The DA-led Modimolle/Mookgophong municipality in Limpopo has been placed under administration by the provincial government as it is technically bankrupt, among other reasons.
The decision was taken at a meeting of the Limpopo provincial executive council on Wednesday.
The municipality is one of several hung councils in SA that have been governed by coalition governments since the 2016 local government elections.
The ANC lost its majority in the council in those elections, even though it received the largest number of the seats in the council.
The DA, the EFF and the Freedom Front Plus voted for a DA mayor, and the municipality had since been governed by a coalition government that depended on the EFF’s votes to pass any motion with a majority if the ANC did not also support it.
Premier Stan Mathabatha’s office said after the meeting that the executive council had resolved that the municipality must be dealt with according to section 139(1) of the Constitution, which sets out how a provincial executive may intervene when a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation.
The provincial department of co-operative governance, human settlements and traditional affairs still has to determine which subsection will apply.
Dissolving the council is not one of the options the provincial government was considering, the premier’s office said.
The provincial treasury will undertake a forensic investigation of all municipal activities to "determine the extent of the challenges and remedial actions necessary to be undertaken".
The province said the municipality had experienced "serious institutional, financial and governance challenges since its establishment on August 3 2016".
It said the municipality was characterised by a high vacancy rate at senior management level, and was technically bankrupt.
The municipality owes Eskom more than R260m, the biggest debt to the utility in the province, and the debt owed to the Magalies Water Board exceeds R12m.
A rapid assessment team, mandated to provide a report on the state of affairs in the municipality, confirmed that the "state of governance in the municipality is worsening, and the municipality will soon collapse if no immediate action is taken".
The municipality had not been able to honour its financial obligations, including the payment of salaries and third-party obligations on May 25, and the situation was likely to continue while the municipality was stabilised, the premier’s office said.
Mayor Marlene van Staden said she welcomed the assistance from the province.
She said the decision followed several appeals for help from the mayor to various provincial and national departments in light of "serious institutional, financial and governance challenges" faced by the municipality.
These included requests for help with regards to the validity and duration of the previous municipal manager’s contract.
She said the new council had inherited a municipality that had serious systemic challenges after years of maladministration and financial mismanagement.
"Since its election in 2016, the new council’s ability to conduct oversight over the financial affairs of the municipality was severely hamstrung by the inability or refusal of senior officials to report to the mayor, executive committee and council on a regular basis," Van Staden said.
She expressed confidence that, with the assistance of an administrator and a support team, the municipality could enter a new phase of financial stability, increased service delivery and infrastructure development.
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