Having gained national notoriety after a second, major two-week water outage earlier this year, the embattled Makana Municipality is deflecting blows in an effort to quell rumours that their coffers are empty. Local DA representatives have called for the municipality to be placed under administration, the city’s biggest worker union has announced an investigation into its finances, and it is embroiled in a war of words with Rhodes University about an alleged R3 million bailout. By AVUYILE MNGIXTAMA-DIKO and KAYLA ROUX.
On 25 October – pay day – drama erupted outside the City Hall in Grahamstown when a group of unpaid workers gathered, demanding to know what had happened to their earnings. SAMWU officials attempted to placate workers, relaying the municipality’s message that they had not been paid merely because of a “technical glitch”.
“We have bonds, car payments and policies bouncing in the bank. In the 25 years of my working life, I have never experienced this. It is very frustrating and we will be the ones accruing all the interests,” said one of the angry workers.
After a scramble to contact the city’s “top ten” debtors, Makana managed to pay some of its workers over the following weekend – but the workers’ fortunes were mixed.
Councillors adjourned a Council meeting on the following Monday because the mayor, Zamuxolo Peter, and municipal manager, Dr Pravine Naidoo, were forced to address disgruntled workers who still hadn’t received their October pay cheques.
Then on Tuesday, at a meeting which had taken on crisis proportions, the mayor confirmed that the municipality was facing serious “cash flow problems”, blaming these on outstanding residential and institutional municipal services accounts. Municipal spokesperson, Mncedisi Boma, identified Rhodes University as one of Makana’s debtors – with a whopping R8 million in outstanding debt.
But the university’s administration denies that it has any unpaid debt. According to Rhodes University’s Executive Director of Infrastructure, Operations and Finance, Dr Iain L’Ange, the university paid the municipality R3 million as an advance payment in anticipation of future services.
Peter, meanwhile, has rubbished recent claims by the Daily Dispatch that Rhodes University “bailed out” the municipality so it could pay employees.
Speaking to Grocott’s Mail on Tuesday, 29 October, the mayor explained that like several other Grahamstown institutions, the University owed the municipality rates. There had been no coming-to-the rescue, he said.
“Rhodes, like other people who owe us, was paying its outstanding debt. It was just fortunate that they paid that day,” said Peter. He said the University had signed an agreement with Makana’s finance department to settle their debt.
“Rhodes is not a bank or a loan shark to say that they gave us an advance. It’s what they owe us anyway as the municipality,” Peter said. “We are grateful to them for paying [but] that is what we expect from all our creditors.”
Dr Iain L’Ange says the high staff turnover in the municipality’s Finance directorate meant that a discrepancy in the University’s municipal electricity account, discovered in September 2012, had remained unresolved. Makana Municipality had asked the University to make a payment against the disputed amount.
Instead the University had made an advance payment of R3 million for municipal services to be provided.
Boma admits that various large businesses and government departments have queried the municipal billing methodology over the past years, Rhodes University being one of them. They are currently locked in discussions to resolve this huge discrepancy.
While this war of words raged, Boma attempted to assure the public in a statement that the municipality was working hard at putting systems into place to ensure an effective and reliable billing system and more a vigorous implementation of their Credit Control Policy.
According to DA councillor, Les Reynolds, only 60 cents is recovered for every Rand billed for municipal services – and it takes about 200 days to recover this 60 cents. “This translates into a debtors list of R225 million,” he said in a media statement.
He listed the municipality’s shocking debt recovery rate alongside other, more vague reasons for the default including “wild spending”, “and unproductive and unmotivated staff”, and “willy-nilly political appointments”.
Whether or not Reynolds has got his facts straight, Makana Municipality has a lot to answer for. But extracting information from notoriously uncommunicative officials – including Boma, the municipal spokesperson – has never been an easy task.
Foreseeing a “city-wide shutdown”, DA officials are escalating the drive to resolve the issue. Shadow MEC for Local Government, Dacre Haddon, has contacted MEC for Local Government, Mlibo Qoboshiyane, and asked him to undertake a forensic investigation into Makana’s finances and place the municipality under administration. His colleague in parliament, Kevin Mileham, has written to the Minister of Cooperative Governance, Lechesa Tsenoli.
So how does a municipality run out of money so early in the financial year? Spending more than you earn is a good place to start. Editor of Grocott’s Mail, Steven Lang, has had a few years’ experience with the local government. “It could be a result of massive incompetence, poor governance or rampant corruption, but it is most probably a lethal concoction of all three facilitated by cadre deployment,” he wrote in an editorial column last Friday.
Lang thinks it’s probably a good idea for Makana to be put under administration. “But doing it through the Eastern Cape government is like asking the wolf to look after your sheep. The provincial administration is also in dire need of professionalisation and is hardly in any shape to put the Makana house in order,” he writes.
Makana’s lack of communication only heightens the sense of panic surrounding the state of local government over the past two weeks. On Monday, 28 October, Peter announced a reshuffle of the Mayoral Committee – the municipality’s executive – bringing proceedings at the council meeting to a stunned halt. This reshuffle came without warning, and without the knowledge of the ruling party’s regional committee.
According to Lang, this has provoked the wrath of party bosses who are now threatening to remove the mayor from office. This has also deepened the rift between opposing factions in Council.
Two of the five director posts in the municipality are vacant and currently being filled by acting directors. “For reasons unknown to us, the man who is occupying the office of the Municipal Manager (Pravine Naidoo) has not signed a contract nor a performance agreement as required by law,” writes Lang.
Not only this, but Naidoo is currently involved in a wage dispute with his (disputed) employee. He took the municipality to the Labour Court after his removal from office in 2007 during his previous term as municipal manager.
Last week, evidence came to light that Council Speaker, Rachel Madinda-Isaac, earlier this month agreed to pay more than R100,000 in legal costs, on top of a R3 million out-of-court settlement with Naidoo.
ANC leadership in the Sara Baartman region will attend a special council meeting on Wednesday, 6 November, at Makana Municipality to discuss the way ahead regarding the current financial crisis.
Makana’s financial troubles and political wobbles are but two of the major crises facing Makana municipality. The crumbling infrastructure, unending series of water outages, frequent power cuts and sewage rivers that make their way through houses, yards and vegetable gardens are taking their toll. Reynolds claims DA councillors in Makana have been warning of this “impending calamity” for years, only for their cries to fall on deaf ears. His apocalyptic-sounding statement has been echoed by ever-wearying Makana residents who are running out of patience, fast. DM
Photo: Grahamstown (Ian Turk)