For most CFOs, revenue risk is framed in familiar terms: macroeconomic conditions, tariff decisions, credit control and collection strategies. Yet, as Kevin Jacoby, CFO of the City of Cape Town, makes clear, there is a far more operational but equally powerful lever at play: service delivery quality.
During a recent CFO Summit in Cape Town, City of Cape Town CFO Kevin Jacoby emphasised the importance of always providing shareholder value, saying the residents of the City were shareholders of the city.
He was co-hosting a panel titled A masterclass in sticking to unpopular decisions with Zaf Mahomed, CFO at Oceana Group.
Referring to citizens’ monthly rates and service charges as their “investments”, Kevin noted that residents had confidence in how those funds are used.
In Cape Town, this link is treated as a core financial risk. The City closely monitors service delivery requests and applies predictive intelligence to anticipate where ratepayer standoffs may emerge.
“You are the shareholders. My job, every single day, is about shareholder confidence in the City of Cape Town. It’s very difficult to take hard‑earned money and put it into the coffers of a political animal, trusting that the administration is looking after those rands and cents and turning them around more than once,” he told attendees.
Issues like a sinkhole or unresolved service complaints are seen not just as operational incidents but leading indicators of potential revenue erosion. Early community engagement is, in effect, a form of proactive credit risk management.
“If, for example, there’s a sinkhole in Milnerton, we can quickly see the impact in the form of withheld rates and payments – and then we proactively engage with those communities.”
For a CFO, the implications are significant. Poor service from any directorate, even those outside the finance portfolio, can degrade payment ratios and undermine funded multi‑year financial plans. Conversely, strong, visible service reinforces the legitimacy of the bill and stabilises cash flows.
“I monitor all service delivery requests. We've become very clever about that. It’s about stakeholder involvement, giving absolute commitment that matters will be resolved.”
Kevin’s approach to the capital programme reinforces this alignment. In an R87 billion organisation with a R14 billion capital budget, Kevin insists that assets included in the budget must be delivered in reality, not just on paper.
“My job is to make sure that whatever comes into that capital budget is delivered at the end of the day, because all accountants know there’s a depreciation cost acceptance built into that financial model. I can’t afford to look you in the face and say you paid for that asset, but we haven’t delivered it yet. My conscience would just prick me too hard,” he concluded.
