PROPOSALS FOR BUDGET INPUTS

1. Give clarity on the Cost Containment measures by releasing detail of savings envisaged
2. Reconsider the allocation of budget resources to Votes especially the Vote of the Executive Mayor as a starting point
3. Table a concrete plan on how to rectify the allocation to employee related cost
4. Correct the non allocation of budget resources to overtime with a plan on how to manage it.
5. Reduce the tariff increases for Rates and Sanitation to zero. The loss of about R163 million can be recovered by reducing the provision for debt impairment with the same amount
6. Waste removal – submit a plan on how this service will be rendered on a sustainable basis
7. Indicate what steps will be taken for non-compliance regarding the Centlec Budget
8. Revisit the use of Debt Collection contractors to collect outstanding debtors
9. Make it a decision to collect all outstanding Government debtors in the 2020/21 financial year.
   10.Replace all rotating water meters with pre-paid meters
10. Develop a plan how to reduce water losses. It doesn’t help to say we are going to reduce it, submit a plan that can be monitored.
11. Develop a greater urgency to execute the capital budget with measurable progress parameters

Analysis by DA Mangaung Cllr Hans Britz

Below is more detailed proposals:

The DA shows that it is possible to reduce the tariff increases for Rates and Sanitation
to zero: This document shows that it is possible to balance this budget while providing much
needed rates and tariffs relief and economic stimulus by not increasing property rates and
sanitation tariffs. This can be done without impacting on the delivery of basic services, by
“cutting the fat” from a number of votes and line items that do not relate directly to service
delivery and improving efficiency. Mangaung metro must, amongst others:
a. Employee costs
i. Table a concrete plan on how to rectify the very high allocation to employee
related cost. This increased with R640m from 2016 to a total of R2 bn
ii. Correct the zero allocation of budget resources to overtime with a plan on how
to manage it. There are unavoidable emergencies like burst pipes that need to
be attended to, but the current actual expenditure of R150m on overtime is
expedient. To date the executive mayor has spent R5.4 million on overtime and
Waste and Fleet R53 million.
iii. Issues that need to be taken into account include:

1. The perception that political offices have inflated staff compliments
   especially since 2016.
2. Alleged excessive overtime claims for any non-service delivery, non-core
   or managerial posts.
3. The salary bill provides for: A R3, 09 million salary package for the
   municipal manager R2, 743 million for the chief of Finance. Between R2,
   5 million and R3, 09 million for the heads of departments. R1, 604 million
   and R1, 305 million for the mayor and speaker. A further R1, 232 million
   for the chief whip and R1, 35 million for the deputy mayor. While these
   salaries might be warranted in a well-functioning metro with a solid
   revenue base, proper debt collection and cash flow management, the
   current state of the metro does not warrant the current office bearers to
   get these salaries.
4. The salaries of the administrators and their support staff are not
   indicated in the budget.

b. Debt management
i. The loss of about R163 million from zero rates and sanitation tariff increases
can be recovered by reducing the provision for debt impairment with the same
amount
ii. This can be countered by making a decision to collect all outstanding
Government debtors in the 2020/21 financial year. (R1.53billion)
iii. Revisiting the use of inefficient Debt Collection contractors (costing R36m) to
collect outstanding debtors. This can be done more successfully in-house at a
lower cost.
iv. Replacing all rotating water meters with pre-paid meters to reduce the growing
water debt
c. Other costs
i. Reconsider the allocation of budget resources to Votes using the Vote of the
Executive Mayor as a starting point
ii. Give clarity on the value of the list of Cost Containment measures by releasing
details of savings envisaged.
iii. Develop a plan how to reduce water losses. It doesn’t help to say we are going
to reduce it, submit a plan that can be monitored.
iv. Non-core spending: All funding for non-core municipal programs such as
mayoral and speaker legacy/prestige programs, event sponsorships, the
habitual millions of rands tenders for voter education just before the elections
and catering should be cancelled.
v. Travel: All funding for extensive international travel for public office bearers and
officials should be cancelled
d. Maximizing revenue:
i. Social services, metro police and planning departments must pull up their socks
and with immediate effect ensure they start cover more of their departmental
expenditure by issuing and collecting fines and penalties for traffic, law
enforcement, building, dumping and planning violations. This could potentially
earn the city more than R100m in revenue. If the mayor, City Manager and
heads of department continue to prove they are not up to the task, they must
leave. In 2019/20 council illegally attempted to write off R20 m in uncollected
traffic fines due to departmental failures. Not only is this illegal, but it shows the
continued lost opportunities for raising revenue if the department functions.

4. Service delivery failures must be addressed to reduce the risk of taxpayer revolt and
   boost economic recovery.
   a. A major issue for businesses and residents alike is the lacking basic service delivery
   such as water, electricity, streetlights, sanitation, refuse removal, grass cutting, tree
   cutting, fixing of potholes and opening blocked storm water pipes and inlets.
   b. The city has been failing residents in the provision of all these services, while the call
   centers do not function properly. The risk of a rates revolt by residents is growing
   continually as service delivery becomes more erratic.
   c. Mangaung must, amongst others: Submit a waste removal plan detailing how this
   service will be rendered on a sustainable basis. The erratic and crisis based
   management at the moment is creating a massive risk for rates revolt which could
   ultimately lead to the inability to pay salaries of all workers.
5. Capital Budget: Develop a greater urgency to execute the capital budget with measurable
   progress parameters. With 1 month left, less than 40% of the capital budget has been spent.
   This while the mayor has conceded in the NCOP that Mangaung uses capital grants to pay
   salaries.
   Vehicles: The budget provides for R87m in capital expenditure for “other vehicles”
   through lease financing of the same amount, the biggest single expense. Any funding
   for the purchase of official vehicles for political office bearers such as Executive
   Mayors/MMCs/Speakers as well as for the personal use of Municipal Managers and
   Directors should be prohibited. The only vehicle purchases to be considered should be
   for the support of service delivery, such as refuse collection compactor trucks, tractors,
   Fire, Sanitation, Water and roads team trucks and only if absolutely required.
   Furthermore, the structure of this massive tender is designed to limit the number of
   possible companies that can tender, as it combines a number of different industries.
   This tender could rather be split up so that competitive bidding can ensure efficient use
   of resources. I.e. refuse compactor trucks, trucks for service delivery, vehicle lease
   agreements, smaller vehicles etc.
   The same goes for massive IPTN projects that should be broken up in order to allow
   local businesses to directly compete for smaller parts of the work. IPTN tenders and
   sub tenders should also be advertised and fairly awarded.
6. Centlec and Bloemwater tariffs should not be increased in excess of the increase of the bulk
   cost from Eskom and Bloemwater:
   Indicate what steps will be taken for non-compliance regarding the Centlec Budget