The financial state of the Msunduzi Municipality is coming under intense scrutiny after the embattled entity reissued a circular detailing a raft of cost-cutting measures.
Among the measures is the call to stop all current and future sponsorships that the council cannot afford.
However, Msunduzi mayor Mzimkhulu Thebolla was quick to dismiss concerns that the city’s multimillion-rand sponsorship of the Royal AM Football Club could be on the chopping block.
He said he believed the council would honour the contractual obligations it had entered into.
The Royal AM sponsorship was a controversial matter when it was approved and was subject to a legal challenge by the DA. The current status of this legal challenge could not be established on Sunday.
Opposition parties said they welcomed the circular.
The circular informed “councillors and staff that due to the current financial position of the council, the following cost-cutting measure must be implemented with immediate effect”.
The measures include a limit on overtime work; a ban on employees taking municipal vehicles home, except for those approved as they are on standby; a halt to the appointment of consultants; and a halt to all council-funded projects for the next 12 months unless it’s a compliance or emergency issue.
The circular also directs that catering be stopped at council meetings, security costs be reduced by deploying internal security to all municipal buildings, employees travel in one car to reduce claims, and revenue collections be beefed up.
One of the drastic changes proposed is that the acting municipal manager “must take decisive measures and write a report to council to stop all current and future sponsorship that the municipality is unable to sustain financially”.
African Christian Democratic Party councillor Rienus Niemand said: “The ACDP fully supports the immediate cessation of all sponsorship.
“This is and has been a criminally senseless waste of patently scarce resources. The perpetrators, i.e. the ANC officials, must be charged and the wasted money recouped from them personally.”
He said the municipality was in a dire financial state, pointing out that it had incurred R900 million of fruitless and wasteful expenditure, while the debt book is sitting at R6 billion and creditors are owed R1.9 billion and are now refusing to do work.
“Five years under administration has been a catastrophic failure. The administrators have been nothing but toothless observers and should be held accountable and replaced for sheer incompetence and dereliction of duty. The municipality is bankrupt and spiralling downward,” Niemand said.
DA councillor Ross Strachan said he doubted that the cost-cutting measures would have any impact, saying that the measures were not new and were already in existence when the municipality entered into some of the deals.
Thebolla said: “This circular is not new. It was just to remind the staff what to do. It was already in place when the contract (with Royal AM) was entered into and the financial situation of the municipality had been assessed.”
Asked pointedly whether this meant that the sponsorship with Royal AM was not affected, Thebolla was non-committal, saying: “I wouldn’t want to speak on a single item.”
The Mercury