The country’s second-oldest town stands to lose 15 percent or R22 million of its current R146-million budget if the national government calls a halt to all transfers.
On Monday, the mayor warned that the municipality would not be able to deliver water, electricity, maintain its sewers and build houses for the poor if its funding were to dry up.
The municipality was reduced to chaos last year when angry residents blocked the N2 and looted shops over political infighting at the council and poor service delivery.
The DA controls the municipality in a coalition with the ACDP, which has the deciding vote.
Both the ANC and the DA have four seats. Last year the coalition almost fell apart when ACDP councillor Julian Matthysen, who had been fired from his party, tried to help the ANC unseat the DA. The DA went to court to reaffirm its control of the council.
Chaos in Swellendam led to Co-operative Governance Minister Richard Baloyi stepping in. He appointed officials from his Pretoria office, along with a provincial government administrator, Graham Paulse, to help with the running of the town.
The national Treasury dealt a blow to Swellendam in the past week when it said it would stop all transfers if the municipality did not get its books in order.
“If the Treasury continues to takes this approach with Swellendam, we will have to close our doors pretty soon,” said Swellendam mayor Nicholas Myburgh.
He admitted that the municipality could not get its finances in order because it did not have enough people in the finance department.
“We couldn’t appoint the correct people because of the situation in the council. We just couldn’t agree,” he said.
ANC councillor John Nortje said the responsibility lay at the feet of the DA and Myburgh. “It’s all their mistake. Myburgh didn’t attend to his responsibilities and the municipality has too many consultants,” said Nortje.
The municipality has appointed one consultant to help with its finances.
Swellendam still has not submitted its annual financial statements for the past year to the auditor-general.
Myburgh said the municipality would have to halt its R30m upgrade of its sewer works if funding dried up.
“This will also affect the building of 600 houses for the poor. If we can’t expand our sewer network to these areas, we can’t build these houses,” he said.
Myburgh said the municipality could still pay its creditors but it did have cash flow problems.
“We have approached private banks to help fund our capital projects, but they, too, are unwilling to help until our financial statements are up to date,” said Myburgh.
Western Cape Local Government MEC Anton Bredell said yesterday his officials went to Swellendam last week to look at the town’s financial statements.
“We will meet on Wednesday (tomorrow) to see how we can implement a turnaround strategy and convince the national Treasury not to withhold its funds. Our provincial treasury is already talking to national government about this and setting up meetings,” said Bredell.
“Kannaland had similar problems and we were able to find a solution. We are working to solve the problems before the next transfer.”
The national Treasury is scheduled to make the next transfer to Swellendam in March. Myburgh said the municipality would be able to turn its finances around in the next seven months if it had the qualified staff and support.