Usakos unable to settle N$2,3m debt

13 July 2018 | Government

Jessica Botes

The Erongo regional council (ERC) refused two requests by the Usakos town council to write off debt amounting to more than N$2,3 million.

During a recent ordinary monthly regional council meeting, a request was made by the town council for the ERC to consider nullifying the outstanding amount of N$1 854 566 for outstanding levies owed to the ERC. The town council has failed to pay its 5% levy of the total rates levied on all rateable properties in the town to the ERC since April 2009.

In a letter addressed to the acting chief regional officer, Seblonica Kauari, the CEO of the town council, Ivin Lombardt, acknowledged the town council’s failure to pay its levies to the ERC.

“As at this moment, council is certainly not in a position to settle the outstanding amount at once or in the foreseeable future. However, the council wishes to make the following submission for the way forward: For the ERC to consider the nullification of the outstanding amount of N$1 854 566 for the period April 2009 to February 2016 in order to relieve the council from this burden and pressure,” said Lombardt in his letter.

He did state that the town council will pay the outstanding amount for the period from March 2016 to February 2018 as soon as invoices are captured. The ERC recommended that the town council settle the current outstanding amount owed to council for this period.

“The council has taken a decision and promises that henceforth, especially for the current and future financial years, that the 5% levy will be paid duly and on a monthly basis.”

During the meeting, the chairperson of the ERC, Hafeni Ndemula, said that all the debt will not be written off, but that technical assistance will be provided to the struggling local authority.

“By providing assistance to the local authority we are not waiving its legal obligations. The 5% is a budgeted income for the ERC and must be duly paid by all local authorities,” said Ndeluma.

A second request was also made by the town council for the ERC to consider writing off its debt of N$500 000 for financial assistance provided by the ERC to the town council in 2011. The ERC rendered financial assistance towards the town council’s NamWater account.

An agreement was entered into with the town council and a memorandum of understanding was also signed on 4 July 2011. According to the ordinary monthly regional council meeting agenda the terms and conditions of the agreement stipulate that the town council would repay a fixed amount of N$100 000 in five monthly instalments, beginning five months after receipt of payment of their NamWater bill. No payment has however been received to date.

In another letter addressed to Kauari, Lombardt asks that the ERC should seriously consider writing off this debt “in the name of progress”.

“Such action by the regional council will help unshackle the town council from historical debts that only work to slow down our reform and upliftment efforts,” said Lombardt.

Council however recommended that the debt not be written off. Ndeluma also said during the meeting that the submission by the town council should be referred back to the ERC to determine a repayment plan.

“We should look at the town council’s budget again and at their income to determine how they can repay this debt and how we can assist them,” he said.

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