Helen Zille says putting the City of Johannesburg under administration will only make matters worse for the financially struggling metro.
Zille was reacting to a letter that Finance Minister Enoch Godongwana sent to the mayor of Johannesburg, Dada Morero, last month, in which he outlined several concerns regarding the municipality’s finances.
The concerns include poor revenue collection against budgeted targets, growing cash flow challenges and over-expenditure pressures, failure to pay creditors within the legally prescribed 30-day period, continued non-compliance with mSCOA regulations, weaknesses in financial reporting systems, and concerns regarding unfunded financial commitments which may further worsen the financial position of the City.
“Putting the City under administration means the dissolution of the city council completely, which means we would have to have another election, and we already have an election coming up on November 4.
“The Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, and Treasury will run Joburg. That will be a severe wrench for the City of Johannesburg, but it will also mean all the councillors will become unemployed and will not receive salaries from now until November, which will hit them very hard. Very hard. Even if they have been warning about these things and blowing the whistle very hard.”
Zille said if the governing coalition does not follow up on Godongwana’s recommendations, he has full power to place the City under financial administration rather than dissolve the council entirely.
MEC of Finance in Gauteng intervenes
The MEC for Finance in Gauteng, Nkululeko Dunga, has also expressed concern about the tensions between the National Treasury and the City of Johannesburg.
“The MEC has been briefed by the Gauteng Provincial Treasury on the state of municipal finances in Gauteng, including the City of Johannesburg, and is aware of the serious concerns raised by the Minister of Finance.
“The MEC fully appreciates the gravity of the situation and the direct impact that deteriorating municipal finances have on service delivery, infrastructure maintenance, payment of service providers, investor confidence, and the daily lives of residents across Gauteng,” said Dunga’s office in a statement on Wednesday.
Another meeting to sort things out
Meanwhile, Morero said he has spoken to Godongwana about the letter and his office will meet with the minister again to iron out the concerns raised.
He said there are “reports” that he will present to Godongwana in the City’s defence.
“To the residents, there is nothing to panic about at this stage,” he said.
‘Definitely looting happening in the city’
But DA caucus leader in the City of Johannesburg, Belinda Kayser-Echeozonjoku, believes that the financial mismanagement in the City is a result of widespread looting.
“There is definitely looting happening in the city.”
Kayser-Echeozonjoku said the DA has been approached by concerned members of the presidential working group, who have requested that the DA intervene in decisions taken by Morero and the ruling coalition.
She also said the bomb squad appointed by the mayor to boost service delivery is unconstitutional and has not shown positive results.
Samwu R10.3 billion deal
Godongwana has also told Morero to stop implementing the City’s R10.3 billion wage deal with the South African Municipal Workers Union (Samwu) in light of the City’s current financial standing. He described the deal as illegal.
The deal, described as the Politically Facilitated Agreement (PFA), will increase workers’ salaries over a three-year period, but the city cannot afford it.
