— to get City Hall out of mountain of debt
WITH a debt bill way into the millions, a “new and sensible” approach is needed to lift the Georgetown Mayor and City Council out of the financial dungeon in which it is currently trapped, Town Clerk Royston King said.
Speaking to reporters on the sidelines of the opening ceremony of the 2nd Annual Roundtable for Municipal Financial Management at Tower Suites on Thursday, King said a new approach is needed to address the plethora of financial challenges facing City Hall.
Currently, City Hall rakes in approximately $80M in revenues, but its wage bill surpasses that amount by $32M. The situation, according to King, has to be rationalised.
“It’s either we increase revenue…or we fit our staff structure to suit our budget. You have to have a sensible approach. We have to do something different,” he told reporters.
While it is not a policy of the Council to put workers on the breadline, the town clerk emphasised that the municipality’s economic reality must be taken into serious consideration.
“Our economic reality is that we are not bringing in enough money even to manage the staff that we have, let alone to provide vital municipal services to all local communities including drainage, street-lighting, public health and environmental services, markets, cemeteries and a whole host of other things that we have to do,” he posited.
Hinting at a possible downsizing in the municipality’s workforce, King said all councillors, and municipal officers must pool their ideas to arrive at plausible solutions.
“Perhaps it may entail retrenchment, perhaps it may entail downsizing, I don’t know; but we have to sit down and see what we can do,” he posited
In addition to having monies outstanding for the Guyana Revenue Authority (GRA) and the Guyana Power and Light (GPL) just to name a few, City Hall is still to pay a number of its pensioners, and while King is hopeful that payments will be issued within two weeks, it is unclear from where the money will be sourced, given the council’s financial standing.
“We have over 800 workers. In addition to that, we have a pension list that is growing. It’s about 170 individuals who have retired and who we are carrying, so in addition to the large staff that we have, we also have an increasing pension list, and it is posing a challenge,” the town clerk explained, as he paint a vivid picture of the situation.
The wage bill is just a tip of the iceberg.
“When you look at $80M revenue and a $112M wage bill, right away you get to see the picture. We have not yet mentioned anything about statutory obligations to NIS, PAYE, insurance, we have not said anything about GPL, maintenance of vehicles, equipment, buildings, providing vital municipal services to residents…we have not said anything about that…”
The municipality is currently working out payment plans with GPL and GRA for the millions outstanding. Asked whether the council will turn to government for another bailout, the town clerk said it is not his intention.
“I have never been in favour of approaching central government for bailouts. City Council is autonomous. It has enough provisions within its laws to raise its own revenues,” he said, while noting that all councillors should engage their collective faculty to decide how we go forward.
In November, 2017, King had written Communities Minister Ronald Bulkan, based on a decision made at the council, seeking $475.6M to assist in the payment of outstanding balances to Puran Brothers Disposal Services and Cevons Waste Management, which date back to 2015.
In December, 2017, the government responded positively, providing a bailout to the municipality covering the monies owed the two main garbage contractors.
However, Minister of Communities Ronald Bulkan, in January 2018, said the municipality must not take it as a “given” that it can continue to bank up millions of dollars in debt and then expect to be bailed out by the government.
“It is only because of the special status of Georgetown as the capital city and the conditions existing that the central government was forced to intervene,” Minister Bulkan said.
