Over recent months Grahamstown Residents’ Association has reported on the declining state of Makana’s finances. This has become the default reason given for non-delivery of the services Makana has a statutory duty to provide.
Whilst the financial crisis is routinely spoken about in meetings, the escalating problems with cash flow and mounting debt have not attracted the necessary urgency of action. All the road painting, pothole patching and street light fixing that suddenly took place before Festival cost the municipality about R1.6 million, granted for this purpose by Province. The rest of the year these teams of workers are mostly denied the equipment and materials they need due to lack of funds.
As a result of these woes, and the obvious lack of performance and progress, GRA has joined with Grahamstown Business Forum and Makana Unity League to form the Concerned Citizens Committee to Save Makana. CCCSM, chaired by Ron Weissenberg, wrote first to the Executive Mayor and subsequently to the EC Premier and others. What follows is GRA’s view on progress of CCCSM’s initiative; we do not claim that these views represent CCCSM as a whole.
Ron Weissenberg informs us that, “Whereas the CCCSM appreciates the good faith displayed by the representatives of the four government branches, we are not happy with the uncertainty around dates, deadlines and the ability to urgently source an expert turnaround specialist. The citizens of Makana have been let down so often in the past and we cannot allow this to happen again.”
The requirements CCCSM put can be summarised as:
1) Either a commitment to initiate Full Administration, or to have a Turnaround Specialist’ appointed with authority to take necessary actions
2) R47 million in emergency funding.
The upshot was a meeting at 11am on Friday 28 July at the Makana City Hall between representatives of CCCSM, Zandisile Qupe (Office of the Premier), the Executive Mayor and her committee, and senior Makana officials. Mr Qupe stated that he had engaged with the Sarah Baartman District Council (SBDC) and the Department of Cooperative Governance and Traditional Affairs (Cogta).
The meeting lasted more than two hours. Acting municipal manager Dali Mlenzana defended Makana Council on all the points raised in the seven-page letter from CCCSM, including saying that a municipality is entitled to use all revenues raised for purposes deemed necessary, including revenues collected for electricity.
Various officials explained why they thought full administration was not appropriate, for example that the municipality is politically stable. The previous Section 139 1(b) Administration was defended for having tackled ‘soft’ issues and for producing strategies such as a Revenue Enhancement Strategy and Financial Recovery Plan. It was agreed that there had been insufficient impetus to drive these policies forward, and that issues such as meter reading still required more attention.
CCCSM members raised the issue of the net average monthly cash flow deficit of R5 million and were not convinced that this was adequately addressed, as most of the focus was on long-term debt, including writing off unrecoverable debt. The Executive Mayor expressed the view that proposed investments in a clean energy plant and converting the local airport to a major repair facility would solve the long-term financial flow problem. The latter idea, in summary, is to turn the site into a mixture of industrial units and housing. The industry would be centred on stripping and recycling obsolete aircraft.
Although CCCSM members reserve judgement on the explanations furnished, and still question whether the urgency of the situation is recognised, it was agreed that the lack of a permanent municipal manager, with requisite skills and support, is a major factor in the current malaise. Consequently, from different viewpoints it was still possible to agree an acceptable outcome. In brief the plan is:
- A commitment to second an experienced manager under Section 154 to address the core problems, leading up to the appointment of a permanent municipal manager. The provincial government does not have a suitable person available, so this request has been escalated to national government as an urgent requirement. The cost is to be borne by the national government.
- It was also pointed out that a permanent human resources director had been selected and would be in the post from 1 August.
- The Eastern Cape government and Cogta have assessed Makana as requiring R150 million in financial assistance to fund short-, medium- and long-term issues. To date R6.2 million has been paid to clear issues that threatened the viability of the Festival.
- The Task Team agreed at the Special Council Meeting on 27 June has been selected. It comprises Executive Mayor Nomhle Gaga (chair); councillors Nase, Masoma and Nhanha, plus three financial experts. The task team has 60 days to make its initial report to Council. Further experts may be co-opted, although it is not desirable for the team to become too large.
CCCSM representatives collectively felt it unfortunate that they had been forced into a confrontational approach to get the crisis taken seriously. GRA representatives assess the meeting as a success since agreement was reached amicably and Makana councillors and the Mayor expressed a strong wish to work collaboratively going forward.
GRA strongly hopes, with a capable manager seconded, that we can get behind and support improvements. This extends to encouraging the enforcement of municipal by-laws and ensuring that residents and businesses pay municipal bills timeously. We also believe that unproductive employees is a core issue that this manager must address.
CCCSM plans to meet to follow up as soon as possible once we have a formal response from Mr Qupe.