ENOCH Mgijima Local Municipality (EMLM) acting municipal manager (MM) Siyabonga Nkonki has placed a moratorium on spending.
In a circular dated March 9 in possession of The Rep, Nkonki said the municipality found itself in a “financially unfortunate situation following the transition as a result of the Demarcation Board to merge [Lukhanji, Tsolwana and Nkwanca] and the employee strike that took three months without any form of collection”.
This, he said, had led to consequential financial strain on the budget and required drastic and stringent measures “to create business unusual (sic)”.
“A moratorium is proposed for implementation in some of the operational budget items to avoid a crisis of not paying salaries at the end of the month.”
The municipality is suspending all catering that is not grant funded and allows only for catering of the Ordinary Council (meetings), attendance of events and seminars, except those funded by grants and travelling and accommodation expenses.
“Officials and politicians are requested to travel on the day of the event, especially if it is in East London and drive back the same day. No sleepovers if the meeting is for one day.”
He said included in the suspension on spending would be donations and sponsorships “of any kind”, and promotional material.
The municipality would also not be spending on office furniture, laptops and iPads, while a halt would be put on refreshments for directors and executive offices and the procurement of cleaning materials would be properly managed.
“The travelling and accommodation of employees who are receiving bursaries from the municipality, will be borne by the official or councillor concerned on their attendance (sic)”, the circular indicates.
He said the situation would continue until the municipality raised enough income to reduce the deficit.
Nkonki said the municipality would “lock” the votes of the items mentioned and there would be no requests submitted to the chief financial officer Nomthandazo Ntshanga.
Ntshanga is currently working her notice month after tendering her resignation at the beginning of this month.
Employees were requested, in the letter, to respect the decision of the budget moratorium as it was best for the institution.
Payments for creditors and sundries would be made on the last day of the month, except for payments relating to grant-funded projects or programmes.
Communications manager Fundile Feketshane confirmed the circular, adding that a lot of line activities had been cut from the budget during the budget adjustment to ensure focus on the provision of sustainable quality services.
He said the municipal collection rate was gaining momentum and appealed to customers to effect payments.
“Everyone owing [money] is called upon to partake positively so that in the end, EMLM is able to invest back those monies.”
Asked about the upcoming strategic planning session at Mpekweni Beach Resort in Port Alfred to be held despite the financial challenges, Feketshane said the session would “emerge” with draft five-year objectives and strategies that would culminate in draft IDP, budget and related policies.
He said the needs of local people from the 34 wards would be prioritised. He said due care and diligence had been applied in choosing the venue and ensuring that it was in line with the budget in that vote.
“We are a municipality that reasons and works within the prescripts of the law and we are subjected to the principle of legality.
“Budgetary constraints must be understood in context – in that all line items are budgeted for and we focus on those crucial issues that will help develop the municipality,” Feketshane said.