URBAN and rural development minister James Sankwasa says his ministry is going to take unspecified action against the administration of the Keetmanshoop Municipality as it undergoes a financial crisis.
Sankwasa, who says the council will not be bailed out with taxpayers’ money, accused it of deliberately contributing to its own financial predicament.
He says the municipality has been facing cash flow challenges for the longest time and using finances from capital development projects to fund operations.
It was reported this week that the municipality may be unable to pay its employees for October, amid mounting concerns over the council’s nearly N$100-million debt to Namibia Water Corporation (NamWater).
“This council, instead of addressing their revenue and increasing their income they are taking money from here and there to pay salaries, fund their projects and to run their operations. For years they also do not have a substantive chief executive. How does it function like that?” Sankwasa told The Namibian last week.
He said councillors and the administration need to understand that their actions and inaction have consequences that will follow “very soon”.
The minister said it was time for the electorate who voted the councillors into office to hold them accountable.
“What I also want to know is what the community will do? What did they see in these people when they voted for them?” Sankwasa asked.
The Regional and Local Authorities Act of 1992 gives the minister authority to appoint administrators for local authorities in the absence of functioning leadership and or to dissolve a council.
Keetmanshoop mayor Emrico Blaauw has confirmed that the municipality is facing severe cashflow challenges but denied reports that it will not be able to pay salaries for October.
Blaauw says rumours that the council cannot pay salaries are being spread “by aggrieved employees of the council”.
He says the council will pay salaries today using funds from its operational budget and revenue generated through arrangements with stakeholders.
He says the council is applying their debtors and creditors policies to ensure they generate revenue to honour their obligations.
According to the mayor, the council pays NamWater almost N$3 million a month towards its outstanding debt, which has fallen from more than N$100 million to about N$80 million.
Blaauw says after NamWater installed the pre-paid meter for the town, the water utility reportedly did not waiver the interest as per the debt recollection agreement.
He says, despite its financial challenges, the council had to write off more than N$12 million in debt owed by elderly residents.
He says water losses stem from old asbestos pipes in the reticulation network, through which the council loses about 40% of the water it buys each month.
A leaked council resolution dated 21 September shows that the council approved the use of available Built Together Programme funds, where permissible, and outstanding money owed by Keetmanshoop Electricity Business Unit to meet the September payroll.
