Johannesburg - The DA in Carletonville has accused the ANC’s administration in the Merafong City Local Municipality of putting the council on the brink of collapse.
On Tuesday, the DA said the council’s list of defaulters on rates and taxes by business, government and residents was growing.
DA leaders Ina Cilliers and Blackie Zwart said the situation had worsened in the past four months.
“The revenue collection shortfall in Merafong for the past four months stands at R147.8 million, which is further compounded by outstanding debt of R766.4m - and increases by R25m a month.
“For a period of three months the municipality failed to collect any debts, due to a change in collection service providers. While a new service provider has been appointed, the collection rate remains low at less than 20 percent,” Cilliers said.
According to the DA, money owed includes government departments R21m, commercial businesses R298m, and R466m for households.
Cilliers also said the municipality was unable to recover outstanding debt or to follow prudent fiscal planning on its capital budget.
“Four months into the financial year, only 8 percent (R23m) of the R294m budget for the year was spent. This should be sitting around 31 percent - R93m.
“Similarly, the municipality struggles to manage its operational costs. Over a period of two months, R73m was drawn from its investment portfolio, leaving a balance of just R97m.
“Over the same period in the previous financial year, the portfolio’s balance stood at R314m. The ANC administration in Merafong is failing residents,” Cilliers said.
She said MEC for Co-operative Governance Jacob Mamabolo must investigate the municipality.
Merafong spokesman Chris Spies said the amounts and percentages mentioned were not the true reflection of the monthly statements of either the September or October financial reports submitted to the council.
“As with all institutions, the Post Office strike has had an impact on the collection rates of Merafong City.
“Further, the Blyvooruitzicht gold mine was declared bankrupt, yet the village and certain operations continue using water, which the municipality pays for, but is currently not paid for by the mine.
“This also has a negative impact on the municipality’s rate of debt collection,” Spies said.
He said the municipality was still financially viable.
“The municipality appointed a new debt collection and credit control company, which was brought in in July 2014 to assist the municipality with both debt collection and credit control functions,” Spies said.
An official municipal letter seen by The Star in which chief financial officer Rinkie Ngwenya proposed stricter credit controls appeared to corroborate the assertion.
In her letter dated October 23, Ngwenya recommended immediate disconnection of water and electricity to the Blyvooruitzicht mine.
The mine is facing liquidation and, according to municipality insiders, had been defaulting for some time on its rates and services.
The Star