The municipality has struggled to pay workers, creditors and councillors several times this year, owing to various issues hampering its financial stability. 

In a letter, the new acting municipal manager, Zolile Lobe, says payments would be made on 10 December. 

“As a norm, good practice suggests that the employer should inform employees timeously of any anticipation of a delay in the payment of salaries. 

"The employer had been given assurance that financial assistance will be provided to the Kopanong Local Municipality from provincial departments to be able to pay salaries on time, hence no communication was advanced to the staff component. 

"However, due to reasons beyond our control, the assistance could not be effected on time,” says Lobe in the leaked letter.

The municipality is among others in the Free State that struggle to collect enough revenue from services rendered. The municipality's debts amount to millions of rands.

ALSO READ: Free State municipality's bill is R12,2m but it collects R2,5m

OFM News previously reported that according to Premier Sisi Ntombela, the municipality has a month-to-month salary bill of at least R12.2 million, whereas they can only collect a mere R2.5 million in revenue.

She mentioned that this troubled municipality owes the South African Revenue Services (SARS), Eskom, and Bloem Water over R500 million.

“They are using the government’s conditional grant which should have created jobs for the people and they are using it to pay the salaries. And it’s a legacy. The mayor and councillors are trying everything. They don’t even have section 56 managers because they can’t pay them,” she added.

The municipality also owes over R20 million to the pension fund of the South African Municipal Workers Union (Samwu), which emanates from 2012.

In June this year, a total of eleven cash-strapped Free State municipalities reportedly approached the provincial departments of Finance and Cooperative Governance (Cogta) for a bail-out merely two months after the 2021/2022 financial year-end. 

The municipalities, which include Masilonyana and Kopanong, have failed to pay workers’ salaries or meet their monthly obligations among other issues.

ALSO READ: Eleven Free State municipalities beg for bailout

In October this year, MEC for Treasury, Gadija Brown, announced that cash-strapped Free State municipalities, who often failed to pay the salaries of employees, will not be receiving bailouts from the provincial government anymore.

Brown said all provincial departments have reached a directive from the National Treasury that municipalities would not be bailed out anymore, instead they have been encouraged to stimulate and enhance their revenue collection campaign to ensure that workers and services are paid.

ALSO READ: No more bailouts for broke Free State municipalities – Treasury

"Our economy, as we all know, is under huge pressure. We know that it is related to Russia and Ukraine challenges that we are seeing. Inflation has gone up, we find that the debt [in relation] to the Gross Domestic Product (GDP) has gone up and we are looking at a deficit of 15.9% - not only at the national level but also at the level of local government. 

"And what we have encouraged our municipalities to do first and foremost, is to drive the restricting of the economy so that we can have more people working, paying taxes and rates within the economy, to assist with that budget deficit.

"In terms of salaries, when we looked at the budget at the beginning of the year, there was sufficient equitable share to sustain salaries across the financial year and we also encouraged municipalities to do that. 

"Historically what we've found, was that there would be a cross-subsidy against the conditional grant and equitable shares, and that placed pressure on the equitable share to pay salaries. 

"The national treasury has given us the guidelines - we do not do bailouts. So, the issue of the bailout to municipalities no longer exists and it has been a huge debate because the people are contributing to that local economy which then brings back the issue of rates and taxes, so you are caught between a rock and a hard place, unfortunately. 

"So, what we are trying to do with municipalities is that we are trying to get them to a point where they can go out to bank and do a loan until the salaries process is concluded, based on the current financial year,” Brown said.

OFM News