The City of Johannesburg has approved the more than R90bn adjustment budget for the 2025/2026 financial year.
This comes after a delay that saw the council request an extension from the provincial government, citing issues of “not enough time to go through it”.
While mayor Dada Morero has praised the city for being financially resilient, council documents reveal that revenue collection from key entities, such as City Power and Johannesburg Water, has underperformed.
This has forced the city to scale down spending with downwards adjustments of about R767m for City Power, R575m for Johannesburg Water and R98.5m for Pikitup.
“The intention of the adjustment budget was to adjust for the shortfalls that may be there, to ensure that we also prioritise specific and particular projects to be delivered between now and the end of the financial year, which is June this year,” he said while looking forward to passing the budget for 2026/2027 in May.
“Yes, there are constraints, there are challenges here and there, but we remain financially resilient, and we are taking the city forward,” Morero added.
Other key aspects of the adjustment budget that led to the delay were the R1.4bn rise in employee-related costs, mainly due to the politically facilitated agreement (PFA).
The PFA is a negotiated settlement designed to address long-standing wage disparities, salary grading issues and backpay.
The council has raised a concern about this agreement, saying it potentially poses a risk for the city’s service delivery capacity.
“The PFA allocations are shifting funds from operational expenditure to employee-related expenses. This is moving operational funds away from service delivery to employee-related costs, and it might have an impact on service delivery in future financial years,” said the council.
The city has also increased its provision for debt impairment by R1.1bn, which means that a growing portion of billed revenue may not be recoverable due to ongoing challenges with payment collection.
City Power debt impairment increased by R767.2m, Johannesburg Water increased by R95.3m, and Pikitup increased by R98.5m; meanwhile, Joburg City Parks and Zoo increased by R94.9m.
Council documents revealed that debt impairment was allowed in line with the revenue collection initiatives and mid-year performance assessments.
Morero said there have been some improvements in the collection rates, though council documents reveal collection levels are not meeting budget targets.
“There are also some improvements that we are beginning to see in how we deploy the resources of the city. We are also working on a programme to raise capital on the balance sheet that will be focused solely and mainly on our water and sewer infrastructure so that we can deal with the challenges we have had, especially in leaks on our part,” he said.
Council documents also revealed that the city has spent about R3.9bn more than it planned by January 2026.
The municipality continues to grapple with historic debt owed to it by residents and businesses, which has accumulated over the years and now stands at R69bn.
Sowetan
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