“New” “Top” “Team”, three adjectives that truly don’t describe the facts

“New Kouga top team to tackle challenges, but residents need to honour their obligations as well” – Kouga’s attempt to provide a non-answer

A promise was made to both demonstrators and the media that a response to the memoranda of grievances would be made within 14 days. Thus far the only response that has been brought to my attention is a statement written as a media report. The spin doctoring at Kouga appears to have taken the last two weeks to deliver a statement which is devoid of any relevance to the memoranda delivered to the mayor on the 12th September and the complaints raised on the 19th September. Clearly the mayor merely intended to take 14 days to write what could be done in 3 days.

I believe an ad seriatim commentary is in order – even if it makes for a lengthy read devoid of elegance. For numerous reasons I have decided to personally write on the response rather than have an official JBRA response – a more elegant less Paul-esque – response is probably in order for the 3rd October when we honour our responsibility towards the municipality so that quality services can be delivered by visibly denouncing the nonsense that the mayor is attempting to feed.

The grievances submitted by residents at two recent marches to the municipality’s offices in Jeffreys Bay are being addressed by the Kouga Municipality’s new top management team as a matter of urgency.

The same urgency with which correspondence is attended to? Or the Gobodo report for that matter? What new management? How has the management of Kouga changed in the last three months other than that acting appointees have been told that the appointment is final and litigation on the appointments has followed the patent misconduct of the mayoral committee?

This is the assurance of Kouga Executive Mayor Booi Koerat, who also called on residents to honour their responsibility towards the municipality so that quality services could be delivered.

Koerat has lost all credibility to make assurances by failing to deliver his promised turnaround strategy within 100 days. The JBRA echos a call to all residents to honour their responsibility towards the municipality so that quality services can be delivered. Your responsibility towards a democratic rule of law bound municipality include:

• Paying all lawfully levied rates and taxes in accordance with the law and raising any disputes concerning such levying in accordance with the legal provisions to execute such a dispute;
• Paying for any service acquired from the municipality;
• Holding those who assume power at the municipality to account for their actions or failure to act when lawfully required;
• Participating in and respecting the democratic and constitutional institutions on which the Republic rests – in particular contemptuous remarks about the institution of the Parliament of the Republic is anathema to civic responsibility, as three councillors appear to have forgotten;
• Attending some of the public meetings on subjects of concern to you;
• Critically reading media reports on the the state of the municipality and writing your views and opinions on these reports and on the municipality in general to the editors of the various media ventures in Kouga;
• Expressing, or choosing not to express, your political views in constitutional ways – in particular avoiding hate speech, and violence or the threat thereof;
• Conducting your affairs with regard or consideration for the interests, welfare and above all dignity of others.

Whilst it is obviously not a civic duty of residents of Jeffrey’s Bay to join the JBRA the JBRA is one of the voluntary organizations which people belong to or support because of a belief in the importance of fulfilling the “responsibility towards the municipality so that quality services could be delivered”. Perhaps a problem we are experiencing is that with none of the directors residing in the municipality there is a lack of responsibility to the municipality at the highest of levels.

The Mayor, his Mayoral Committee and the municipality’s new top management team met last week to discuss residents’ grievances, the challenges facing the municipality and how best to resolve these to establish a culture of service excellence in Kouga.

There is nothing new about the team. Several members of the team have been in municipal management positions for quite some time and others were municipal officials in different capacities prior to the elevation to their current positions. Fadi was involved in legal services and Burger was charged with risk management …

The Mayor said he was pleased with the outcome of the discussions.

On what basis should the mayors satisfaction present anything other than that he is a delusional puppet? More than 12 months of the mayor being pleased with progress has left us in a worse state.

“Our new directors and Municipal Manager are a formidable team. The Council is confident that they have the necessary know-how, determination and drive to help us create a better Kouga for all,” he said.

If they do not have the necessary know-how they should not have been appointed.

The Mayor said the new directors, who were appointed last month, were finalising detailed strategies on how to overcome the key challenges facing the municipality. The strategies will also address the nitty-gritty of the grievances outlined in the petitions.

The key challenge facing the municipality is a dysfunctional council and a mayoral committee that which assumes powers it does not have. Unless one of the strategies involves Mr Felton bricking in the mayors office whilst the mayoral committee is sitting in the office the key challenge is outside of their hands.

The strategies will be submitted to a special Mayoral Committee meeting in October so that they can be finalised, approved and implemented.

