DURBAN - UGU District Municipality is overhauling its operations, including the implementation of brutal budget cuts to save millions of rand in order to keep the struggling municipality afloat.
The budget cuts would include reducing overtime work, eliminating senior posts that come with high pay, restructuring agencies under the municipality’s control and cutting out spending not related to the municipality’s core business.
Mayor Phumlile Mthiyane said the South Coast municipality had to take brutal and unpopular decisions and make cuts that could have a direct impact on its employees.
The draconian measures would be instituted to save R84 million from different areas to fund its operations and address its debt crisis.
Mthiyane was speaking to The Mercury following revelations that in February the municipality passed an unfunded adjustment budget.
Opposition parties said the municipality had a high gross debtor’s book of R747m that remains uncollected, and a high creditors’ balance of R602m that remains unpaid.
They said that due to the under-collection of revenue during the current financial year, the municipality had no option but to reduce its expenditure by R84m to balance the books or run the risk of not receiving its equitable share from the National Treasury at the end of this month.
Mthiyane said the municipality was planning to cap overtime work, halt all non-core functions that were provided by the municipality and to stop all recruitment on budgeted vacant positions.
There were concerns that the municipality might also cut contracts for water tankers, but Mthiyane said that while they had noticed that large funds were exhausted on the water tankers, they could not cut this service.
“We are going to be making decisions that will be unpopular. For instance, on overtime, there are two types of overtime – scheduled overtime and emergency overtime. If we spend R5m and we can cut that by R3m, that would be a saving,” she said.
“We are going to stop all projects that are not the core mandate of the municipality. We are going to redo our organogram; for instance we will not have an HOD and senior manager in one unit. We will do away with the senior manager positions as and when people resign, but we will not demote people,” she said.
She added that even the construction of a municipal office would have to stop, and that money would go towards savings that were needed by the municipality.
She said the municipality would also be amalgamating its tourism entities.
“We have agencies that we will combine. We do not see the point in paying two CEOs,” she said.
Mthiyane said these changes were necessary for the municipality to get out of debt, and urged members of the public to be patient and to pay for services.
“We know that people want to pay but our billing system is an issue that affects them, and we are working on addressing that,” she said.
George Henderson, a DA councillor in Ugu, said they had not supported the adjustment budget as it had many shortcomings, and insisted that the building of the office was still going ahead.
“There is no provision to settle any debts, and an undisclosed amount of operating revenue will be used for building new offices. No cost-benefit analysis has been done to illustrate that the building costs are more efficient than the current lease that is in place.
“The new chief financial officer (CFO) commenced duties on March 1, after the municipality was without one for more than 18 months. He is a chartered accountant with 10 years’ experience in local government as a CFO, where he achieved five consecutive clean audits.
“We hope he will be able to dig Ugu out of the dark hole it finds itself in. The vacant municipal manager position will also be filled in the next month. These two very important positions are crucial for turning Ugu around,” he said.
IFP councillor Sfundo Ngwane said they would monitor the proposed cuts.
“If you touch overtime, you are touching on the supply of water as there are water tankers that need to be delivered, and plumbers that need to fix leaking pipes. Ugu should focus on two things, water and sanitation; whatever savings are realised from this will go towards addressing the issue of ageing infrastructure,” he said.
THE MERCURY