OPINION

Cape Town: A reply to the Cape Chamber of Commerce

Ian Neilson says the city has this year decided to reduce staff numbers and hold the salary bill firm.

Response to Chamber of Commerce letter

8 June 2021

The opinion piece by Mr Jacques Moolman of the Cape Chamber of Commerce on the City of Cape Town's 2021/22 budget refers. Mr Moolman makes certain claims regarding the budget public participation process and the City's staff remuneration that need to be corrected.

Mr Moolman takes a swipe at a few marginal issues of service delivery, but fails to focus on the overall achievement of, for example, supplying water to over one million households, even through a severe drought, functioning roads, an electricity distribution system that has a high level of reliability, a law enforcement service that despite its small numbers fills in for the failing SAPS, a fully functioning fire service, and much more.

Mr Moolman finds it "odd" that "only" 2 000 residents commented on the budget. Given the restrictions imposed by Covid-19, this response is perfectly reasonable year-on-year if one bases it on the data and context around public participations in general.

It should also be noted that the statutory 30-day comment process is not the only public process that informs the budget. The budget is informed by engagement and interaction with residents and communities, and operations on the ground, 365 days a year. The City has many dedicated and experienced officials and public representatives who provide input on the budget process, based on feedback they receive from communities and their hands-on experience and knowledge of the context and needs of these communities. One example of this continuous engagement is the City's active subcouncil and ward committee system.

Despite the severe safety constraints placed on the process as a result of Covid-19, the City safely held 68 ward-based focus groups of community representatives on the draft budget across the City. These representatives would then engage more widely on the issues with their communities. Where residents weren't able to attend in person we made use of services such as Skype. We continued to issue a number of media releases throughout the process and placed adverts in newspapers informing residents of the comment period. We also made use of social media, graphics and video, and ensured the budget was available at our libraries.

During 2020, the City was named the most trusted metro in South Africa, for the seventh time in a row (Consulta Citizen Satisfaction Index). It takes hard work and much dedication to earn this trust and we will continue to do our best to serve our residents This is also borne out by our high payment ratio for rates and services, which is unparalleled in South Africa. Our average payment ratio of 97% indicates that most residents are still able to pay their municipal accounts. Those who cannot are encouraged to approach the City for assistance.

In drawing up the budget, the City has kept affordability for its residents top of mind. Service increases were kept to the minimum required to continue delivering services. All income from services is used to provide services. The City does not budget for profit on service charges.

We are very grateful to those residents who are able to pay their municipal accounts, and continue to do so. However, we are also aware that many residents are struggling to make ends meet and pay their bills, and this is why we have introduced a debt write-off initiative to help ease their burden, and also encourage a culture of payment going forward.

The continued focus by the Chamber on the City's staff numbers and salary bill discounts the need to grow some services, such as law enforcement and fire service, where the staff numbers are key to the service.  Despite these needs, the City has this year decided to reduce staff numbers and hold the salary bill firm.

The City's wage bill is well within what is required for a growing city, considering it also provides in-house bulk water and electricity services, as well as cleansing. In many other metros, these services are outsourced to Water Boards and other entities. The majority of a local government's staff costs would be related to having boots on the ground to perform basic and essential services. Since 2010, the City's population has increased by approximately one million people requiring additional services, which requires additional boots on the ground.

The City has cut staff-related expenditure by more than R460 million and made no provision for cost of living increases in the 2021/22 financial year. To achieve this, the City petitioned the Local Government Bargaining Council to not award any salary increases for staff and councillors. Should the Bargaining Council bind us to making such increases, the City's staff numbers will have to be decreased to achieve this commitment.

As regards notch increases, the budget only makes provision for notch increments for staff at T grades 13 and below, in line with conditions of service. There is no provision for notch increases of staff at higher levels.

Cutting down on staff expenditure and ensuring that rates and tariffs are raised to cover only the cost of service provision shows this City is serious about protecting its residents as far as is possible amid the dire national economic state that South Africa and the national government is in, and the impact Covid-19 has had as well.

It is worth noting that the latest Quarterly Labour Force Survey for January to March 2021 showed that employment in Cape Town's formal and informal sectors increased by 20 000 (from 1,364 million to 1,384 million). This is particularly significant at a time when the national economy shed jobs quarter on quarter.  The latest findings also reveal an increase in overall employment (including formal, informal, agricultural, and private household employment) of around 8 000 quarter-on-quarter in Cape Town in the first quarter.

The city also maintained the lowest unemployment rate on the expanded definition of all metros, at 29,6%.

Given that Cape Town and the country are still reeling from the global pandemic, these findings are an indicator that Cape Town is more resilient than most other metros. This is in no small part due to the way in which the metro is run, in a way that balances sustainable financial management with support to those who need it most.

The City would welcome input from the Chamber of Commerce in the formulation of its budget, and has regularly engaged the Chamber over many years.  It would be most welcome if the Chamber were to address which issues of service delivery were most crucial for its members to function, for the City's economy to grow and for the creation of jobs.

By Ian Neilson, Executive Deputy Mayor, City of Cape Town, 8 June 2021