DEAR Editor,-
The minutes of the Ugu Executive Committee meeting held on September 19 and tabled at full council on October 30 give stark insight into the financial position of the district municipality.
Ugu started the new financial year of 2014/2015 with a cash deficit of R15.8 million. The turnaround strategy of the municipality indicated that there was a need to reduce personnel expenditure which amounted to 80 percent of Ugu’s total water and sanitation income of approximately R26 million a month.
The municipal manager pointed out that the occurrence of service delivery protests had led to unbudgeted financial costs. He went on to say that if the situation was left unattended, it would render the municipality dysfunctional with ‘undesirable’ consequences. This may already have happened!
At the Presidential Summit on local government held in Gauteng on September 18 attended by President Jacob Zuma, as well as the Cogta minister Pravin Gordhan, it was revealed that Ugu District Municipality was one of the worst eight municipalities in KZN, requiring intervention. The reasons listed for placing municipalities in this category included endemic corruption, dysfunctional council, and poor financial management.
It is common knowledge that Ugu is already the beneficiary of Municipal Financial Management Act (MFMA) Section 137 voluntary intervention by Province, with both Cogta and Treasury providing support to the municipality. If there is to be another intervention, as required by Ugu’s categorisation as a dysfunctional municipality, the question arises whether there will be a mandatory Section 139 provincial intervention, with all that that implies?
DAVID SNASHALL
