Note to Editors: Please find attached English and Afrikaans soundbites by Cllr David Ross and Sesotho soundbite by David Masoeu MPL.
The Democratic Alliance (DA) Finance Committee in Nala Local Municipality will intensify oversight and table practical financial recovery measures to ensure the municipality adopts a Treasury-compliant Funding Plan and moves from an unfunded to a fully funded budget. Failure to address the municipality’s growing budget deficits will leave Nala financially distressed, unable to meet its constitutional obligations, and increasingly unable to deliver reliable basic services to communities.
The unfunded budget of the Nala Municipality will leave the municipality financially distressed and unable to fulfil its constitutional mandate.
Against this background, municipalities are required to prepare a funding plan to ensure they transition from an unfunded budget to a fully funded one.
Furthermore, the National Treasury requires the municipality to develop a funding plan to continue providing services and extend them to the community.
The municipality’s inability to achieve a balanced budget is driven by high service delivery costs, poor maintenance and ageing infrastructure, rising employee and overtime expenses, and significant distribution losses from faulty or unmetered connections. Weak debt collection, ineffective credit control, stagnant prepaid electricity sales, and poor management of indigent water consumption further worsen the municipality’s financial situation, while the high cost of bulk electricity services continues to place additional pressure on its finances.
The DA-led financial committee plans to ensure a fully funded budget and complete revenue by linking the prepaid vending system to the billing system to account for all sales.
The review and implementation of an indigent policy on water flow metering and the installation of prepaid metres are important, as water losses have spiralled to an unacceptable 40% of the supply.
In this regard, the DA will base its proposals on a 65% collection rate and propose to the council that it adopt a revised cost.
The purpose of the revised Cost Containment Policy is to strengthen financial discipline and improve efficiency at the municipality through:
- Addressing the excessive overtime expenditure.
- Noting the legal reality in South Africa that Municipal salaries are set through the South African
- Local Bargaining Council agreements, which establish a 5-year wage agreement, policy should focus on the primary intervention of Overtime Control.
- Pre-approval required for all overtime.
- Departmental overtime limits.
- Monthly monitoring and reporting to the Finance Committee and Council.
- Freeze on non- critical administrative positions, but protect essential service delivery posts.
- Contain growth in employee- related costs.
The Finance Committee will engage with Treasury on the employee-related cost as a percentage of operating expenditure, and, if the municipality exceeds norms, request that Treasury flag the budget as unsustainable and call for revision before approval.
The Committee will monitor oversight of Section 71 monthly reports and sec 72 of the Systems Act mid-year assessments and will engage Treasury and Vaal Central proactively on the implementation of cost containment measures to ensure continued delivery of essential services.