Cash-strapped Gauteng municipality finally pays staff - but must 'restructure' to stay in business

The Rand West City local municipality paid its employees on Monday morning after about 50 workers gathered outside the offices after not receiving their salaries.

"What resulted in us failing to pay salaries on time is strictly because we got a liquidity cash problem … The second thing, we were able to receive some money from businesses which owed the municipality. As I speak to you, all employees have received their salaries," municipal spokesperson Tshidiso Tlharipe told TimesLIVE on Monday afternoon.

"We want to put our apology to the employees of the municipality about the unfortunate incident that took place of us paying them late."

The employees wanted to meet with municipal officials to ensure they got their pay, which they received around 10am.

Municipal manager Themba Goba said on Monday in an internal letter seen by TimesLIVE: "The municipality is able to pay salaries with or without equitable share and will continue to pay salaries without any challenges. Yes, there is a delay and system challenge experienced by National Treasury in paying equitable share to our municipality.  The municipality however has various sources of revenue that has always assisted it to pay salaries."

Tlharipe said the financial and liquidity problems come from "low levels of the collection of rates from our residents".

This in turn puts them in a tight spot in paying service providers including Eskom and Rand Water.

The municipality has to restructure to stay afloat, including reviewing all their contracts with external contractors, Tlharipe said.

"The way things are, we will not able to sustain the institution … The meeting is going to sit to review municipal contracts before the end of this week."

DA ward councillor Doneven Cloete said the employees went to the office to make a "statement to check if they will receive their salaries".

According to National Treasury’s municipal data, in 2016/17 the municipality only had enough money available to cover a month of operating expenses and just over a quarter (27.%) of the budget is spent on salaries and wages.

Just over 30c in every rand is collected from the central government and the rest is generated locally.