KwaZulu-Natal Treasury says Impendle Local Municipality is unlikely to become financially self-sustaining under its current boundaries, citing a limited revenue base and ongoing financial challenges.
The small Midlands municipality has faced persistent administrative and financial problems, which have affected its ability to deliver services and pay employees on time.
Workers recently went on strike after reportedly going four months without receiving their salaries. The South African Municipal Workers’ Union (SAMWU) says employees received only one month’s salary last week, despite an instruction from the Cooperative Governance MEC for outstanding payments to be made.
Impendle was placed under administration earlier this year as authorities sought to address its financial and governance challenges.
KwaZulu-Natal Finance MEC Francois Rodgers made the comments during a visit to the SOS Children’s Home in Pietermaritzburg on Wednesday.
Rodgers says the municipality’s financial difficulties are partly linked to its boundaries and limited ability to generate its own revenue.
He says Impendle does not have a sufficient ratepayer and services base and also does not receive enough funding through the equitable share allocation.
“It doesn't have a revenue base that it can collect rates from and service charges from. It doesn't get enough equitable share.”
Rodgers says the situation points to shortcomings in the way the municipality was established by the Municipal Demarcation Board.
“That is a failure of the Demarcation Board, where you go and try and create a municipality on its own.”
Treasury says the municipality’s long-term financial sustainability will need to be considered as authorities continue efforts to address its financial and administrative problems.