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THE Bulawayo City Council is trading on a financial hang cliff with figures showing that in the first two months of the year more than 90 percent of the revenue collected went towards salaries and other non-service delivery costs,
Sunday News can reveal.
According to financial statistics seen by Sunday News, in February, BCC collected $6 149 597 of which the total expenditures for the month are standing at $5 788 248.
According to an expenditure disbursement chart, salaries and allowances gobbled $2 963 346, $734 916 was paid towards salary creditors, $754 969 for taxes, $1 230 693 was paid to trade creditors while financial institutions got $43 127 in loan reimbursements.
Of the expenditure just $61 197 was used for utilities which is the only service delivery related use. The figures means the local authority directed $5 727 051 (93 percent) towards non-service delivery related costs. The situation is almost similar for the month of January where the local authority collected $5 260 648. Of the amount,
$2 270 038 was paid to salaries and allowances, salary creditors; $769 015, taxes; $636 448, trade creditors; $1 778 769 and financial institutions; $106 664.
Again utilities during this month just got $94 932.
According to the figures the local authority owes various creditors $118 631 683 while they are owed $122 176 355, with domestic users owing $67 136 873, industry and commerce; $50 873 064 and the Government owes $4 166 418.
The latest revelations incensed Local Government, Public Works and National Housing Minister Saviour Kasukuwere who said the Government will not sit and watch when local authorities are allegedly abusing rate payers’ money for non-core services.
The Government had stipulated that of the money collected by local authorities, 70 percent must go towards service delivery while 30 percent must go towards salaries.
“The reason that ratio was put in place is that we ensure that councillors direct most of their revenue towards service delivery. If you find a local authority directing a huge chunk of their revenue towards their perks then there is a problem which we will not sit back and watch,” said Minister Kasukuwere.
The city’s financial director, Mr Kimpton Ndimande, confirmed that the local authority was in a financial crisis as they were collecting way below their projected figure but said it was not necessarily true that most of the money collected was going towards meeting salaries.
He, however, confirmed that BCC was not abiding to the Government stipulated ratio, adding that the 90 percent figure on non-service delivery were some staff costs that were directly related to service delivery.
“There are two issues, the first being that the Government still has not approved our budget, we are constantly in touch with them because it is difficult operating without an approved budget. Secondly on the issue of that ratio, I can confirm that we are not exactly on that 70 percent as to 30 percent, instead our salaries are taking about 55 percent of our monthly revenue.
“What you have to note is that some of these salaries are directly linked to service delivery, for example when you purchase an ambulance you also have to have a driver and the attendant. Hence according to our figures of that 55 percent, 37 percent goes to salaries directly linked with services and the remaining 18 percent goes to overhead costs, which is mainly the salaries for our directors,” said Mr Ndimande.
He said there was a need for residents to honour their debts because this would go a long way in boosting revenue and ensuring that service delivery was not affected.
“There is no denying that the local authority is in a crisis. We are collecting monthly revenue of between $5,2 million and $6,1 million. It puts us in a difficult position noting that we need money for services therefore if we fail to get that revenue service delivery will obviously suffer. I must also point out that consumers owe us over $100 million, if we could get a fraction of this figure or all of it I am sure that even service delivery will greatly improve,” said Mr Ndimande.
Commenting on the city’s financial position, the Mayor, Councillor Martin Moyo also confirmed that the city was in a crisis saying it was unfortunate that residents, industry and Government departments were lagging behind in paying their debts, which had seen their indebtedness to the local authority ballooning.
He said it was important to note that the council was a service provider and in most cases they had to incur a cost in order to carry out that service hence the need for people to support them through the paying of their debts.
“It is unfortunate that people are usually the first to criticise us when they feel we arelagging behind in terms of service delivery but what they tend to forget is that in order for us to give them satisfactory services we need financial injection and the only way we can raise this money is through them paying their rates and rentals.
“Honestly if people are failing to pay off what they owe it would be difficult for us to provide satisfactory services. If we manage to get everything that is owed to us we will go a long way in addressing some areas that have been overlooked because of lack of funds,” said Clr Moyo.
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