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Introduction
This Press Conference is intended amongst others to give an update to the members of the media house on progress related to the implementation of Section 139 (1) (b), in the Madibeng Local Municipality.
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It will also cover or respond to other outstanding media related questions and issues in order to put a correct perspective
Phillemon Mapulane
At the same time, we wish to hail the sterling work of the members of the ISU, Hawks and our own Investigators on the matter that involves the Suspended Municipal Managers, Mr. Philly Mapulane, so that justice can prevail and what was or is due to the residents of Madibeng can be received back, to accelerate service delivery.
Contrary to certain believes, the money spent by the municipality for investigation was not just wasteful expenditure as the report assisted a great deal in uncovering a lot of wrong doing.
The internal disciplinary case will be held this month end, from the 30th August to the 2nd September 2010, and it is hoped that the matter can be settled once and for all.
The charges related to the suspended director of infrastructure, Monde Juta are as well intrinsically linked to the one preferred against the suspended municipal manager and his case will run parallel to the one of the suspended municipal manager.
The following is a detailed account of progress related to the implementation of Section 139.
The implementation of the Section 139, albeit successful so far in terms of bringing communities closer to the municipality and some pockets of service delivery success, it is also marred by internal challenges like any other learning organization. The importance to the latter is what are we doing with these challenges, and that will be outlined at a later stage.
Municipal Budget
The Council has approved its 2010/11 budget in May 2010 per Council resolution number A.1192. Due to the financial position of the municipality, and consistent with the approved Financial Recovery Plan for Madibeng the budget was restructured with the assistance of the National Treasury Personnel and the DBSA finance specialist. The Financial Recovery Plan, has
been prepared as a discretionary provincial intervention in terms of Section 136 of the MFMA.( to be dealt with later)
The initial operating budget that was approved is R811,556,499 and the revenue approved is R811,707,99.The revised operating budget expenditure is R552,778,990 whilst the revenue is R589,230,404.The operating revenue is reduced by R222,477,590 and operating expenditure by R258,777,509.
The route followed was of the cash based budgeting. The revised budgeted anticipated revenue to be collected is based on the actual collection on services and property rates for 30 June 2010 standing at R359, 816,404.
Whether the budget had to be restructured because of the administrative ineptitude or to realize a cash backed budget, is neither here nor there. The important thing is that, through the collaborative efforts of all three spheres of government, for the first time and as part of turning around Madibeng, the Council has a cash backed budget, supported by a plan to radically improve the financial situation of the municipality.
Creditors will be paid what is due to them, focus will be on service delivery and very soon ( depending on our financial performance ) the historical debt of Sandspruit and PIC Loan, will be a thing of the past.
The directors were advised to take precautionary measures when procuring goods and services in order not to commit outside the total available budgeted expenditure. The spending focus should be on the service delivery related items, services that generates revenue, Sandspruit outstanding
authority billing payment of R36,000,000 and PIC loan of R40,000,000 for 2011 financial year.
On the restructured budget the PIC loan repayment is reduced to R20,000,000 and Sandspruit outstanding authority billing debt of
R36,000,000 was reduced to R18,000,000.The remaining 50% of both PIC and Sandspruit will be addressed in January 2011 through the budget adjustment.
The remaining amount of R36,451,414 is earmarked to address the backlog payment to creditors. The municipality is expected to make an arrangement with the suppliers on payment terms.
In order for the municipality to recover financially on the short term, there are certain measures that have been agreed upon to keep the expenditure at acceptable levels:
•Council agendas to be distributed by e-mail or CD except for the 20 PR Councillors
•Water tankers and refuse trucks to be procured immediately
•Overtime prioritised only for essential services and critical revenue enhancement positions.
•Indigent Subsidy scheme will be reviewed on additional indigent registration including rural areas.
•Chemicals for analytical purpose to be increased in January 2011
•Fire and Health division expenditure to be claimed from Bojanala district as part of the recovery plan.
•Bulk purchases of water to be reviewed in January 2011
•Telephone :All pins for officials and councillors be cut including speed dials for both officials and councillors. Only speed dials for businesses to remain.
•Cell phone allowance for councillors to be soft locked to reflect monthly allowance. Cell phone contracts with the service providers not to be renewed after the expiry date.
The total approved capital budgeted is R318,158,622 and was reduced to R172,031,000 by R146,127,622.
