VBS hoodoo strikes West Rand municipality: staff not paid
Employees suffer thanks to controversial R77m investment in the beleaguered bank
A Gauteng municipality that controversially invested R77m in the beleaguered VBS Mutual Bank ran short of funds to pay its employees this week.
Times Select has learnt that the mayor, councillors, executives, managers and supervisors at the Randfontein-based West Rand District Municipality, west of Johannesburg, were among those who did not get their salaries on Thursday.
Several municipality workers have confirmed that only workers on lower salary scales received their salaries.
Those affected said they began to worry after hearing rumours that there would not be enough money to cover salaries. Employees were officially informed only on Thursday that the municipality was in financial difficulty.
“Workers are mostly saddened by the money that was questionably invested with VBS. They think that money could have saved the day in a situation like this one we find ourselves in,” said one municipal worker, who did not want to be named.
“I don’t know if we’re really expected back at work on Monday after not having been paid, while debit orders and other financial commitments pile up. To worsen it all, there’s no certainty on when exactly we are getting paid. I truly believe this could have been avoided had money not been taken to VBS.”
Evert du Plessis, a councillor at the West Rand municipality and the Democratic Alliance’s regional chairperson, said while there had always been concerns that the municipality was “underfunded”, the current situation could have been avoided had the R77m not been given to VBS.
“Our understanding is that the municipality has now turned to local municipalities falling under it, such as Merafong, Rand West and Mogale City, to pay money owed to the district. They are banking on that money to cover our salaries but we’re not sure how discussions around that were going,” Du Plessis said.
“It is very frustrating for those who were not paid, very detrimental. Those millions that went to VBS would have put us in a better situation on a day like this.”
Cooperative Governance and Traditional Affairs Minister Zweli Mkhize recently told a parliamentary portfolio committee that the same municipality invested conditional grants with VBS.
Du Plessis asked: “How do you invest money meant to fund programmes?” He said those who decided to invest with the now troubled mutual bank might have “thought they would make a quick buck out of it, but look at where we are now”.
“From my own perspective I’d say: if we were a business we would have been liquidated as things stand at the moment,” Du Plessis said.
Times Select has seen an internal memorandum to employees explaining the situation at the municipality.
“The municipality, having done all that was required of it to secure the release of funds, has not to date received the promised funds. As a result, the municipality will be unable to meet the full commitment on salaries for all employees,” said a memorandum dated October 25.
“We have carefully considered the funds in hand and will be processing payment of salaries for all employees from level 15 to level 7. These salaries will be paid by 25 October 2018. All other employees will hopefully be paid by no later than 30 October 2018. We still do believe that the assistance envisaged from our stakeholders will be granted and the situation with the financial situation of the municipality will be stabilised soon.”
Municipal manager David Mokoena said the municipality has “experienced a shortfall of funds and could not run the complete salary bill”. Asked if the municipality was broke, Mokoena only said “no” without explaining any further.
He said the municipality was in the process of securing funds from “both national and provincial spheres of government”.
The municipal manager explained that West Rand had a workforce of 458, including councillors, and that only 318 were paid this week.
He could not say when they were expecting to have secured enough money to settle outstanding salaries.