The cash-strapped Makana Municipality will pay out of its own pocket to defend a civil case against Grahamstown lawyer and former councillor Paul Notyawa.
The cash-strapped Makana Municipality will pay out of its own pocket to defend a civil case against Grahamstown lawyer and former councillor Paul Notyawa.
In last week’s council meeting it was revealed that Mayor Nomhle Gaga had urged all staff to work to raise R110 million to pay off municipal creditors. Gaga said this would include identifying areas internally where these funds could be raised.
Speaking to Grocott’s Mail this week, acting municipal manager Mandisi Planga said the municipality’s intention is to oppose the case, but he was not sure when it was going back to court.
Responding to a question about where the money to oppose the matter will be sourced, Planga said Makana would have to foot their own bill. “As the municipality we are the first respondents and the MEC is the second respondent.
The municipality’s bill is our responsibility,” he said. Planga hinted at the fact that Notyawa had withdrawn his initial court application against the municipality and as a result still needed to tender costs for that case.
“You must remember that Notyawa withdrew his application and there are costs he needs to pay,” he said.
Planga said as the municipality they have an institutional responsibility to defend themselves. “When there is a matter we have a responsibility. If we feel we need to oppose it, we will do so and we then have to foot the bill,” he said.
Last week it emerged that the DA will not be part of a court process meant to oppose an application to interdict the appointment of a municipal manager brought by Notyawa against the municipality.
Notyawa has been in a protracted court battle with Makana Municipality since his appointment by the former council last year in March. It initially seemed as if Notyawa had given up on the position when he withdrew his court application.
In what has been described as a heated confidential meeting the DA wanted it to be placed on record that they objected to Council opposing Notyawa’s motion for an interdict.
Sources close to the DA say the party said the previous council appointed Notyawa to the position last year and made it clear in the meeting that the ANC caucus would have to foot the bill for any costs associated with the matter.
DA caucus leader Mlindi Nhanha confirmed that Notyawa’s matter was on the agenda but declined to comment further.
In the confidential session of an ordinary council meeting in the municipal chambers on Wednesday, the ANC outvoted the DA to reach a decision to oppose the application for an interdict brought by Notyawa.
The case is expected to continue in the high court in Grahamstown next week. Attempts to reach Notyawa were unsuccessful at the time of going to print.
Cash flow crisis
According to an agenda item tabled in Council on Wednesday last week the municipality has been experiencing cash flow challenges since 2013. A decision was made to request that the municipality be placed under administration with the hope that there would be some financial relief.
Although an amount of R25 million was paid on behalf of the municipality to large creditors such as Eskom and the Auditor-General, the larger bulk of the of the creditors remains unpaid.
This according to the document has led to numerous instances of litigation against the municipality.
The municipality has made concerted efforts to debts owed to the municipality by residents. However, this remains a serious challenge because the municipality is still owed around R340m by residents.
This according to the document impacts negatively on the ability of the municipality to honour commitments to suppliers and creditors. The municipality owes in total of around R110m to creditors.
Compared to this the municipality’s monthly income amounts to R18m, increasing to about R22m as was the case in August. The municipality’s collection rate currently sits on 94 percent, yet it isn’t able to pay its debts.
This is an indication that additional sources of revenue have to be found. Even cutting out the municipality’s highly inflated overtime budget will only account for only R600 000 monthly.
Possible projects the municipality could undertake to raise the R110m target, according to the document, include selling land; leasing unused Council properties; selling redundant stock and other movable assets.
A long-term solution is to increase the number of registered indigent residents, as this would increase the equitable share payable to the municipality.
anele@grocotts.co.za
