City boss Madoda Khathide’s frank admission that Msunduzi is broke and can’t even pay creditors on time left councillors speechless on Wednesday.
He was responding to questions related to the municipality’s financial situation as council expressed concerns about the runaway debtors book, theft of municipal services and the lack of movement in the indigent register.
Khathide said the City’s financial constraints made it difficult even to fill the vacant posts because it would not be able to pay those salaries.
On the late payments, Msunduzi sometimes ended up paying creditors more than 100 days after the submission of invoices. The national norm is 30 days.
The City manager said whatever goods or services were procured ended up costing Msunduzi more as creditors charged interest for delayed payments.
“When I just look at Eskom alone, it’s about R4 million a year,” he said.
He said the only two practical solutions at the moment are for Msunduzi to cut costs and to disconnect defaulting customers.
He said by the end of September he wants to have cut off all those who have to be disconnected. “We’ve started with disconnecting those that owe us more compared to the rest,” said Khathide.
Another challenge, he said, was paying contractors appointed to do the disconnections because the City did not have money for that either, so they are looking at doing the work in-house but also need electricians and cars for that.
While councillors agreed with Khathide that non-payment for municipal services should not be tolerated, ACDP councillor Rienus Niemand said Khathide must also deal with the theft of water and electricity.
“There are 22 000 households that are enjoying stealing from this municipality and that’s more than a million rand a day that we are losing,” said Niemand in reference to prepaid electricity meters reportedly tampered with.
DA caucus leader, councillor Sibongiseni Majola, said council had not seen any action against perpetrators.
He said the City was also shooting itself in the foot by not registering all the indigent households, and as a result they ended up getting unlimited free water and electricity.
“We could be getting revenue in a form of equitable share from National Treasury for providing those households with municipal services but we don’t and yet we still have to pay Umgeni Water and Eskom for the bulk purchases,” said Majola.
Msunduzi has just over 5 000 households on its indigent register, but reports by the Department of Co-operative Governance and Traditional Affairs (Cogta) indicated that it should have around 35 000.
Khathide said the administration had tried its best to get the qualifying households to register, but they did not want to come forward.
However, ANC Councillor Sandile Dlamini said: “As councillors we’ve been getting people in our wards to fill in the application forms and we submit those, but the municipality does not respond at all.”
He said he knew of several people who were being billed according to consumption when they should be receiving the indigent benefits.
Councillors said the municipality must also investigate the theft of municipal services in the suburbs as there were people living in posh houses who also bypassed water and electricity meters.