Cederberg Municipality running on empty, in desperate need of R127m to turn financial crisis around

THE Cederberg Municipality is technically bankrupt and will need R127 million to turn its financial situation around, says Mayor Ruben Richards.

The municipality’s financial position deteriorated “dramatically” over the last five years, Richards said in a statement yesterday, adding that this was a financial crisis inherited from the previous Council.

“Our financial situation is desperate. We are technically bankrupt. Previous councils of the municipality have bequeathed us a cumulative debt of R127 million. For the past five years, in particular, the ruling councils of the municipality approved what is called unfunded budgets which is essentially a contravention of the law.

“In short, the expenses of the municipality were more than the income received. In order to balance the books, the council approved taking money allocated for grants, subsidies and infrastructure projects in order to pay salaries and other operational costs. In addition, people were given jobs even though the municipality could not afford it. Now we sit with a massive problem,” Richards said.

This has resulted in the inability for the municipality to provide efficient and cost effective services to its residents.

“Unfortunately, our running (operational) expenses are more than our income. Also, over at least the past five years, almost nothing was spent on maintenance because there was simply no money to do it with. And that is now causing a crisis nearly every week with pumps breaking, pipes bursting, sewerage spills, electrical failures and our garbage collection truck more broken and in for repairs than on the road collecting garbage,” he said.

“We therefore face a crisis at a service delivery level. That is why in the proposed new budget (2022/23) we have made service delivery priority number one. That means we must focus on our core business and reduce and/or remove all non-core business items and activities.

“This is part of the process of tightening the belt. We must bring our expenses in line with our income.”

He said this was going to take time and be “disruptive” for some people.

Cederberg resident, Niklaas Mouton said he believed issues within the Municipality started around 2010.