest growth in recent history in 2019/20. Revenue collection slowed down to 89% in 2018/19 and 80% in 2019/20.
“Therefore, there is a risk for future revenue collection if economic conditions do not improve.”
During this period, the City generated R150.1 billion in operational revenue, excluding capital grants and transfers, and incurred expenditure of R154.5bn on operations, resulting in deficits in 2015/16 and 2019/20.
An amount of R16.5bn was invested in infrastructure, funded from capital grants, long-term borrowing, own revenue, and public contributions and donations.
Pretoria News