The restructured capital budget mainly focuses on the total gazette capital funding per DORA and the confirmed allocation from the district, funds available from call account initially earmarked for the land purchase.
The projects removed from the capital budget will be re-instated through the adjustment budget in January 2011,should additional confirmation for funding those projects be received.
The total budgeted for MIG is R132,350,000 as per DORA,R6,000,000 is from the call account land purchase, whilst the R3,800,000 is from Bojanala
Municipal Financial Recovery Plan
As a municipality we have experienced significant financial challenges which have negatively impacted on our financial sustainability and the delivery of services. The poor financial situation has resulted in the Municipality placing heavy reliance on grants to support its operations. This has made it difficult for Madibeng to sustain its infrastructure programme to address backlogs which should enhance its capabilities to raise sufficient revenue to meet contractual obligations. As such the Municipality is now faced with serious revenue shortages resulting in cash flow problems, delays or defaults on loan commitments, and failure to deliver basic services, such as water, sanitation electricity and refuse removal.
The Madibeng Financial Recovery Plan which was jointly prepared by a Technical Team of officials from the municipality, national and provincial treasury and DBSA has clear strategies to turn the financial situation of the municipality around.
It is a very critical document that also openly acknowledge our weaknesses and challenges on how the finances of the municipality has been badly managed, but to us a good start is when one is able to acknowledge his/her shortcomings, in order to develop sustainable and efficient solutions to the problem.
There are several strategies adopted, including but not limited to
•Restructuring the Budget
•Revising Tariff Policies
•Revenue enhancement
•Sale of non essential assets
•Financial administration and discipline and cash management strategies
•Human resource management
This is going to be the Development Bible for Madibeng over and above the IDP and Turn Around Strategy, which for now there is an attempt to
harmonize all the strategies and plans, to realize quick results, whilst finally working towards having a vibrant, viable and sustainable Madibeng Municipality.
It will take time but it requires the commitment of all of us as, councilors, official and residents not only to commit to the plan but drive it as well.
Workshops will be held soon to engage communities, but the most important thing is for communities to understand that we have to operate with a realistic budget and that will result in the Municipality having to postpone some of the capital projects, so that we do not over commit the municipalities and bankrupt or creditors.
Service Delivery
We have finalized the purchasing of water and waste tankers, which are expected to be delivered some time during the course of this week. This will create a huge monthly saving of more than R5m for the municipality. Our aim is to continue to buy more tools of trade in order to improve service delivery.
We have experienced a huge financial loss as a result of outsourcing services including contingent liabilities as a result of our inability to service some of the contracts that have ballooned over time. “This should be a thing of the past.”Letsema Programme
Recently had our own cleaning campaign called Letsema programme through which we were able to offer temporary employ to municipal residents in 21 wards of the 31. A stipend of R70-00 was offered to those who got an opportunity to be part of this programme. The programme involved cleaning cemeteries, open spaces and side walks.
The impact of the programme is positive in terms of poverty relief and service delivery. The programme will be reviewed from time to time.
Water Cuts
We are in the process of compiling a new indigent register with the assistance of relevant officials particularly in Odi 1 areas such as Kgabalatsane, Hebron, Klipgat, Erasmus, Oskraal, etc. After this process has been complete we will install meters and begin to bill consumers accordingly.
We have been able to pay Tshwane Metro April and May invoices still awaiting to be billed for June and July.
Our Communications Unit was in a joint meeting with Tshwane Communications on Monday to agree to issue out common statements in relation to water cuts, and other challenges faced by our communities in Odi 1 areas.
However there is a budget allocation to connect to the rand water pipe in the Tshwane Area to service Hebron, Kgabalatsane, Rockville areas and R10m put aside for klipgat water Reticulation Project.
Brits Wastewater Treatment Works
Together with Council, we have declared the waste water treatment works a disaster and an emergency. The plant is not fully operational and it is a ticking time bomb.
We have engaged the services of well experienced consultants to assess and give us a plan to remedy the situation. The costs are estimated at R21m.
R6m has been set aside and committed by the municipality for now until January , when the adjustment budget will be done.
Lonmin has joined the party to support the municipality, and are in a process of determining how much they can avail to support us. We are calling upon other responsible citizens and companies to join us in addressing this disaster.
We have also approached the national department of water affairs and Cogta for financial support and the matter is receiving attention at the highest level.
