Umngeni Local Municipality mayor Chris Pappas is calling for an overhaul of the funding model for municipalities, stating it is depriving them of key resources when they have to carry the bulk of government work.
Pappas said the current review of the White paper on local government being discussed and led by the Department of Cooperative Governance is unlikely to ease the challenges faced by municipalities.
The review process of the white paper will examine the funding model of municipalities and could lead to the closure of municipalities that are failing to provide services.
He explained that as a result of the funding challenges, municipalities are hampered on several fronts. They are battling to deliver the services required because of a lack of funds and cannot hire the very best talent to help them develop.
“Municipalities are facing serious challenges when it comes to this. For instance, we cannot hire the very best because we have a limit on how much we can pay, and even when we do get the best, they are poached by other municipalities that can pay better or by the private sector,” he said.
He mentioned that for a top official, he can pay a package of a little over a million, while the private sector can pay close to R2 million.
“In my municipality, we had hired a CFO who would have done great things for the municipality, a talented lady. She resigned on the same day she was hired because she had gotten a better offer from a bank; she worked here literally for six hours,” he added.
In another example, he said, “One of my most experienced officials handling a variety of specialised fields recently left for another municipality where he was to take up a middle management position for more money. He is being paid more and has less stress.”
Pappas stated that the general funding model for local government is flawed. He added that local government has handled everything; businesses are in the local government, they draw services from local government, but the money they pay in the form of taxes goes to the national government, and only 9% of that returns to local government.
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