City Hall 2014 budget…Council projects deficit in excess of $244M

Mar 04, 2014 News

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– says citizens will remain unhappy if Govt. doesn’t assist

By Zena Henry
If the government does not step in financially, the Mayor and City Council (M&CC) will not be able to return Georgetown to being referred to as the “Garden City”.
And without the necessary subventions, fiscal transfers, policy adherence and other forms of financial assistance to the municipal body, “it means that citizens will be further disgruntled…” because this year’s budget will have little effect on the various difficulties facing the M&CC; the semi-autonomous body tasked with managing the affairs of the capital city.
This was emphasized by chairman of the Council’s Finance Committee, Junior Garrett, who for the second time presented the 2014 budget -which on this occasion was approved by Councilors.

Garrett explained that there are several areas where the Council is unable to effectively collect revenue; there are laws that exist against the evolution of society, the slothfulness in which policies are being followed by certain government ministries and the inability of some Council departments to generate revenue surpassing their expenditures.
As a result, the Council projects a deficit of over $244M; which simply translates to expenses being in excess of $244M in relation to the revenue it is expected to generate.
The M&CC expects that for 2014 it will rake in some $2,055,467,116 while it is expected to spend over $2.3 billion. The City Engineer’s Department has the largest deficit with $619M. That department is expected to generate $37M, but will spend over $656M in the execution of duties.
The Town Clerk’s Department will bring in $14M, but will spend over $328M, with an adverse variance of over $314. The Constabulary will rake in $4M (in littering fines) but will spend over $370M; an adverse variance of $366M. The City Treasury’s Department will generate over $1.6 billion, and will spend over $120M giving a positive balance of close to $1.5 billion. The Public Health Department is expected to rake in over $58M, while it will spend $219M – a deficit of $161M.
The Solid Waste (Garbage) Department is expected to generate some $3M, while it is expected to spend over $386M, giving another negative variance to the budget. Markets around the city are projected to rake in over $295M, and will spend $218M giving a positive variance of $77M.
The major areas of expenditure, apart from core services are wages and salaries which amount to 61 percent of the Council’s revenue, Garrett explained.
The monthly light bill is over $20M which includes $15M for street lights, $3.3M for pumps and over $2M for buildings controlled by City Hall. It is not the intention for every department to make a profit or recover the cash that is spent, Garrett pointed out, since payments of rates and taxes are paid for the provision of services. However, “the Council is limited in the provision of services because of financial resources. We cannot provide the necessary services we want unless we have increased finances”.
He emphasized that citizens cannot be pressured any further for increases in rates and taxes. He pointed out that the Council over the years, benefited from government intervention and “it is expected that the government will increase its intervention to have a better city.” “We are calling on the government therefore to assist us in making the city a better one by increasing our finances…”
The Chairman requested for the Council to have VAT exemptions, which he projects will return $160M to the Council. It was asked also for a Municipal Judge who will speed up the prosecuting process, and also be able to deal with matters involving large sums of money over $30,000 and $60,000 owed to the Council.
It was mentioned by Town Clerk Carol Sooba that some 20 to 30 property documents have been coming to her officer on a monthly basis for re-evaluation, while discussions are ongoing to address the matter. This has however been a salient area of concern since, according to the Council, huge sums of money are expected to be collected if the property re-evaluation process could be regularized.
It was earlier mentioned by the Finance Chairman that more efforts have to be put into monitoring properties moving from personal to commercial use. This process, he had also mentioned, involved the Finance and the Housing Ministry.
Mayor Hamilton Green congratulated those involved in the 2014 budget – for bringing it as close as possible to the actualities of City Hall. He stated however that much more is needed to be revealed in order to put the budget into context. He pointed out that this is related to the part the government is playing by interfering in their work and withholding items such as fiscal transfers to the Council.
He went on to mention the “negative display” of the “unwanted” Town Clerk, who walked out of the budget presentation when the Mayor alluded to her arbitrary use of Council’s money.  He urged that the budget will fail if she continues to disobey and ignore the recommendations of Council.
The previous budget which was read last November was rejected by the majority of City Councilors who believed it was “unrealistic, lacked depth and failed to express the difficulties of the Council.” It had the same projected revenue, but had no deficit, meaning that the Council, despite the challenges, would have met its goals.
Meanwhile, Minister within the Ministry of Local Government Norman Whittaker has reacted negatively to the Council’s budget. At a People’s Progressive Party (PPP) meeting yesterday, the Minister accused the Council of “plans to spend almost 70% of the citizens’ Rates and Taxes for 2014 on themselves and staff with a current liability of 1.3 Billion dollars including debts to GPL, NIS, and GRA.”
The Minster called the budget, “an exercise of adhocracy.”
“The Council in its 2014 budget proposal plans to expend 2.302 billion dollars out of anticipated revenue in inflow of $2.505 Billion revenue. In other words the council plans to spend almost 250 million dollars more than what it plans to receive. There is no explanation as to how the Council will finance this deficit.”
The Minister said after carefully examining the budget, he had noticed that employment cost and employment overheads stand at 56 percent of total anticipated inflow, and a mere 28 percent of this inflow is set aside for capital works, while overtime continues to be featured to be high in the budget, the budgeted staff strength which in the Ministry’s 2013 review was already high, increased by 4% for 2014, i.e., the Council plans to add more numbers to the already underutilized staff. Provisions are made for increases of Councilors’ stipends and allowances as well as gratuity for a poorly performing Council.”
The Mayor and City Council has however mentioned repeatedly that it is a labour-intensive organization, with many of the core services that are provided not being linked to mechanization. Public Relations Officer Royston King told Kaieteur News that the services City Hall provides are linked to the wages and salaries that are paid, since the majority of tasks are performed manually.

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