iLembe criticised for collection shortfall

The iLembe District Municipality (IDM) has improved its billing systems to increase projected revenue, but has seen repeat issues on actual collection.

This was revealed in the mid-year adjustment budget, tabled at a special council meeting last week.

A mid-year adjustment budget is a legally mandated opportunity for municipalities to take stock of the first half of their financial year and make necessary changes.

In terms of revenue, IDM increased its projected budget by R179.2-million to a total of R1.387-billion.

This was largely owing to an increase in water service revenue of R51-million, credited to billing system improvements.

These include the changing of meters from prepaid to conventional systems, new connections and new routes added to the billing cycle.

Elsewhere, the municipality saw a projected increase in interest earned on outstanding debtors of R39-million and an addition of R19.7-million in transfers and subsidies.

Transfers and subsidies, which are mainly grants, is IDM’s largest source of revenue, totalling R762-million.

While welcoming the projected increases, councillors queried the accuracy of the projected interest figures and raised concerns on the actual collection rate.

“We note that interest earned by outstanding debtors has increased from R21-million to R60-million. This is a projection and not actuals and we would like an explanation as to why this jump was so drastic,” said Democratic Alliance (DA) iLembe caucus leader, Krsna Sing.

“It is also very disappointing to note that our collection rate has not improved and is still sitting at 43% against the target projected at 65%. This has huge implications since some projects are also internally funded,” he said.

Projected operating expenditure was increased by R134-million to R1.342-billion.

This increase was mainly as a result of extra contracted services expenditure of R72.6-million.

Councillors raised concerns on this item, which is inclusive of water tanker costs (R25-million) and security services (R38-million).

“We are concerned about the hiring of and repairs of iLembe water tankers which increased from R11-million to R25-million. That’s a substantial amount. We also note that security services have increased from R9.9-million to R38-million. Security companies are bound by contract and we should not have any fluctuation,” said Sing.

The capital budget decreased by R13.3-million for a total of R355.06-million.

In the same meeting, the municipality bade farewell to former chief financial officer Mahendra Chandulal, who had served in the position for over five years.

“The DA believes he turned the finances of the municipality around and had a good grip keeping it afloat.”

Current manager of assets, Emmanuel Ngcobo, has been appointed to act in the role for a period not exceeding three months until a permanent replacement can be found.

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