Cape Town - Two West Coast municipalities are jointly in debt to the tune of R139.1 million and battling to fend off creditors.
Worn down by cash flow problems, ageing infrastructure and operating budget constraints, the Cederberg municipality owed creditors R71.79m as of the end of June, while the Matzikama municipality owed R67.31m at the end of August.
The two local government authorities, previously run by ANC-led councils, now both under DA control following the August polls - have come under scrutiny after requests for the provincial government to assist and probe their financial health.
A delegation from the Western Cape Local Government department and provincial treasury recently went to assess the finances and status of the municipalities.
Local Government MEC Anton Bredell, who sanctioned the high level assessment of the municipalities’ coffers, said the purpose was to ascertain how the provincial government could provide support.
Bredell said the assessment focussed on key areas of the administration as well as its relationship with the newly elected council, which might have a potential impact on governance and service delivery arrangements within the municipality.
Tackling Cederberg, Bredell said the administrative leadership in the municipality was stable with an experienced acting municipal manager at the helm, their key concerns were capacity constraints; upgrading of electricity network capacity; operating budget constraints and mayor cash flow problems.
“Key capacity constraints exist in the Directorate Engineering. Upgrading of the electricity network in Clanwilliam is very urgent as all developments have been put on hold due to insufficient capacity. Re-active maintenance due to operating budget constraints will lead to premature infrastructure failure with associated costly infrastructure replacement requirements in future,” Bredell said.
He warned of major cash flow challenges at the local government authority, with the municipality operating on an overdraft of R6m of which R4.23m was utilised by the end of August.
Regarding Matzikama, Bredell said although the municipal manager position had been vacant since September 2013, the administrative leadership within the municipality was stable.
“Matzikama Municipality is nearing its capacity in terms of electricity supply especially to new developments. This might pose a serious challenge to future developments,” he said.
Both town councils will respond to recommendations before the implementation of a comprehensive support package.
“This is considered necessary in order to stabilise both Cederberg and Matzikama Municipalities and improve governance and service delivery,” Bredell added.
Cape Argus