/ 5 April 2024

Msunduzi set to implement drastic cost containment measures

Msunduzi City Hall. Photo supplied

Msunduzi’s acting municipal manager, Sandile Hlela, says he will drive the implementation of sweeping cost containment measures that had been previously approved but not acted on.

Hlela issued a memorandum on Wednesday directing business units to adhere to the strict austerity measures needed to stabilise the city’s finances.

Without elaborating on the current financial situation, Hlela’s directive included the possibility that the municipality may have to consider fundraising and even selling its debtor’s book to stabilise its finances.

Other measures include limiting overtime work, barring unauthorised employees from taking municipal vehicles home, and reducing or eliminating the use of consultants through in-sourcing.

“The acting municipal manager must take decisive measures and write a report to the council to stop all current and future sponsorships which the municipality is unable to sustain financially. Stop all council-funded projects for the next 12 months unless it is a compliance or emergency issue. Reduce security costs by deploying internal security in all municipal buildings,” stated the memorandum.

The memorandum sought to stop catering for all council meetings and the limiting of travel and subsistence allowances for all employees and councillors.

“Drastic” internal processes would be implemented for debt collection instead of relying on external service providers for debt collection, and Operation Qoqimali will be reviewed.

The IFP in Msunduzi said this could be a sign that the municipality is on its knees and questioned the work of the administrators who have been in and out of the city for about five years now.

uMgungundlovu District chairperson Thinasonke Ntombela said overtime abuse and other abuses were not new and were not punished.

“It boils down to one thing, lack of consequence management. As for selling the city’s debt book, we will be shooting ourselves in the foot. This transaction will entail selling every unpaid account to a private company which will pay a pittance and make itself profits by collecting from debtors for its own bank account,” said Ntombela.

The DA lambasted the city for allowing the situation to deteriorate by not enforcing existing policies.

Msunduzi caucus leader Ross Strachan said the cost containment policy has been in place but was undermined.

“Why has this policy never been implemented? Why have we made decisions as a council such as sponsorships, events hosting, and wasteful expenditure — all of which were against this policy?

“Why have the ministerial representatives never ratified those decisions? Heads must roll,” said Strachan.

Msunduzi Mayor Mzimkhulu Thebolla said the cost containment policy was not new, but that Hlela was reminding officials and councillors about it.

“The memo was just a reminder that this is the policy in place which seeks to help us with our recovery plan. We need to implement and adhere to this policy but to answer your question, no project will be stopped if it is budgeted for. What the council will not do is to take on new projects that are not budgeted for. No sponsorships or events will be undertaken that the city cannot afford,” said Thebolla.

City spokesperson Ntobeko Mkhize said the city subscribes to the principle of transparency and accountability and, as a result, communicated constantly with all stakeholders of Msunduzi.

“We confirm that the municipality has an existing cost containment strategy and policy that was adopted by council,” she said.

“The strategy is in line with the guidelines from the Treasury and seeks to eliminate any wastage of municipal resources on non-critical and non-service delivery activities and to further enhance service delivery.

“The residents of Msunduzi are assured that the municipality remains focused on providing quality services to all and that cost containment measures remain in place to prudently manage the expenditure,” added Mkhize.

The Pietermaritzburg and Midlands Chamber of Business (PMCB) said the “biggest hole” in the city’s finances came from trading losses and the largest contributor to these losses is the theft of electricity and water.

PMCB chief executive Melanie Veness said: “We have a very expensive finance system which should be flagging accounts that show no changes in the meter readings. In addition, I believe that a few years ago a report was commissioned listing over 20 000 bypassed meters in the city, non-payment going back as far as 2012.”

Veness said the the most logical approach would be to stop the theft and back-charge all those with by-passed electricity meters.

“I’m not sure what is intended in terms of fundraising, but there are revenue streams that used to add to the city’s coffers that should be pursued.

“Raising revenue through traffic fines for example — fines imposed for parking and stopping illegally and for other traffic violations in town could net a fortune.

“Introducing an appropriate parking system that nets revenue for council. Earning revenue from our forests. We used to make good income from forestry. In addition, significant funding has been lost to corruption. Recovering these monies should be a priority. Finally, with our finances being what they are, we have no business sponsoring soccer teams or anyone else for that matter — all sponsorships should be stopped,” said Veness.

This article first appeared in The Witness.