22 JANUARY 2020
MAKANA COUNCIL TO APPEAL THE COURT JUDGEMENT ON DISSOLUTION
In a judgement passed on the 14th January 2020, the High Court found Makana Local Municipality to be in breach of section 152(1) of the Constitution. The municipality according to the judgement has failed to ensure the provision of services to the Makana community in a sustainable manner and failed to promote a safe and healthy environment nor does it adhere to section 153(a) of the Constitution which provides that:
‘A municipality must structure and manage its administration and planning processes to give priority to the basic needs of the community and to promote the social and economic development of the community.’
The court therefore ordered that the Executive Council of the Province intervene in terms of section 139(1)(c) of the Constitution read with section 139 and 140 of the MFMA and to inter alia appoint a competent administrator for Makana LM forthwith. This clearly means that the Council must be dissolved.
We have read the judgement that was delivered by Judge Igna Stretch and as the Council we believe that there are reasonable grounds to appeal. We are confident that our legal team will deal with these issues.
I would like to highlight some of the strides that this council has been made since that period, both politically and administratively. We believe that the interventions that were implemented, in fact, made a significant difference.
Financial recovery: Our financial situation has changed. We are now able to pay our current creditors as they fall due and we have payment plans in place to settle arrear creditorsover a period of two years. Arrear Creditors have decreased from R190 million to R121 million.
In efforts to curb the escalating debt, the municipality has from May 2019 launched Revenue Management initiatives which includes: ensuring all meters are read and verified to generate accurate monthly billing accounts; improving customer care and supervision to resolve account disputes; and intensifying credit control mechanisms by disconnecting electricity and issuing legal notices to recover debt from all arrear customers. The municipality will now embark on replacing credit meters with prepaid meters to further reduce estimations and boost its cash-flow management.
The municipality realizes that not all customers can afford to pay for services and therefore it has an indigent assistance programme that is currently being driven with the assistance of a service provider. Other households with arrear debt can apply to make an arrangement to pay 50% of their debt with the incentive of having the remaining 50% written off if they pay all the instalments on time every month. This offer expired on 31 December 2019 but a request will be tabled to Council to extend the programme due to amount of time it takes to raise funds to afford debt settlement and also to address account queries.
The municipality has also been paying staff salaries and benefits without fail since 2015. There has been no instance that the municipality engaged staff to inform them that salaries and / or benefits will not be paid over to staff during this period. National and Provincial Treasury has commended the municipality for improving its financial governance and budget management after the municipality tabled its first funded adjustment budget on 08 November 2019 in this term of Council. Budget provision has been made to improve service delivery through repairs and maintenance of which we will see results in coming months.
It is important to note that the original Financial Recovery Plan was tabled to and approved at a Council Meeting held on 31 March 2015. That Financial Recovery plan was then aligned to the Budget & IDP for implementation. The municipality has reviewed its Financial Recovery Plan in line with the Adjustment Budget on 08 November 2019 and can be found on our website www.makana.gov.za The Council will now monitor the implementation of this plan as it is key to successfully turning around the municipality.
Our debt recovery rate has improved and is currently sitting on 90 percent with the highest recovery rate coming from Government departments who regularly pay their debts and reduce their arrears; followed by the business sector; and the lowest collection rate is the residential category.
Water Supply and Quality: Progress was made with water supply in difficult circumstances during the current drought and providing clean drinking water. A project to upgrade the James Kleynhans Water Treatment Works is currently underway and is expected to be finished in 2021. This project will allow us to produce about 20 Mega litres per day which would then be sufficient to supply the entire Makhanda from that sustainable water source. Difficulties currently being experienced with water supply is as a result of the drought that prevents from pumping water from the rain-fed dams. In light of the drought and to prolong our current water supply, the municipality has recorded the following success:
- Water Conservation & Demand Management (leak repais and meters);
- Revenue Enhancement through installing of bulk zone meters;
- Installed telemetry at reservoirs;
- Refurbishment of James Kleynhans Pumpstation
- Installing a pumpstation at intermediate reservoir;
- Transferring water from James Kleynhans to the West side of town.
- Drilling & Equipping boreholes to augment our water supply;
- Refurbishment and upgrading of water infrastructure to minimize leaks.
We are currently implementing Sewerage Projects totaling R21 million with a further Bulk Upgrade of all our Wastewater Treatment Works totaling R390 million planned to commence from 2022 funded by the Regional Bulk Infrastructure Grant.
The Municipal Infrastructure Support Agency (MISA) has provided R10 million to upgrade roads in the CBD and that tender is currently being advertised.
A Spatial Development Framework (SDF) that is compliant with all legislation and enables investment was approved by Council on 30 October 2019.
Our Electricity Infrastructure is currently being upgraded to the tune of R 8 million whereby a 66kv line and 3 Mini-substations is being upgraded.
We have improved our governance in that our budget is being passed every year and planning processes such as IDP are in place and they do give priority to the needs of the community and promote the social economic development of the community.
We have developed and approved and Integrated Waste Management Plan (IWMP) in 2018 and submitted to the Department of Environmental Affairs (DEA) in March 2019 for funding of Waste projects such as refurbishment and upgrading of landfill sites; establishing recycling projects; and clearing and prevention of illegal dumping sites. Furthermore we have forged links with Independent Development Trust (IDT) and DEA to appoint 70 youth members to be integrated into the municipal cleansing initiatives. Refuse removal is done once a week for households and twice a week for businesses.
Considering the Financial Recovery Plan the following were achieved:
- Improve governance and political oversight
There is a Municipal Public Accounts Committee (MPAC) in place that is strictly dealing with oversight – the suspension of the Dir Infrastructure was as the results of this committee. The Council meetings, Portfolio Committee meetings, Budget Steering Committee, meetings and Audit & Risk Committee meetings are sitting as per their scheduled dates. A Financial Misconduct Disciplinary Board has also been established. Resolutions are taken during these meeting and thereafter implemented.
- Filling of critical senior management positions
Since 2014, Directors of Engineering; Corporate Services; Chief Financial Officer; and the Municipal Manager and Manaager: Legal services were appointed. The municipality is currently in the process of recruiting a Director: Engineering & Infrastructural Services.
- Organizational Structure review
The organizational structure was approved on 30 October 2019 in an Ordinary Council meeting and it is in a process of being implemented
- Improved system of delegation
The system is being implemented and there is a delegation register in place
- Improved expenditure management
Moratorium on non-critical positions was enforced, cost containment measures have been put in place to curb Irregular, Wasteful and Fruitless expenditure. There is noticeable improvement on overtime abuse.
- Address audit outcomes
The municipality submitted its 2018/19 Annual Financial Statements to the Auditor General of South Africa on 31 August 2019 in accordance with section 122 & 126 of the Municipal Finance Management Act (Act No. 56 of 2003) (MFMA) & will be submitting its 2019/20 Mid-year budget & performance report to Council on 30 January 2020 in accordance with section 72 of the MFMA. All other administrative requirements are being submitted to the AG.
As this Council we have committed ourselves to turn Makana Municipality’s state of affairs around. This will be possible with the assistance from the interventions of the Provincial and National Government. For all of these to be achieved we need to strengthen our relations with our residents, business sector and other stakeholders as they also have an obligation of paying their services which will ensure that the municipality is able to render services that are unhindered. The municipality thanks all those who have been loyal in paying their accounts.