In May, the Cradock-based Inxuba Yethemba council approved a budget that had a surplus of exactly R1.4-million. 

On the same day, the struggling municipality’s council approved a budget – without allowing parties to vote – that included the purchase of two R700,000 vehicles for the speaker and the mayor for a total of R1.4-million. 

The municipality has often been described as being on the verge of financial collapse and has been cited by the Auditor-General for its high levels of irregular expenditure.

Cradock (Photo supplied)

According to a written motivation filed with the ANC-dominated council, Mayor Noncedo Zonke and speaker Thembakazi Mbotya took over their predecessor’s vehicles, a Volkswagen Tiguan and Ford Everest, after the 2021 local government elections. 

These are out of their service plans, according to the motivation, and, due to frequent breakdowns, “they are posing a danger to the lives of the executive mayor and the speaker … hampering their ability to perform their duties”.

The motivation says the vehicles’ warranties have expired, raising concerns about ongoing repairs.

Democratic Alliance constituency leader Kobus Botha said the budget was passed after the speaker refused to allow for a vote by political parties. 

This budget included a 15% hike in electricity tariffs, despite Cradock suffering from frequent and lengthy power outages, and roads that are riddled with potholes.

Middelburg, the other town that falls under the Inxuba Yethemba Municipality, is reeling from months of water outages. Pheello Oliphant, spokesperson for the provincial MEC for Cooperative Governance and Traditional Affairs, said this was caused by issues with power.

“Water is a problem in Middelburg due to the small electricity grid which was 10MVA, but that has been upgraded to 20MVA. The problem became worse when the Chris Hani District Municipality was upgrading the boreholes … as a result, three water trucks are permanently stationed in Middleburg to supply water to the areas,” Oliphant added.

The Chris Hani District Municipality is the water services authority for the region. Oliphant said the town’s electricity capacity has now been upgraded and the water problems should start to ease. 

The Inxuba Yethemba Municipality owes Eskom R435.8-million.

According to a letter written by the provincial treasury’s Joyce Ntshinga, the budget was only regarded as funded after a “recalculation” by the treasury. 

“The surplus of R1.4-million as per Treasury recalculation above indicates that the municipality’s 2023/24 final budget is funded,” Ntshinga wrote, adding that this would be based on certain revenue collection targets for the municipality. 

These targets are property rates at 61.3%, interest arrears debtors (property rates) at 31%, refuse service charges at 4.8% and electricity service charges at 91.3%. The general collections rate for the municipality was around 54% at the end of the 2021 financial year.

“We have performed Eskom debt restructuring in line with the council-approved payment plan, as such the affected debt is reasonably spread in line with the payment plan,” Ntshinga added.

Inxuba Yethemba was highlighted by the Auditor-General this week as a municipality in financial crisis. A recommendation was added to its 2021/22 financial statement after the municipal manager did not take appropriate action on material irregularities related to interest incurred due to late payments to Eskom. DM