Parallel to the matter we have engaged professional for the classification of the sludge to determine the most appropriate disposal methods, given allegations of chlorine risks. These in itself will have to be costed separately as a project.
Recently there were newspaper reports that President Zuma and Minister of Water Affairs Buyelwa Sonjica are facing charges in terms of Section 151 of
the National Water Act in a bid to get them to answer for rampant pollution in the Hartebeespoort area.
Let me hasten to mention that this matter is with DWAF and it is being handled at that level and we are closely monitoring the situation. However in respect of the aspects of the pollution that has to be attended by Madibeng, part of it has been to sort out the historical problems of the Brits Waste Water Treatment Works.
We have also completed an audit of the pump stations in Hartebees Areas with the help of the HIF and have started to attend to some of the neglected maintenance problems. Same is been done in the Brits area as well, and these will be used to determine our maintenance plan.
We have two engineers seconded by DBSA and another two by the national department of water affairs ( i.e 4).
Water Purification Plant
R20 m has been allocated for the refurbishment of the plant before any upgrading can be done. Due to lack of capacity in the municipality, the administrator ceded the project to the national department (water affairs) for implementation. The municipality will play a monitoring role. The latter will ensure the plant operates with full capacity and address part of the water losses reported to be at an alarming rate.
Another R85m has been allocated to the project during the 2011/12 and 2012/13 for the upgrading of the plant.
Potholes
We are presently fixing potholes in and around the Brits and Hartebeespoort area, this is a very serious challenge and we are engaging the province as some of these roads are provincial and national roads.
Electricity
As for electricity we have completed the electrification of Oukasie Extension 5 , phase 1, a total of 500 house connections has been done to the project value of R2,5m. Funding has been received from the Department of Energy
the project is managed by the municipality. It was started in April 2009 and it got completed in June 2010.
Presently as a municipality we are experiencing some financial cash flow constraints in terms of electricity plans. We are however, envisaging implementing a further 500 houses electrification in Oukasie Extension 5 Phase 2 at the beginning of 2011 through the assistance of Energy Department.
Human Resource Matters
To date policies presented to Council for approval include:
Staff and Skill retention
Occupational Health
Employee Exit
Career or succession
Recruitment, selection of personnel and procedure
The verification/ auditing of qualification of employees has been continuing smoothly with some minor challenges here and there. The report has been presented to the Local Labour Forum for consideration.
The result shows a need that the critical vacant positions be filled in the Technical Department and Budget &Treasury Office as a matter of urgency.
We have requested the HR Department to engage in a process to verify the staff establishment to check the possibility of payments to ghost employees. A report was tabled before council.
On the political front
All portfolio committees and other committees of Council are functioning as expected with some challenges here and there, but there is commitment from Councilors to work harmoniously with the Administrator
On the Acting MM and CFO
It is important to note that the alleged R400 paid to Avis, was what we owed Avis at that time as a municipality. Whether that had to be paid through a
laptop in Cape Town or by someone sitting in the municipality, the fact is, at some point it will have to be paid. Truth is, the municipality is so heavily indebted that some of the outstanding payments you hit them along the way
and depending on circumstances and the cash flow situation of the municipality, whoever has the authority to effect payment will do so( acting within his/her authority) and reporting accordingly.
The Travelling and Subsistence Amendment Policy of council was last approved in 2003. The said policy provides for exceptional circumstances with regards to travelling by air, train and others.
And it can be confirmed that there was no Pajero that was used during the trip and the 4x4 was also used as a common transport by both the Administrator and Acting CFO.
However, in view of the Financial Recovery Plan, we will be revisiting the travelling and subsistence policy and other policy that has a financial bearing on the municipality in order to regulate the spending patterns and reduce costs.
The Acting MM, Mr. Bosielo has been appointed and seized the responsibility of an accounting officer and head of administration. The latter functions were performed by the Administrator after the restructuring, which was not an ideal situation and someone had to be appointed to hold the fort.
Mr Bosielo’s CV is also available for anyone interested, and I hope the kind of support that I personally received from all quarters can be extended to him, without prejudice.
At the end it is possible that there may be certain things that we are not doing well as expected, but we thank everyone who has become our ears and eyes on the ground and do not hesitate to criticize us , as the latter can only service to strengthen the intervention and turn the situation around.
At Last Transparency At Madibeng But Employees And Councillors Have To Tighten Their Belts |
