Broke SPTC can't pay staff salaries

ONALENNA KELEBEILE
Staff Writer | Thursday June 6, 2013 00:00

The local authority was already faced with an over-expenditure of P6.629, 527 by the end of last year, meaning that it has to rely on alternative sources of funding to continue providing services to the community.  SPTC chief finance and development planning officer Billyboy Siyabatho told Mmegi that the situation forced the council early this year to request for additional funding for utilities and staff salaries for February and March.  They were granted P15 million, of which P10 million was spent on salaries for the two months.

He explained that they overspent on utility bills, fuel and lubricants, security services, staff travel, subsistence allowances as well as overtime. The council also saw under-collection of P4.5 million on rates and service levies.The fact that council did not make any interest on investment this year due to cash-flow problems also added to its serious financial woes. Siyabatho revealed that they had planned to generate revenue through licence fees, but the new policy does not allow for annual renewal of licences. This meant that they collected a much smaller amount than they had anticipated.'I do not foresee the ministry bailing us out again. If we do not implement the privatisation masterplan, then we are headed for a disaster. Each employee must strive to reduce costs in his/her place of operation. If we do not change the mindset, then the council's financial situation is far from over,' he warned.

Siyabatho said they have since set up a panel to review the current budget with a view to re-prioritise the council's immediate needs. He said this cannot become a success in one financial year and acknowledged that the process of reviewing the budget is difficult. He noted that the problem of over-expenditure started 2007, saying it was better in previous years because the general fund, which has since dried up, was available to absorb the expenses. During the 2011/2012 financial year the general fund had a balance of negative P1 million and the negativity is anticipated to balloon to P7 million in the current financial year.

'The only solution is for us to do with the little we have and work towards recovering from the negative general fund balance. We have realised that some of these things could have been done better if every employee was alive to the fact that the council has no money,' he said.The council is currently implementing a new revenue collection strategy as well as the cost reduction strategy.He explained that through the privatisation masterplan the council intends to outsource its facilities that are expensive to run to the community to and cited the stadium and abattoir. Three day care centres have already been privatised. 'We are currently looking at some of our services that we have been providing for free so that we can charge a certain fee, and review those that we have been charging a minimal fee for to increase where there is need to do so,' he said.  This means that the community is likely to pay for refuse collection.The council has already stopped collecting refuse from business centres.The council is also reviewing cemetery fees and community hall rentals.

Siyabatho further said they also plan to dispose of all its old plants and equipment, and not replace them but instead keep those that are used on a daily basis because they are expensive to maintain.'It is not easy but this is where we want to drive this council,' he said. He revealed that the budget for utility bills this financial year was P4.7 million. He said a lot of over-expenditure emanated from underground water leakages. A team has already been set up to look at addressing costs on water bills. The council is working on introducing the PABX system where every employee will account for each and every phone call. The local authority will in the long run introduce a system whereby lights will automatically switch off if left for a long time.  'This is very expensive but we can only manage after council recovers from these financial challenges,'' he said.