Serious financial challenges facing Kouga Municipality

Since taking over Kouga Municipality in August 2016, the DA led Council under Mayor Elza Van Lingen has discovered that there are a number of financial claims and serious matters of non-compliance hanging over the municipality like a dark cloud.

“The most serious instances are a R 46 million water bill owed to the Nelson Mandela Bay Metro and R 13 million owed to the Department of Labour,” said Van Lingen, who issued the following report:

Old debt to Department of Transport

The municipality failed to pay over drivers licence monies to the Department of Transport for several years under the two previous Councils. At the time of the 2016 election, the outstanding amount stood at about R11 million. We are paying this off in line with an arrangement made with the Department.

R 46 million water bill from Nelson Mandela Bay Metro

Following the election, the new Council was shocked to find that the Nelson Mandela Bay Metro had issued Kouga with a water bill for R 46 million.

This was in addition to the monthly water bill. According to the Metro, Kouga had been under-billed for water usage between 2012 and 2016.

The bill had been issued to Kouga in May 2016 but had not been disclosed by the previous Council. Negotiation with the Metro regarding the bill is ongoing.

Court case regarding the 2012 St Francis Bay canal fire

A court case that the municipality is defending could potentially cost the municipality between R 30 million and R 40 million. The claim arises from the 2012 fire that saw scores of houses being razed to the ground in the St Francis Bay canal area.

R 13 million bill from the Department of Labour

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In July 2017 the Council was confronted with another shock bill. Dating back 10 years and totalling R 12,62 million, the bill was for Return of Earnings (RoEs), required for what is commonly known as “workmen’s compensation”.

The municipality hadn’t submitted RoEs from 2007 to 2016. This meant that municipal employees did not have proper cover for Injury on Duty claims for almost ten years.

The municipality has since come to an arrangement with the Department for workmen’s compensation to be reinstated and is negotiating paying off the outstanding amount.

Sheriff of the Court

The municipality lost various cases against aggrieved employees prior to August 2016 but failed to pay out the awards that had been made to those employees.

As a result, we have had to deal with several old labour claims over the past year while the municipality also almost lost nine of its vehicles because of this failure.

On 20 July the Sheriff of the Court arrived at Kouga’s workshop to attach a truck and eight bakkies in terms of an execution warrant that had been granted in favour of two aggrieved employees who had won their case against the municipality in 2015.

The Labour Court had made an award to them, but this was never paid.

The municipality had to pay R 152 000 to avoid the vehicles being removed. This included the award money to the employees, as well as court and sheriff charges.

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