Serious financial challenges for Kouga

Rochelle de Kock

The Herald, 30 September 2011

THE Kouga Municipality denied yesterday it was bankrupt, although it admitted it had “serious financial challenges”.

This follows allegations by the Jeffreys Bay Residents’ Association that the municipality was insolvent, with expenditure and debts far exceeding income.

Kouga municipal spokeswoman Laura-Leigh Randall said the new council had inherited serious financial challenges. The council had already drawn up a recovery plan and the situation had stabilised, she said. “Our biggest monthly creditor is Eskom. The municipality did owe Eskom money, but the debt is now fully paid up and our account is 100% up to date.

“We do owe R21-million to the Nelson Mandela Bay Municipality for water, but we have a payment arrangement with them and have been honouring this every month. The salaries bill was 42% but the new council has cut this down to 36% of the monthly budget. This is in line with national guidelines.”

 She said the new council had in July commissioned an investigation into allegations of financial irregularities and a report had been received earlier this month.

While the report has been tabled before the council, it has not yet been made public.

Trevor Watkins, chairman of the residents’ association, said earlier this week a meeting of the association, mayor, municipal manager and other officials last week had revealed the municipality’s financial position was dire. He said acting municipal manager Sydney Fadi had admitted the municipality owed quite a few creditors a lot of money, and only a fraction of those debts could be paid each month.

He said: “The [municipal manager] stressed the Kouga Municipality was determined to make a full recovery of all mismanaged funds.”