The Maluti-a-Phofung municipality in the Free State is drowning in financial troubles.
Communities have been without electricity for days and the quality of other services is worsening.
The municipality has consistently been ranked among South Africa's worse-run councils.
The Maluti-a-Phofung municipality in the Free State is on the brink of complete collapse, with neither money nor electricity.
Now power utility Eskom wants to move in and take electricity distribution, which includes revenue functions, away from the municipality.
The move has irked the SA Local Government Association (Salga), which believes the plan will be detrimental to the municipality.
In a statement, Salga said the proposed active partnering agreement between Eskom and the municipality purported to assist the council with operational challenges to secure a revenue stream and enable payment of the bulk electricity account.
It is intended to take over the electricity distribution function, including all revenue related to the functions, away from the municipality, Salga said.
But it added: "Salga believes that the distribution agency agreement is only fuelled by one party's needs and is not sustainable for all parties entering the agreement and neglects the fundamentals that electricity is an important funding source for local government."
Tebogo Hlakutse, Salga energy and public works working group chairperson, said: "We appreciate the challenges faced by some municipalities in discharging their executive and service authority function over electricity.
"Salga supports that a sustainable and balanced active partnering agreement with Eskom or any entity which has the capacity to provide the electricity distribution services be in place to provide sustainable and reliable electricity services to the communities."
The municipality consists of towns such as Kestell, Harrismith and QwaQwa.
Salga believes the current Eskom distribution agency agreement is not serving the needs of Eskom and the municipality equally and fairly.
"Of particular concern is the financial sustainability of the municipality once Eskom takes over the electricity distribution function, including all revenue related to the function. The distribution agency agreement also requires the Maluti-a-Phofung municipality to pay back the full debt amounting to almost R6 billion, as well as additional service fees, Hlakutsa said.
"Further to this, if Eskom were to be appointed to be the service provider on behalf of the municipality, it needs to do so using the process legislated by the Municipal Systems Act, where Eskom as a service provider or agency will be expected to comply [with] the by-laws of the municipality where credit control, surcharges and other matters relating to electricity services are concerned," he said.
Meanwhile, the DA has warned that the municipality's financial woes have worsened.
It is struggling to pay salaries, and communities go without electricity for days.
DA councillor Alison Oates said the municipality's budget was accepted on the basis of a promise that all political parties would support a financial recovery plan.
"Regrettably, this did not occur. The municipality's inability to manage its finances has resulted in a breakdown in community service delivery, which has deteriorated the area's infrastructure. As the cost of living has affected millions across the nation, it is ridiculous that mismanagement has led to hardship across the poorest areas of this already struggling country," Oates said.
Efforts to contact the mayor and officials were unsuccessful.