Joburg Council Speech: June Revenue Collection Figures

Note to editors: The following speech was delivered by Patrick Atkinson, DA Shadow MMC of Finance in the City of Johannesburg, during a council sitting today.

Madam Speaker,

The City's monthly revenue collection figures reported to council in Item 20 of the agenda show  improvement for the month of June, but unfortunately the overall picture for the last 12 months is pretty bleak, with a reported revenue collection rate of 89,5%.

This figure is nearly 4% below the City's budgeted collection rate and will represent a revenue shortfall of some R700 million to R800 million for the year. The result of this will be further service delivery cutbacks in the City and less money to efficiently provide the services that the City is required to offer its residents. This has led to a slashing of the health budget and the general degradation in the City's infrastructure, because there is not enough cash to spend on adequate repairs and maintenance as stipulated in National Treasury Guidelines.

It may be worthwhile for council to note that the disappointing 12 month collection rate has taken place during a period where there has been a huge focus on improving collections through the Revenue Step Change programme initiated in November last year.  These poor collection figures are also against a backdrop of a higher provision for bad debts as well as debt impairment being constantly over budget at City Power and Johannesburg Water over the past year.

The reported revenue collection figures coupled with the increased provision for bad debt do not create a positive picture of the City's Finances. I know that MMC Makhubo understands the very significant improvements needed to be made in collecting revenue and that is why he and the City Manager launched the Revenue Step Change programme last year. Unfortunately they still have a long way to go, and this was evidenced by the thousands of people who turned out on the 18 August at the DA Billing Day at Marks Park.

Madam Speaker, the very core of the City's problem with not collecting its budgeted revenue is the Billing Crisis that the City continues to face. I know the MMC and the Mayor do not like to admit that we are still faced with a billing crisis but if the DA calls a Billing Day on one day in one small part of the City and we get nearly 5000 participants with about 6000 to 7000 queries, then that really is the tip of the iceberg of a continued crisis.  Many of us in the DA had begun to believe the City's assertions that most of the outstanding queries had been resolved, and couldn't understand why we continued to be flooded with billing problems from our residents.

This disconnection between what the MMC and the City were saying, and the experiences of all our residents, was why the DA held the Billing Day in the first place and to be frank Madam Speaker, we too were astounded by the turnout of our residents. The simple fact remains that if only a few hundred people turned out on Billing Day, the MMC would not be explaining himself on Radio 702 and SAFM the next week. The numbers of residents who turned up on DA Billing Day, desperate because of poor or in many cases non-existent service from the City's Revenue Department, speak far more eloquently of the facts of the Billing Crisis than anything else that we as politicians can say.

So in short MMC, the disappointing revenue collection figures that we see in Item 20 and the crippling effect that this has on the City's Finances will not be resolved  until the billing problems that we face are a thing of the past. MMC, with the millions of Rand your department is spending on accountants through the KPMG contract there is simply no excuse that the reason why many queries are outstanding is because they are complex. You have the resources at hand, use them.

Madam Speaker next week the DA will be presenting the City with the thousands of queries we received on Billing Day. For the last 10 days the DA has been meticulously capturing all the information gathered, as a service to our residents and as a genuine attempt by the DA to assist the City and this administration in helping to bring an end to the Billing Crisis. I would suggest that the MMC and his Finance team properly interrogate this information we give them to understand the extent of the problems they and the residents of Johannesburg still face in sorting out the Billing Crisis.

In short, Madam Speaker if this ANC administration follows the logic of that incredibly insensitive ANC statement that was put out on Billing Day, telling residents that they were wasting their time recording their queries with the DA, and that their queries would be given no special attention, then all the ANC would be doing would be to confirm the suspicion among many residents that this ANC administration cares nothing for its residents and that its slogan of Batho Pele  are yet more empty words.

In conclusion Madam Speaker, the City's revenue collection figures and the City's financial health will not improve until all residents can be properly billed and all billing queries can be efficiently and speedily resolved. The DA is providing this administration with valuable data collected from the public as our contribution to resolving this crisis. What you do with it MMC will show how serious you are in getting the Billing Crisis resolved. We suggest you use it in the best interests of the citizens of Johannesburg.

Issued by the DA Johannesburg, August 30 2012

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