Already hamstrung by Eskom debt of more than R45 million, the Cederberg Municipality has been ordered by an arbitrator to pay the 4.9% salary increase that had been agreed to for its 345 employees.
To add to the municipality’s woes, Local Government, Environmental Affairs and Development Planning MEC Anton Bredell has drawn up a plan for the municipality through section 154 of the Constitution, which often leads to administration of councils.
Meanwhile, an arbitration order by Arthi Singh-Bhoopchand, seen by the Cape Argus, shows that the SA Local Government Bargaining Council oversaw a three-year wage deal entered into between the Independent Municipal and Allied Trade Union (Imatu) and the municipality. The municipality paid the wages last year, but reneged this year. It applied for exemption from the wage deal.
Queries and reminders sent to municipal officials went unanswered.
In a parliamentary reply last month, Bredell said Cederberg, Beaufort West, Kannaland and Matzikama owed Eskom more than R250m. As at August 11, Cederberg owed R48m.
Singh-Bhoopchand, a senior panellist in arbitration, ruled last week that the municipality had to pay the wage increases in full for this financial year.
Welcoming the ruling, Imatu said: “The arbitrator found that whereas the municipality has financial challenges, the municipality has chosen to honour a number of other financial commitments and is seeking to use exemptions as a first port of call as part of its cost-cutting measures.”
Asked whether he was considering placing the municipality under administration, Bredell said he was aware of the serious financial problems.
He said there were several meetings between the provincial department and municipal officials “to arrange for targeted support in terms of a section 154 of the Constitution to be provided to the municipality”.
His spokesperson, Wouter Kriel, said Bredell had issued the municipality with correspondence on September 7 in compliance with section 136 of the Municipal Finance Management Act, which allows the MEC to “formally consult the mayor of the municipality to determine the facts and assess the seriousness of the situation and the municipality’s response to the situation relating to the financial problems being experienced”.
Bredell said the municipality’s response was due on September 27, after which “all relevant information would be assessed in consultation with Provincial Treasury”.
“A section 154 of the Constitution support plan has been developed and a workshop has been scheduled for 29 September 2022 to consult and engage on the support plan, whereupon it will be finalised for implementation,” he said.
The Imatu statement said the municipality had entered into an agreement to repay the Eskom debt at 2.5% higher than the prime rate.
The union added that Cederberg also paid other contracted services, consultant fees and other unfunded mandates which weren’t properly motivated.
“The municipality simply chose not to budget for the wage increase and couldn’t establish that it had no other option but to do so,” the statement said.
“If the municipality applied its austerity measures fairly to other line items, enhanced its revenue collection and re-prioritised its budget, it would be able to afford the wage increase.”
SA Municipal Workers’ Union (Samwu) provincial secretary John Mcanjane said: “Instead of complying with the agreement, the Cederberg municipality took a decision to deny workers salary increases and applied for exemption only in the month of August.”
He said Samwu would monitor the situation at the municipality to ensure it complied with the ruling.
“We cannot allow a situation wherein workers and their livelihoods are sacrificed by municipalities who have failed to ensure good and sound governance,” Mcanjane said.