Financial rescue ‘urgent’

2011-10-12 00:00

THE KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs (Cogta) has suggested that the Umngeni Municipality urgently seek services of a financial administrator to rescue it from its financial doldrums.

The mayor, Mbali Myeni, said she would welcome such an intervention.

Presenting the assessment of the municipality to executive committee (Exco) members yesterday, the Cogta general manager for municipal finance, Joey Krishnan, said that Myeni had approached Cogta MEC Nomusa Dube to raise issues related to the financial instability of the council and unfair rates levied on ratepayers.

Myeni’s request led to Cogta conducting an assessment.

After a presentation lasting nearly two hours on the bleak assessment that touched on the council’s asset management, technical services, investment register and the controversial valuation roll, among other issues, Krishnan recommended that an immediate plan of action be drawn up to help the municipality return to financial health.

“The council and administration are advised that Umngeni Municipality is experiencing serious financial problems [and] council should consider … the appointment of a financial administrator to draft necessary financial recovery plan …”

Myeni said she would support the appointment of a financial administrator.

The Democratic Alliance caucus leader in the council, Pam Passmoor said she is pleased that Exco decided to recommend the appointment of a financial administrator to ensure that Umngeni returns tots solvency.

She congratulated Myeni for her brave stand in wanting to get to grips with the municipality’s financial shambles.

Krishnan said it was found that a cashflow projection for the year ending June 2012 runs out at a loss of R11 796 493 based on council’s spending trends.

“The forecast indicates that the municipality commenced the financial year with a cash deficit of R6 565 901 … Insufficient cash exists to finance operational requirement for the existing financial year,” said Krishnan.

She said that the municipality is using reserves to finance net current assets and has been doing this for lengthy periods to the extent that an amount of R30 million in grant funding was used over a two-year period.

She said R30 957 498, 83 was withdrawn from council’s investments over a 12-month period, which indicates that the municipality has serious cash flow problems.


mayor: blasts allegations made by council members

UMNGENI Mayor Mbali Myeni criticised allegations by some council members and employees that were carried in The Witness on Friday, which stated that the municipality’s management attempted to doctor some aspects of the assessment report by Cogta that was due to be presented to a council meeting on Thursday last week.

Myeni said, “It is unfortunate that while due processes were still under way in relation to the finalisation of the report by Cogta, some among us with a voracious appetite for grabbing media headlines went out and misrepresented the facts about the exercise we have undertaken. I must mention that I am the only recipient of this document …”

valuations and rates: 2 200 objections received

UMNGENI Municipality has received 2 200 objections over valuation and property rates and they have been referred to the valuer, E-Valuations, Joey Krishnan said.

There are so many objections that the valuer has not been able to meet the initial deadline of July 31. The deadline was extended to December 31 but brought forward to September 30, Krishnan said.

She recommended that all queries raised be reviewed. “All queries found to have merit will be adjusted as may be applicable. Queries within 10% to 15% of the disputed amounts based on actual sale figures will not be considered as they would be within norm.”

Mayor Myeni said she has called a meeting for tomorrow at which she will give feedback on the outcomes of the objections. The meeting will be held at the Howick West community hall at 5 pm.

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