Several court cases have caused the Nairobi government a Sh7 billion shortfall in revenue collection, the Budget Committee has said.
During the adoption of the supplementary estimates for the 2015-2016 financial year on Thursday, committee members said City Hall had collected Sh10 billion from internal sources as at March, against a Sh17 billion target.
The Supplementary Budget has been revised and forecasts revenue and expenditure for the current financial year at Sh29 billion, down from Sh30.8 billion.
“It is this reality that the county may not achieve the revenue targets by end of this financial year hence the need to amend the budget to fit within the intended revenue projections,” the report reads.
In the budget, Sh19.8 billion was meant for recurrent expenditure which includes employee salaries. Only Sh11 billion had been set aside for development.
City Hall had also set aside Sh1.23 billion for debt repayment, garbage collection, development projects in all wards, and to enhance the legislative process of the county government.
Supplementary budgets are prepared to provide for unforeseen changes and to realign the budget to realities experienced in its implementation.
In June 2014, residents of Karen and Lang’ata estates moved to court to stop new higher property rates that were proposed by City Hall. The residents said the rates were imposed following the enactment of the Nairobi City County Finance Act on September 4, 2013 contrary to a March 12, 1999 High Court order.
The 1999 order directed the now-defunct City Council of Nairobi to open a special account where property rates could be pooled and managed, following a dispute.