‘We depend on loan sharks’ − Municipal workers go months without salaries, medical aid

With bills piling up and no money to buy food for their families, employees at the Kopanong Local Municipality are at the mercy of loan sharks after going almost three months without getting paid.

The last time Free State‘s Kopanong paid out salaries to workers and councillors was on 6 December 2023.

Residents are not getting basic municipal services such as water, while the debt to service providers, bulk water suppliers and Eskom runs into hundreds of millions of rands.

Trompsburg-headquartered rural Kopanong also owes money to the SA Revenue Service (Sars), pension funds and medical aid schemes, even though it debits those premiums from workers’ salaries.

The municipality is led by ANC Mayor Xolani Tseletsele, who made headlines last year when he was captured on video threatening resident Kalebe Kalebe.

Bank account attached

Things got worse when the pension fund attached the municipality’s bank account last year.

Kopanong owes more than R60 million in unpaid pension fund premiums and interest.

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The council offered an upfront payment of R2 million and tried to negotiate payment terms, but the fund demanded R19 million, according to the Democratic Alliance (DA) caucus.

Employee Nongasi Dortjie says she depends on relatives and friends as if she does not have a job.

“I am struggling. I borrow money to try to pay overdue accounts and funeral policies. For food and electricity, I borrow from loan sharks.

“The high interest on the loans means I will never be able to free myself from the cash loan people.

“I am stressed, I feel ill all the time. We are drowning because of Kopanong,” she said.

The municipality was placed under provincial administration last year largely due to its inability to provide basic services.

Medical aid woes

Another employee, Palesa Modise, said she ended up delivering her baby at a public hospital after a Netcare private hospital in Bloemfontein turned her away.

“I went to Netcare to book myself in for the arrival of the baby. I felt so numb when the administrator said my medical aid was inactive.

“An hour later I was at Pelonomi [public] hospital even though I am a member of a medical aid scheme. It is the worst situation for a pregnant woman,” she said.

Without medical aid, she can no longer visit her private doctor for consultations and medication for her chronic condition.

Kopanong fights back

According to a member of the council, the municipality chose to challenge the pension fund in court to get its bank account back.

“The council was informed about the planned court case, but there’s no feedback. They went to court last week, but remain quiet.

“Management keeps saying they are working to regain control of the account, but there’s no plan on debt repayment.

“The mayor, speaker and acting municipal manager are just keeping quiet. We are owed salaries, policies have lapsed, even our council-issued cellphones have been blocked by Vodacom. Themunicipality is deep in debt,” the council member said.

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According to the insider, most councillors believe the account coffers have been emptied.

“The pension fund is probably waiting for the municipal grant coming in March, there are no funds in that bank account.

“Kopanong has collapsed,” said the source, who insisted on remaining anonymous for fear of reprisal.

‘We’re in talks with pension fund’

Meanwhile, Tseletsele denied there was a court challenge to wrestle back the FNB bank account.

“We are negotiating with the pension administrators to allow us access to the bank account so that we can pay salaries.

“The discussions are very positive. Their concern is that an agreement reached with Kopanong in 2018 was never honoured.

“That was before this administration came in. Our administration’s agreement with them was signed in 2021 to pay them within two to three years,” he said.

Following the non-fulfilment of yet another agreement, the pension administrators moved to attach the account last year.

Asked where the money to pay the accumulating debt will come from, Tseletsele said the council is awaiting the implementation of the financial recovery plan.

He added that Kopanong was heavily indebted and that rate collections were not enough to plug the financial hole.

“National and the provincial government are trying to help us with the financial recovery plan.

“Because the municipality is too vast and rural, we are also trying to divide it into manageable towns so that we can guide the financial recovery and economic revival plans,” he said.

Other crisis-plagued municipalities in the province that were placed under administration are Mangaung (Bloemfontein), Tokologo (Boshoff) and Mafube (Frankfort).

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