Cllr Peter Verbeek, the DA Emfuleni Caucus Shadow MMC for Finance and Revenue, writes:
A “failed” municipality entails that with some form of corrective measures Emfuleni Local Municipality (ELM) will be able to channel renewed energy into effectively rectifying present service delivery issues.A “failed” municipality means that the first partial administration of Emfuleni should have produced the desired results in the form of capacitating staff, the attainment of objectives as per different work streams and the streamlining of the Financial Recovery Plan (FRP) with the Integrated Development Plan (IDP) as well as its Service Delivery Budget Implementation Plan (SDBIP) which quantifies targets that the municipality needs to attain on a quarterly basis. Two years of Gauteng provincial support should have produced something.
In addition, implementation of Consequence Management across all levels of Emfuleni staff should have effectively taken place as of March/April of 2019 as per Council resolution. Notwithstanding this resolution, not a single Consequence Management Report has been tabled in Emfuleni Council.
Furthermore, during an Item to Emfuleni Council on July 30, 2020, it became abundantly clear that of the 68 800 pre-paid meters in Emfuleni, only 23 300 pre-paid meters were purchasing electricity on a monthly basis. This means that 46 500 pre-paid meters are not purchasing electricity on a monthly basis which seriously dispenses any doubt as to effective municipal revenue collection.
A “broken” municipality entails that structural and systemic corrective measures will not assist the municipality to recover from a “failed” situation. The current reality in Emfuleni is:
• Eskom is owed nearly R2,8 billion
• Rand Water is owed nearly R1,1 billion
• Wasteful, irregular, fruitless expenditure is hovering around R1,1 billion
• The smart meter debacle has ensured an additional burden of R495 million
• Lost CCMA cases against Emfuleni staff of around R500 million
• The debtors book equates to over R9,5 billion; roughly 150% of Emfuleni’s annual budget
• Residents owe Emfuleni a staggering R8,6 billion from originally R2,5 billion; an increase of more than 240%.
With an annual municipal budget of around R6 billion, the current situation absolutely calls for drastic measures than just a “failed” municipality approach is able to provide. It is critical to understand that Emfuleni Local Municipality is not looking for millions any more (that is doable within a “failed” municipality approach) but actually looking for billions (more in line with a “broken” municipality approach).
The following falls within the “broken” municipality corrective approach:
• The National Treasury must amend its 59% Indigent Status of the South African population to at least 70%. This as per the impact of COVID-19 within society in general and the economy in specific. Such an amendment will increase the funding from the national government to the municipalities;
• The National Treasury must amend its 8,8% that municipalities get from the national government as equitable share of the national budget to at least 28,8%. This as nearly 200 of the 256 municipalities are technically bankrupt and the basic idea that municipalities can generate sufficient funds to sustain local service delivery is unworkable within the current 8,8%. This will release more funds from the national government to local spheres of government;
• A total overhaul of present Emfuleni municipal staff organogram with realignment of current required skills to today’s socio-economic needs. A more “flat” staff organogram structure should be envisioned with remuneration packages based on performance; and
• Implementation of Consequence Management as per policy with detailed stipulated consequences.Emfuleni Local Municipality is entering a phase that is more conducive towards initiating fundamental structural changes based on a “broken” municipality approach. A “broken” municipality approach where residents can bear witness to systemic recovery of local service delivery conducive towards a healthy life within a community that wishes to move into the future together.
