Joburg City tables bleak annual report
The City of Joburg tabled the annual report for 2014/15, the financial year that ended on June 30 last year - and the bad news far outweighs the good.
|||Johannesburg - The City of Johannesburg wrote off R10 billion in bad debt, spent R6 million on a Madiba statue in another country, spent more on bank charges and overseas travel than free electricity for indigents, and desludged 55 000 pit toilets in a single year.
Recently, the City of Joburg tabled the annual report for 2014/15, the financial year that ended on June 30 last year.
This is some of what’s in the report.
The full report is on the city’s website at www.joburg.org.za and public comment is open until March 4.
Finances in 2014/15
Revenue for the year was R41.6bn.
Joburg gets about 21 percent of its funds from national government, 52 percent from selling services like water and electricity and 18 percent from property rates.
The capital expenditure budget was R10.8bn (R3.3bn was borrowed), and 94 percent of this was spent, mainly on transport developments and the Corridors of Freedom projects.
By the end of the financial year, there was a surplus of R3.9bn.
Paying for it, or not
Residents were billed R7 622 758 for property rates (5.6 percent up on the R7 215 938 billed the previous year).
Residents were billed R13 043 690 for the sale of electricity (5.7 percent up on the R12 339 075 billed the previous year).
Residents were billed R4 258 996 for the sale of water (7.3 percent up on the R3 966 998 billed the previous year).
The city spent R12 562 745 on bulk purchases of electricity and water, which is 6.5 percent up on the bill of R11 792 735 the previous year.
Joburg collected 92 percent of all amounts billed (the target was 94 percent).
Joburg brought outstanding consumer debt down to R4.9bn by writing off R107bn in irrecoverable debt; the previous year the city wrote off R15bn in bad debt.
Debtors include 39 Joburg councillors who together had bills of R635 000 owed for more than 90 days.
Joburg vs Sars
City Power is claiming consumer debt impairment at 100 percent as a tax deduction, but Sars has approved a deduction of only 25 percent. City Power is appealing this decision.
Watchdog
Joburg struggled to find a chief financial officer so in December 2011, hired KPMG for nine months, then for another six months; this cost R9m in irregular expenditure. Joburg now has a CFO.
Insolvent
Pikitup and the Joburg Metro Bus Company were both technically insolvent by the end of the financial year.
Irregular expenditure
This included R10.6m on a security company in a tender process that didn’t comply with procedures.
KRB law firm was hired although two of its directors had overdue municipal accounts at the time.
General expenses
The R4.5bn in “general expenses” included:
R81.4m in bank charges for the year, up from R74m the year before (not finance charges).
R49m to pay the auditors.
R23m to provide free electricity for indigents (up from R14.6m).
R18m in local travel and R27m in overseas travel.
R195m for printing and stationery.
R410m to guard municipal property.
Ombud office
Some of the costs of setting up the Ombud’s office were logged as irregular expenditure, because officials failed to plan the procurement properly.
This included R16m in ICT infrastructure.
Joburg also spent R141 000 on antique furniture for the office.
Supply chain deviations
Permitted deviations from supply chain procedures (usually when there is only one service provider so competitive quotes aren’t possible) included buying frogs, tigers and cheetahs for the zoo, emergency stormwater repairs and emergency substation repairs.
There was a shortened tender period due to “stringent time frames” when the city paid R5.9m for Koketso Growth to design, manufacture and erect a bronze statue of Nelson Mandela in Ramallah in Palestine.
Electricity
More than 60 percent of households with connections are on prepaid meters; three years ago more than 60 percent were on conventional meters.
Joburg spent more than R787m on electricity meters that year.
More than 2 200 households that hadn’t been on the grid were electrified and more than 4’700 public lights were installed.
Electricity and water losses
About 19 percent of electricity was lost, worth about R2.3bn in lost revenue. This was made up of non-technical losses (theft, bypassing or damaging meters, billing errors or not having meters) of about R1.5bn and technical losses (power lost during transmission) of about R841m. The auditor-general’s report lists different figures, listing the total electricity losses as worth R2.6bn or 29 percent of electricity purchased. About 22 percent of the water bought was lost, through leaks, theft or meter problems, costing R776m. This was better than the previous year when 29 percent was lost, costing R942m.
Refuse removal
Pikitup spent R17m on 240-litre bins; 10 220 bins were delivered, mostly in Kraaifontein, Cosmo City and Randburg.
Informal settlements
Pikitup provided services at 164 informal settlements.
55 000 ventilated improved pit (VIP) toilets were desludged.
45 000 chemical toilets were serviced twice a week.
101 million litres of water were transported to stationary tanks.
About 45 percent of informal settlement households have sanitation access.
About 94 percent of informal settlement households have basic water access.
Transport
The Rea Vaya buses carried an average of 37 579 passengers each working day, below the target of 50 000 a day but up from the baseline of 30 000 a day.
About 675km of roads were resurfaced, well above the target of 526km, but only about 12km of the planned 21km of gravel roads were upgraded to tar.
Parks
19 906 trees were planted during 2014/15.
1 707 hectares of alien vegetation were cleared.
There are more than 2 000 parks in Joburg and 3.7 million trees in the streets.
More than 527 000 people visited the zoo, to see more than 3 500 specimens.
Soccer City
Joburg leases Soccer City stadium from the Department of Public Works for R1 a year, on a 99-year lease.
Fires
1 115 fire fighters, down from 1 503 the year before.
9 547 fires, the same as the previous year.
102 fire engines, up from 100 the previous year.
90 fire engines were off the road, compared to 13 the previous year.
JMPD
2 285 serious accidents in Joburg in 2014/15, down from 2 998 the year before.
12 978 priority by-law infringements recorded, down from 45 958 the year before.
796 JMPD officers on duty on the average day, about a third of those on duty the year before.
99 136 learner’s licence and 85 650 driving licence applications, less than in any of the previous four years.
175 903 driving licences issued, less than any of the previous five years.
786 440 vehicles registered, more than in any of the previous five years.
1 377 046 vehicles licensed, less than in four of the previous five years.
25 593 police clearances issued, more than twice as many as the previous year.
Fines
Fines brought in R586m, less than half the amount expected and significantly down from the R1bn of the previous year. The report said this was due to a decrease in traffic offences.
Goodbye
There were 12 706 people buried and 2 284 were cremated. Joburg needs another 1 500ha for more cemeteries.
louise.flanagan@inl.co.za
The Star