MOSSEL BAY NEWS - The first open council meeting of the year took place today.

Mossel Bay Advertiser is attending the meeting. 

Mayor Dirk Kotzé delivered his state of the municipality address. Here are five things to know:

1. Employee costs and budget constraints – The municipality spends 25% of its annual budget on employee costs, below the national norm of 35%

2. Liquidity factors and electricity deficit – Incorrect tariff setting, budget funding shortages, rising operating expenses (partly due to Eskom’s loadshedding) and energy losses have negatively impacted municipal liquidity. The municipality faces a R33.5 million deficit due to rising electricity purchase costs not being matched by revenue.

3. Energy losses and theft – Electricity losses increased by 3% year-on-year, reaching 17.5% (July-January). To combat theft and tampering, the municipality will intensify prevention measures, including meter audits and inspections across all wards.

4. Decrease in grant funding – The municipality receives R60 million less from the Equitable Share (a portion of revenue that is allocated to national, provincial, and local governments in South Africa) grant due to outdated population statistics. Additionally, provincial grants were reduced by R27 million, impacting financial stability.

5. Declining utility collection rate – The payment collection rate dropped from 99% (pre-COVID) to 94.8%, causing significant revenue losses. Each 1% shortfall equals R12.8 million in lost revenue. The municipality is strengthening credit management and electronic billing to improve collection rates. 

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