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Financial crisis hits council

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The Harare City Council has said the move by government to give local authorities countrywide only $32 million dollars instead of the proposed $1,5 billion would make it difficult for local authorities to survive.

Council also expressed concern over the proposed 30%:70% split between labour costs and service delivery by Finance minister, Tendai Biti during his Budget presentation last week.

Mayor Muchadeyi Masunda said Biti’s Budget as far as the local authorities were concerned, was a far cry from what all the local authorities had budgeted for.

“The minister only set aside $32 million which is a far cry from what local authorities expected,” said Masunda. “We should find ways of getting revenue and to us that is a challenge we have to face collectively.”

Masunda said council should come up with measures to ensure the survival of the city but was quick to express deep concern over the water situation in the city.

Finance committee chairperson Ruth Kavhunika during Harare city’s budget presentation castigated the proposed 70%:30% ratio on service delivery and salaries.

“The recommended split of 30 to 70% between labour and service delivery costs somehow misses the point,” said Kavhunika. “A mistaken impression that workers just pick up their salaries and walk away without giving anything in return is unfortunately, widely held,” she said while presenting the 2011 council budget.

“The greater part of salaries and allowances form part of the other expenditure components such as repairs and maintenance,” she said.

During his 2011 Budget presentation, Biti last week recommended that it was government policy that parastatals and local authorities adhered to the 70:30 expenditure ratios with regards to operations, capital expenditure and employment costs.

Biti agreed however that his provision to local authorities fell short of the required amount. He said local authorities would meet the balance from their own resources.

“Out of the total requirements amounting to $1,5 billion by local authorities, I am providing $32 million in order to address water and sewer challenges for local authorities. This includes a provision of $2million for installation of dedicated power lines to water pumping stations.”

“It is, therefore, important that local authorities institute measures to strengthen their revenue generation capacity, including promoting public private partnerships in the provision of various services such as billing, collection, pump maintenance and repair,” he said.

Councils in the country are finding it difficult to operate without adequate assistance from government and these include Kadoma, which city fathers said was surviving on revenue collected from vendors as there was no viable industry.

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