5 months ago
95
Troubled Emfuleni municipality’s revised financial recovery plan has laid bare the extent of problems the council has with National Treasury giving it an ultimatum to implement the proposals or face intervention.
The plan, which was published on the municipality’s website on Thursday, states that it was developed in 2018 but “did not achieve the desired outcome of placing it in an overall viable state”.
“Emfuleni is in the cycle of amplified consequences of financial loss and infrastructure failure, and without the necessary financial resources targeted at the fundamentals, it is impossible to recover towards a sustainable municipality,” reads the document in part.
“Hence, a resolution was taken under Section 144(1) of the MFMA (Municipal Finance Management Act) to review and update the FRP (financial recovery plan). ELM (Emfuleni) will have to implement the reviewed FRP in a phased approach, focusing on quick wins (rescue phase), leading into improved service delivery (stabilisation phase) and ultimately regaining community trust and deliver their mandated service uninterrupted on an ongoing basis and reaching the final phase of the FRP, sustainability.
“If ELM cannot or does not approve legislative measures, including a budget or revenue-raising measures to give effect to the FRP, the provincial government may dissolve the municipal council, and if the provincial executive cannot or does not adequately exercise the powers and functions, as provided for in the mandatory intervention to ensure the success of the provincial intervention, these circumstances will require a National Intervention as per Section 139(7) of the Constitution.”
The plan states how the municipality, which had its bank accounts attached by power utility Eskom last week, has been battling to collect revenue.
MMC for finance Hassan Mako said they would be heading to court on an urgent basis to challenge Eskom’s move.
Emfuleni’s Eskom debt was R8bn, the power utility said last week, adding that due to failure to adhere to some obligations, the municipality had been removed from the debt relief programme.
But Mako on Sunday said they had not been informed about the move, saying the municipality would write to the treasury to find out why they were not informed of this development.
“I can’t really say where we didn’t meet the obligations and where we did because there are some challenges that we are experiencing but we did not receive any sort of communication from National Treasury on us being kicked out of the programme and [that] there [are] breaches."
He said due to bank accounts being attached by Eskom, Emfuleni was unable to transact.
“Many findings and functions have already been affected and this is why we are going to court on an urgent basis on Tuesday to address this so that this matter doesn’t affect people on the ground. We are making sure that we engage the political structures to assist like the premier of Gauteng to bring a solution to this matter quickly.”
According to the plan, Emfuleni's collection rates are below the norm.
“It should be noted that these rates are only on the supply of services after distribution losses of water (61.9%) and electricity (22.2%), which means for each R1 spent on bulk water, only 32c can be billed and only 77% are collected (24.64c), which is unsustainable.
“Non-billing of large areas, around 100,000 households not metered and billed at a flat rate of 30kl water monthly as indicated by the CFO. Low collection rate on refuse removal 49.3% as at 30 May 2024) as the community stopped paying as the services are not performed adequately."
Mako said: “This [low collection rate] is because of many factors like unemployment. We have the highest unemployment rate in the region and it makes it difficult for residents to pay for water and other services.
“We are working together with the Cogta (department of co-operative governance and traditional affairs) and we are looking at a special-purpose programme that can look at lowering the water utility debt and address some of the challenges that we are faced with.”
The plan further revealed that the municipality was spending more than it had budgeted for on labour relations matters.
“The municipality has overspent on the labour relations budget by R18.382,709 (budget: R3485,000, expenditure: R 21.867,709) and overspent on legal services budget by R11.946,465 (budget: R 4.960,000, expenditure: R16.906,465) for the 2023/24 financial year.
Mako said: “...It would be really frustrating and short-sighted for us to agree to everything because someone has put a gun to our head we would be basically saying that as a municipality everyone can come and attack the municipality. We have engaged with the minister and the premier on solutions and how to deal with matters going forward...
“With the support coming from the provincial and national treasury, all these matters will be addressed once they make the announcement and what kind of support will be given [to the municipality] and already there are two liabilities that we are faced with, Rand Water and Eskom.
“With Rand Water, we have partnered with them on the special purpose vehicle that will be launched on the 1st of October whereby the water utility and Rand Water will form something independent that will help assist us to deal with the issues that we are faced with. The debt that we have incurred over the years will now fall into that special purpose vehicle."
Resident said they were battling with illegal dumping due to a lack of refuse collection in Boipatong township.
“Our living conditions are dehumanising. When residents come to dump their rubbish here, all that dirt comes back to my house. I even resorted to putting a gate to prevent this from happening, but it doesn’t help because litter comes flying over the gate,” said John Nhlanganiso Nkomo.
Jeanette Mongolo said in May, during the election season, they were promised bins but they have not been delivered.
“There were boys who tried to help the community by collecting trash bags from our homes for R5 but that did not last because they were still not being collected by the municipality on time,” said Mongolo. – Additional Reporting Nandi Ntini
SowetanLIVE
