The struggling Amahlathi Municipality in Stutterheim has paid its employees and councillors for the month of May, but a question mark remains over whether June salaries will be paid on time.
The Municipality was named on Wednesday by the SA Municipal Workers Union as one of at least 30 distressed municipalities who are unable to pay their employees.
Last month, Amahlathi Administrator, Dr Sindisile Mclean, wrote to banks and creditors advising that salary payment for May and June would not be made because of the financial challenges facing the municipality.
However, he committed to back-paying the salaries at the end of July when they receive their equitable share from National Treasury.
DA councillor Richard Pickering says they've been warning the Municipality for the past few years that they would be hitting a wall.
He says he believes they're in the sticky situation because Amahlati has been spending excessively, including paying R90-million for machinery which was later repossessed.
Pickering says the municipality was under the impression that they bought the machinery when in fact they were only renting it.
Here is a letter that was issued to Banks and Creditors in May:
