Who will pay for Tshwane salary increases?

The Organisation Undoing Tax Abuse (OUTA) has written to the City of Tshwane council to object to its decision to increase the salary bill by R665 million despite serious problems with service delivery in Tshwane.
OUTA also demands to know why a political office bearer – instead of the city manager – signed the agreement with the unions.

The City will have to adjust the budget to cater for the increases, which is expected to reduce funds available for service delivery.
Michael Holenstein, OUTA’s Regional Manager for Local Government, expressed dismay over the deal, pointing to serious problems with service delivery by the City of Tshwane.

“Communities in Hammanskraal are struggling to get clean water and waste water treatment plants are polluting rivers and watercourses. The Apies and Hennops rivers are like open sewers, while sewage is flowing into the Rietvlei Dam. Property rates have increased exponentially, and here the council wants to approve staff increases to the tune of R665 million, backdated to July 2017," says Holenstein. “We also want to know why the MMC for Human Capital and Shared Services was allowed to sign an agreement on the salary increases, instead of the city manager, who is the accounting officer for the municipality. This is unlawful."

OUTA's letter is to the Speaker of the Tshwane council, Katlego Mathebe. In the letter, OUTA asks whether public participation processes were followed to give communities an opportunity to discuss the proposed salary increases.

The increase agreement was signed on 18 November 2019 by the MMC for Human Capital and Shared Services Richard Moheta, the Independent Municipal and Allied Trade Union (Imatu) and SA Municipal Workers' Union (Samwu). It backdates increases to July 2017. On 19 November a Special Mayoral Committee meeting resolved to recommend the increases to council. The agreement went to council on 28 November and we understand it was approved.

The increases are a result of the City migrating salary scales from the Patterson scale to the TASK scale. This results in increases of up to 12%. The increase adds R665m to the bill to the end of 2020/21, including the backpayments which will be finalised by July 2020.

This is what the Special Mayoral Committee report to council says about the impact of the increases: "The annual financial implication of the implementation amounts to R138 million for the 2017/18 financial year, R147 million for the 2018/19 financial year, R157 million for for the 2019/20 financial year and R223 million for the 2020/21 financial year subject to escalations. It is important to indicate that no provision has been made in the current budget to cater for the above financial requirements and the impact will have to be factored in the adjustment budget process."

Municipal employees have already had increases this year in line with national agreements.

“How are these increases going to be funded? Does the municipality expect the public to fund this?” asks Holenstein.

He implored council members to block these increases and follow due process to engage with all stakeholders, including the public, before making an irrational decision which may have irreversible complications.

"Everybody, including municipal officials, should be looking at ways of tightening their belts and reducing costs as far as possible. The ratepayers cannot fund institutions that fail to provide basic services to all communities. Tshwane annually racks up unauthorised, irregular, fruitless and wasteful expenditure running into billions of rand. Ratepayers can’t continue paying in the hope that the administration and politicians will one day act in a professional manner," says Holenstein.

The object of local government is to provide democratic and accountable government for local communities. “A municipality should also ensure the provision of services to the community in a sustainable manner whilst promoting social and economic development and a safe and healthy environment. The involvement of communities and community organisations in the matters of local government should be encouraged. A municipality must strive – within its financial and administrative capacity – to achieve all of this,” says Holenstein.

OUTA regards it as irresponsible for any municipality to ignore the input of the community when making decisions which will affect them.

“Local government is made up of three parts: the administration, the councillors and the community. To us it is quite clear that the Tshwane Metropolitan Council does not take the community’s interests seriously. We call on the Tshwane Metro to act responsibly,” says Holenstein.

OUTA will continue to challenge maladministration and corruption in local government.

OUTA’s letter to the City of Tshwane is here.
A copy of the collective agreement is here.
A copy of the Special Mayor Committee report to council is here.