Beaufort West Municipality has been placed under ‘partial administration’.
On Monday MEC for Economic Development, David Maynier wrote to the Speaker in the Western Cape Legislature to notify the house on the provincial executive’s decision to officially intervene at the municipality in terms of section 139(5)(a).
The municipality was first notified of the provincial treasury’s intentions at the end of July due to the financial crisis faced by the municipality.
Beaufort West is among four other municipalities in the province that owe Eskom R125million and was the only municipality in the province to receive a disclaimed audit outcome from the 2019/2020 audit report.
“On August 25, the provincial executive resolved to intervene in the municipality as a result of a crisis in its financial affairs,” read the letter.
On Tuesday the municipality held a council meeting and resolved to adopt the financial recovery plan.
“This is not a full-blown administration but a partial one with an aim to turn around the financial difficulties faced by our municipality,” said mayor Quinton Louw.
“We have presented our financial statements and there is a plan in place. Our difficulties are well known, the Eskom debt for one, and we are in an agreement and are sticking to the payment arrangements with regards to paying our arrears while focusing on also paying our current account.
“We have made big progress with reducing our outstanding debts, have dealt with the debts over 90 days and are working on the remainder.”
Maynier told Weekend Argus the national Treasury’s Municipal Financial Recovery Service would prepare a financial recovery plan with the assistance of the provincial Treasury.
“Once approved, the plan is binding on the municipality and all revenue, expenditure and budget decisions must be aligned to the plan. The implementation of the Financial Recovery Plan will then be monitored closely by the Provincial Treasury,” he added.
Chairperson on the standing committee on local government Derrick America said support and corrective action was being provided to other ANC-led municipalities that included Kannaland and Laingsburg.
“The department has refined a section 154 support package and the national Treasury has requested the development of a Financial Recovery Programme (FRM). In Laingsburg, the province will continue providing back-to-basic programmes which include bespoke support packages to improve service delivery for residents,” he said.
“However, it was Kannaland municipality which required the greatest intervention. The Executive also decided to intervene in terms of Section 139 (5) of the Constitution and an independent administrator was elected to implement the FRM.”