Cronjé defends uMngeni

2011-10-17 00:00

FINANCE MEC Ina Cronjé believes that uMngeni is economically viable and that the municipality is nowhere near requiring provincial intervention in its financial affairs in “a formal sense”.

Cronjé was referring to media reports last week about a recommendation of the Department of Co-operative Governance and Traditional Affairs (Cogta) to the municipality to seek the services of a financial administrator to help sort out its financial woes. She said media reports are “misleading” and it is “premature to refer to the municipality needing financial administration”.

The Cogta recommendation comes after an assessment of the municipality and reads: “Council should consider the provisions of section 135 to 137 of the Municipal Finance Management Act (MFMA) 2003 relating to a discretionary intervention, including the need for the appointment of a financial administrator to draft the necessary financial recovery plan and facilitate implementation thereof.”

Cogta in its assessment found the municipality has serious cash-flow problems and had started its financial year with a cash deficit. It was using grants to fund operations and had been using up its reserves and investments over a lengthy period. The report said that if the municipality continued on this trajectory it would be bankrupt shortly.

Cronjé acknowledged that there has long been concern about the finances of the municipality and that for some time the provincial Treasury had rendered assistance to uMngeni.

She said that according to the way the different tiers of government work the province cannot dictate to the municipality, but can support and assist it. “I don’t think that uMngeni is anywhere near — and I want to make this very clear — to requiring provincial intervention in a formal sense. We will discuss details with the mayor. Let us not speculate prematurely.”

She was speaking at a public meeting on Thursday evening called by uMngeni Mayor Mbali Myeni to report back to ratepayers about progress made in their rates dispute with the municipality. The Umngeni Rates Forum has called the 2011 valuation roll flawed and asked for it to be audited. The forum has also called for the lowering of the rates randage.

Myeni reported that a number of adjustments have been made as a result of the objection process. She said the objection exercise contributed to ensuring a more creditable valuation roll.

The Cogta assessment noted that an audit on the valuation roll is not viable as such an exercise could further cripple the municipality financially, considering that the budget has already been approved.

Umngeni Rates Forum chairperson Mano Naidoo thanked the mayor for responding to the town’s residents. Naidoo said Myeni is a pleasure to work with and that she has followed through on her promises to report back to residents.

He added that the forum feels vindicated as a number of positive adjustments were made to the valuation roll that brought another R386 million into the rates base.

“We are optimistic that we will get a review of the rate randage, which we are hoping will be in the region of about 0,09c,” said Naidoo.

However, he criticised Cronjé for saying the municipality is economically viable. He said the finance MEC accused reporters of misquoting the facts.

“But we have been saying from the outset that the municipality is mismanaged and we are hoping that with a spirited new mayor we will have some positive result.” he added.


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