Municipality sunk by unpaid rates and wage hikes

A R10-million salary bill increase in one year led to the collapse of the rural Great Kei Municipality.
A R10-million salary bill increase in one year led to the collapse of the rural Great Kei Municipality.
Image: GETTY IMAGES

A R10-million salary bill increase in one year and the failure by businesses and homeowners to pay their rates in years, led to the collapse of the rural Great Kei Municipality, which covers the popular tourist region.

The municipality, with four small seaside towns – Morgan’s Bay, Haga Haga, Chintsa and Kei Mouth – has collapsed and failed to pay its creditors and workforce for more than two months.

In an interview, Great Kei mayor Loyiso Tshetsha placed the blame for his municipality’s collapse on the non-payment of rates by a number of businesses and a salary bill increase.

“In the years between 2014 and 2016, a lot has happened where a number of employees were promoted with salary grading of the municipality possibly not being observed, thus resulting in the ballooning of the salary bill of the municipality,” Tshetsha said.

He also blamed the previous council for the current mess . “It appears that the leadership and management at the above stated [2014 to 2016] period might have failed to assess the balance between the equitable share, and revenue collection against the salary bill. This is being affirmed by the fact that the current salary bill is way above the equitable share of the municipality,” he said.

The mayor said there was a lack of a focused developmental agenda guiding the municipality with the intent to increase its revenue base.

“A number of big businesses and farmers within [the] municipal jurisdiction have not been paying for rate[s] and services.“

This has been further exposed by [a] debt collector appointed by the municipality to help collect debt owed.” He said a number of interactions and concessions had been made with some businesses and the debt collector’s work was starting to bear fruits.

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