LETTER: By TIM BULL, secretary, Makana Residents’ Association
This letter contains some startling facts.
It summarises information from the latest agenda of the Makana Municipality Finance Portfolio (FAME) agenda. Makana Municipality needs to tackle several pressing problems if we are going to get the level of service delivery we all want and need.
Makana was placed under Administration in 2014, which largely failed to achieve the desired turnaround for our City. Many people, including Ministers, have concluded that the intervention was a waste of money.
One helpful legacy from the period of Administration is the production of a Financial Recovery Plan that Makana is legally obliged to follow and update annually.
Most of the water outages, electricity blackouts, uncut grass, stray animals, lack of law enforcement, no meter reading and all the other Makana failures are because Makana has not implemented the Financial Recovery Plan satisfactorily.
Behind all these issues lies a lack of governance and financial management. For example, in 2016 Makana Council voted unanimously for a resolution to place an embargo on overtime. The Municipal Manager and his directors have direct responsibility for managing overtime, so you might think that the embargo would have led to a cut in overtime.
Instead, overtime has risen from about R500 000 per month in 2016 to a record-breaking R1 234 128 in January 2022.
The anomalies are many. Why is there overtime for Libraries, Parks Admin, Stores, Caravan Park, Community Halls, Parks Transport and Sports Grounds? It would be simple enough to tell these non-emergency groups that there is ‘No Overtime.’
You probably know that Parks Department had a lot of equipment stolen about six months ago, and it has been evident that most Parks Dept staff, if they have attended work at all, rarely arrived at 8 am and mostly left before midday. When questioned, they said, “What’s the point in being at work when there are no tools?”
This situation was rectified in late January when Makana purchased new tools. It is hardly satisfactory that staff have been paid for months of no work. But it is unbelievable that Parks Department has also carried on claiming overtime!
The monthly average claimed for maintaining ‘Islands and Verges’ is over R42 000 per month for the months when they had no weed-eaters or grass-cutting equipment. It peaked at Christmas, when no-one was at work, at R47,682 – that’s a lot of turkey.
Perhaps the Chair of FAME would like the Director for Community and Social Development to come and explain.
The monthly overtime bill could be cut in half without any adverse effect on service delivery.
The Financial Recovery Plan (FRP) and Revenue Enhancement Strategy are easy to read, with clear instructions on improving revenue collection. Amongst the ideas are that Makana should not bill dead people. To avoid doing this requires data cleansing and accurate billing.
When Makana was placed under Administration in 2014, it was only collecting about R65 for every R100 billed. Such losses are not sustainable, especially with an oversized workforce.
After all the interventions and help Makana has received since 2014, the average calculated collection rate for January 2022 is only 49.9%. The worst category is water, with a collection rate of only 19% against the amount billed. This represents a huge loss of public confidence in Makana, where half of all billing is not paid.
When did someone come and read your meter? Did you even know that Makana employs meter readers? The FAME agendas used to give a breakdown of meters read per month by each worker, but the percentage read was often less than 10%, and it seems Makana has given up producing this report.
This is unfortunate as accurate billing is a cornerstone for revenue collection. Perhaps Makana should publish how many businesses and residents dispute their municipal bills? Reliable billing data is essential to enable Makana to pursue non-payers.
Debt to Makana
Makana has done a lot of damage to everyone by failing to cleanse its debt book. Makana needs to write off the uncollectable debt. Constantly claiming a hugely exaggerated figure gives District, Provincial and National governments the false impression that Makana would be solvent if it collected all the debt. In other words, it is our fault that Makana is in financial trouble because we don’t pay our bills.
Makana claims that we owe a staggering R718 million. This figure is not true; Makana relies on average meter readings as no one bothers to read them. A large proportion of this alleged debt is against indigents, i.e. people with no means of payment, others have left Makana years ago, and some are deceased.
Of this grossly inflated figure, only R78 million is less than 120 days (four months) old, and some of that debt will be uncollectable as it is billed to people who can’t pay or are in dispute because their bill is incorrect.
If any of the remaining R718 million debt is collectable, then Makana should be taking action to collect it. The fact that very little enforcement is taking place is probably because Makana cannot prove that the bills are accurate.
Since the period of Administration, which ended in 2016, Makana has employed REVCO to help them cleanse data and resolve uncollected debts. The data is still in chaos, and the debt has continued to increase. REVCO have been paid many millions since 2016 and are shown to have been paid R218 757 in December 2021. Surely this is a complete waste of money?
Officials and workers who owe money to Makana
According to the Finance Agenda, government departments owe Makana over R22 million. Such a sum would pay for numerous repairs to vital vehicles and equipment.
Then we have Councillors. The headline total shows credit but indicates that they owe Makana over R10,000 for electricity and over R6,000 for rates. Somewhat small amounts, but not great to have Councillors in arrears.
Finally, the Municipal workers are shown as owing Makana R2 314 732. Really? R786 953 of this total is for rates arrears.
Salaries eating Makana
The Finance agenda records itemised expenditure for Makana totalling R29,159,066 in January 2022. Out of this total, the ‘Salary Related Costs’ are shown as R19 458 500.
National Standards state that municipal salaries should not amount to more than 40% of expenditure, the ideal being closer to 35%. In Makana, in January this year, wages accounted for 66.7% of expenditure.
No further explanation is required for the broken roads, pipes and electricity network – not enough revenue is ring-fenced to buy materials such as tar and pipe fittings or to look after the specialised vehicles such as refuse trucks. Far too much is spent on salaries.
“As at the end of January 2022, the total debt owed (by Makana) to creditors amounted to R81 046 000.” Although bad, it should be acknowledged that Makana’s total debt in 2016 was over R100 million. This reduction has mainly been achieved by paying down the Eskom debt in compliance with a High Court Order.
There is more, mainly about ongoing contracts, tenders and capital projects. If you want a copy of the Finance agenda, please send a request to firstname.lastname@example.org
Thank you for reading,