Activist group Stop City of Cape Town (COCT) wants the City to roll out relief measures amid what it calls the “current state of disaster in South Africa” due to the Covid-19 pandemic.
The measures include: a four-month rates holiday, the permanent scrapping of the water and electricity levies, and a zero increase for all services tariffs for the 2020/21 budget year.
Stop COCT’s Sandra Dickson said the City’s R52.7 billion draft budget was still on the table and could be adjusted to deal with the Covid-19 aftermath.
The City, she said, should return some of the “money and surpluses” it had accumulated through tariffs and levies over many years.
“Many business are expected to close and even more people are expected to lose their jobs.
“The City is urged to take early measures to avoid the mayhem which will result in the City’s accounting system when hundreds of thousands of municipal accounts go into arrears as a result of the inability of residents to pay their utility bills,” said Ms Dickson.
The City had previously found R1.6 billion for drought relief by reworking the budget at short notice, she said.
“In this far worse scenario, the City claims it cannot do anything to give ratepayers relief. This short-sighted view of the City is in no one’s interest.”
Mayoral committee member for finance Ian Nielson said the City was still in its current financial year and there would have to be an adjustments budget to the 2019/20 financial year to accommodate some of the City-mandated Covid-19 requirements.
The draft budget, which will be finalised by June and come into effect by July 1, has a R44 billion operating budget and a R8,7 billion capital budget.
Some R1.5 billion will go to services such as law enforcement, canal and stormwater cleaning, area cleaning in informal settlements, animal carcass removal and beach cleaning, and R4.5 billion will go to safety and security.
Mr Neilson said the City was considering relief proposals.
“The City will first ensure that it secures the delivery of basic services and critical new deliverables to ensure people’s health and safety and then determine what scope remains for further assistance to the public.
“That does not mean that work is not being done currently to see how the City may assist residents in addition to the massive social package of R3 billion; the provision of water free of charge to 40% of the households in Cape Town and other forms of support and rebates already being offered. This is not an easy exercise. It is not a matter of simply allowing payments to stop for a few months. If payments stop, the municipality will stop,” said Mr Neilson.
Ms Dickson said the City could find money by dipping into its R8 billion in bank investments and R2 billion sinking fund and by cutting salaries from management level up and events budgets and expense accounts.
However, Mr Neilson said the City did not have cash simply sitting in a bank account without a purpose.
The City was projecting a total investment amount of R20.3 billion as at the end of March 2020 but, said Mr Neilson, much of it was committed, with R6.6 billion in restricted cash investments, such as unspent grants, contractual bond payments, section-12 funds, housing development and insurance coverage; R5.7 billion for the 2020/21 capital programme of R8.7 billion; and R2.6 billion for 2019/20 capital expenditure.
“This leave a balance of R5.4 billion which is used by the City as working capital. This amount provides a cost coverage ratio of 1.56 months, which is tight when the City has a large variable cash flow within each month,” he said.
The City had already reprioritised budgets to cover immediate Covid-19 costs such as personal protective equipment (PPE), shelters for the homeless and the like, he said. The City was also focused on increased service provision in informal settlements as drafted into law over the past week.
“The City’s programme will be funded by implementing some of the strategies listed by Stop COCT, among others. This will include cutting the salary budget of the City, drawing off from budgets no longer needed due to lockdown (such as travel/events), drawing off budgets not committed no matter the cost element,” he said.
“As far as I am aware, City officials do not have expense accounts. The suggestion to cut salary packages from management level upwards is not in the best interest of the City or its residents. It is these officials who are working around the clock on risk mitigation of the impact of the COVID-19 virus.”
Table View Ratepayers’ Association chairwoman Mandy da Matta said the City should consider scrapping rates increases, cutting its wage bill for councillors and political-appointees by 25% and placing a two-year moratorium on pay hikes four councillors.
“When people do not have money and the economy is non-existent and people need food to survive, is Deputy Mayor Neilson going to be our modern day version of Marie Antoinette, crying ‘Let them eat cake’ when there literally is no bread?”