Msunduzi 2021/22 budget: A strategy to siphon more funds from already economically strained ratepayers

Issued by Cllr. Sibongiseni Majola – DA Msunduzi Caucus Leader
03 Jun 2021 in Press Statements

The Democratic Alliance in Msunduzi is gravely concerned about the Municipality’s 2021/22 budget as it will have an inimical effect on the municipality in the long run and cause strain to already financially burdened ratepayers.

On Wednesday, 31 May 2021, the Msunduzi Municipality in terms of Section 16 of the Municipal Finance Management Act, adopted its last budget of the term. It is unacceptable that the next elected administration will inherit a collapsed financial situation created by the current administration.

In 5 years Msunduzi has spiralled drastically into disarray, with all Auditor-General outcomes negative, starting with two disclaimers in 2015/16 and 2016/17, followed by adverse in 2017/18, and another two qualified in 2018/19 and 2019/20. To add insult to injury, we were then finally placed under administration (Section 139 (b)) for the second time in 10 years, which has now been extended twice.

It is abundantly clear that the ANC-led administration has managed to completely collapse the capital of KZN. This is due to poor financial management, maladministration and rampant corruption.

The DA believes that if we just focus on the core functions of this municipality, without political interference; employ competent, experienced and qualified management; and enforce our by-laws without fear or favour, we would not need to increase tariffs exponentially.

Approved new tariffs increases, were –

  • Rates: 4.06% – the DA proposed 3%
  • Sanitation: 5.35% – DA proposed 3%
  • Refuse: 5.35% – DA proposed 3%
  • Water: 7.00% – DA proposed 6%
  • Electricity: 14.59% – DA proposed 6%
  • Others: 5.93% – DA proposed 6% (fines and penalties*)

 

These fines will enforce compliance of our bylaws and to ensure that residents take our Municipality seriously when enforcing our policies

 

The DA’s objection, after a series of consultations with other stakeholders, was clear that current increases are unaffordable especially under the current desperate economic situation, and that less than half the population of Msunduzi cannot continue to carry the burden of a failed local government that cannot execute its basic mandate.

The DA believes that R6.4 billion revenue is underestimated and we believe that Msunduzi can achieve a balanced, funded and realistic budget if they:

  • Regularize  all illegal developments in terms of our Spatial Planning and Land Use Management Act (SPLUMA) by-laws.
  • Increase our rates base accordingly.
  • Drastically reduce irregular expenditure (e.g. private security as per AG report)
  • Manage our entities accordingly to enhance our revenue.
  • Implement our Credit Control Policy equitably.
  • Register at least 90% of our indigent customers.
  • Prosecute theft of assets and fraudulent services.

An approved 5.50% increase on employee related costs is meant to address +/- 50% overall vacancy rate with 57% vacancies in particular at the technical department (which includes roads, water, electricity, mechanical workshop and sanitation departments]. The maintenance budget is supposed to be at least 8% of our overall budget, but we are barely reaching 3%.

This ultimately is a clear indication that the municipality will have to manipulate numbers to ensure that the books balance, but the reality will be that to execute at least a percentage of the prescribed mandate, the municipality would have to “borrow from Peter to pay Paul”.

The only chance Msunduzi has is voting for a party that has a track record of good governance and punishing the ANC at the polls later this year.