DA calls for Renosterberg to be placed under administration

By Ismail Obaray, MPL, DA Provincial Spokesperson on Scopa:

The Democratic Alliance calls for Renosterberg Local Municipality to be placed under administration in terms of section 139 of the Constitution and for National Treasury to provide immediate support in the form of technical and financial advisors, in order to urgently put proper processes and systems in place.

This serious move follows the admission by both the mayor and the municipal manager in a SCOPA meeting today that the municipality is no longer able to meet its financial obligations.

In fact, the mayor and municipal manager had to go to National Treasury today to beg for funds to pay salaries.

Since the ANC took control of Renosterberg municipality in 2006, things proceeded to go downhill fast. Service delivery to the people of Phillipstown, Petrusville and Van Der Kloof has been on the decline for nine years already and the municipality has received only disclaimers since the 2008/2009 financial year.

Over the years, ratepayers have taken the municipality to court, municipal workers have downed tools and the DA has called on Provincial Treasury and COGHSTA to intervene. Interventions, however, only provided temporary relief and there remains no indication of any tangible improvement within Renosterberg.

Instead, Renosterberg was rated as the worst performing municipality in the province in the latest section 47 report, which measures the performance of municipalities against laws, regulations and basic service delivery outputs. Out of a possible score of 105, Renosterberg received only 19.

Current creditors stand at R33.4 million, while money owed to the municipality exceeds R30 million. There is a problem with numerous faulty accounts, water and electricity losses and the cash flow is seriously constrained.

At the end of June 2014, the municipality owed Eskom R14.5 million. In the meeting today, it was revealed that the arrears owed to Eskom has shot up with R6 million. The municipality now owes Eskom R20 million. The Water Board is also owed R1.7 million and the Auditor-General is owed R7.4 million.

The municipality does not seem to have a strategy to address the arrears. Due to the amounts owed to Eskom and the Water Board, National Treasury withheld the first trench of the municipality’s equitable share cut in March 2015. The municipality must pay all accounts owed as of March 2015 before it will receive its equitable share. If it is unable to pay, it must make arrangements to cover the outstanding accounts and the arrangements must be adopted as part of a council resolution.

The municipality has not done any of this. Instead, it is hoping for a bail-out from COGHSTA and Treasury.

The situation at Renosterberg municipality is untenable. More money cannot simply be thrown at this municipality. In fact it is puzzling as to why this completely dysfunctional municipality was not previously amalgamated with a better performing local government institution during the municipal demarcation process.

It is about time that a hard line is taken against local governments that show disregard for municipal law.

The DA condemns the Hollywood style of placing unqualified cadres in acting positions. Only by completely taking over the reigns of this municipality through a Section 139 intervention, and then by appointing a highly qualified CFO and replacing all ANC deployees with skilled professionals, instead of relying on the short-lived efforts of consultants, will a true turnabout take place in Renosterberg. Until then, the problems will just continue to mushroom.