The strategies need to be finalized and discussed in council rather than subjected to the grand incompetence of the mayoral committee – this is a core problem in Kouga, things are decided in the mayoral committee and council is treated as a circus act.

The Mayor further reminded residents that they too had a role to play in ensuring service excellence and encouraged communities to become part of the solution.

“Council and the municipal administration’s efforts will not succeed if residents do not honour their obligations as well,” he said, referring to the millions of Rands owed to the municipality in rates and service monies.

Curiously the municipality omits presenting the figure of monies it is overdue on paying its creditors …

According to figures submitted to the Council, in June this year, at the end of the 2011/2012 financial year, residents owed the municipality more than R100-million for services and rates, of which more than R90-million was debt older than 30 days.

Of course the figure of those arrears exceeding 360 days and not yet allocated as bad debt has very interesting implications for anybody interested in accounting norms and practices.

“This is R90-million that could have been put towards maintaining and improving service delivery,” he said.

Not if regard is given for the fact that the municipality only budgets 7% towards repairs and maintenance on a 95% collection rate. It is clear from the current budget that the heart of service delivery is lower on the priority list than luxury expenses for executive politicians.

He dismissed the widely-held belief that it was mainly poor communities who did not pay their municipal accounts.

The mayor is merely confirming what I wrote last year: “However the disgusting thing is that contrary to general mythmongering it is not the poor communities but rather big debtors - particularly speculative property developers and fly-by-night industrial activities - who are to blame and most municipalities could if it were not for their large recalcitrant debtors supply every household (regardless of the income of the household) with R200 prepaid electricity a month and actually function within their budgets, and more importantly providing households with electricity reduces the dependence on burning parafin etc ...”

and

“A basic survey of cases in the superior courts involving municipal accounts tells the harrowing story of developers and tycoons owing hundreds of thousands of rands and being allowed to do so for years while municipalities target ordinary and poor people on service charges, but there is a dangerous mentality towards debt collection and credit control in SA with regard to public goods - and the Joburg billing crisis shows this.”

“The wards that owe the municipality the most money are places such as St Francis Bay and the more affluent areas of Jeffreys Bay and Humansdorp. The municipality is also owed millions by people who own more than one property,” he said.

The revelation that millions are owed by owners of multiple properties in the municipality is the clearest indicator that the heart of the problem was a culture of the municipality encouraging speculative property development. The inescapable truth is that a great deal of Kouga’s financial mess is a direct result of the fact that for several years the municipality ran a development pyramid scheme with a deliberate attempt to see more high valued properties forming in Kouga such that there are larger revenues allowing a larger budget (more power, and probably more funds to skim off).

What we are left with is a municipality that has inflated staff numbers, inflated expenditure, inflated politicians egos, inflated challenges. Too much local government and not enough delivery. This can be seen in how the budget is allocated, it can be seen in the turmoil that exists on the corridors at Kouga and it can be seen

The Mayor acknowledged that there were also councillors and municipal employees whose accounts were overdue.

Now if only the councillors were not afforded the same “courtesy” that the residents of Ocean View who are alleged to have overdue accounts face.

“We’ve already dealt with those councillors who were not paying their accounts. We expect that the debt of all councillors, save two, will be paid off fully by November,” he said. “Similarly, we will be dealing harshly with municipal employees who fail to pay their municipal accounts.”

He said there were a number of other factors that impacted on the municipality’s income and damaged its capacity to render services effectively.

“One such factor is the exorbitant amount of money the municipality has to spend on legal costs,” he said. “There is a countrywide trend to instigate litigation against municipalities, often simply for the sake of publicity. When this happens, regardless of the merits of the case, municipalities are forced to spend money on legal proceedings which could have been put towards service delivery.

The municipality wastes money in litigation because it conducts its affairs so badly. It is because of the merits of the cases against them and an appetite for impunity and litigation by attrition that Kouga is so horrendously bruised on the legal front as a cursory glance reveals:

• On the 30th November 2011 (after the start of Koerat's term of office) the SCA dismissed an appeal brought by Kouga with costs in Kouga Municipality v Bellingan (121/11) [2011] ZASCA 222 with costs. The entire matter surrounded Kouga improperly passing a trading by-law and trying to enforce their improper by-law.
  The Abdullah dismisal saga was effectively put to rest on the 2nd February 2012 with the municipality paying out the remaining term of the contract. Effectively meaning that for a period of time two people are paid for one job. Also the municipality was landed with its own litigation costs (of two counsel).
• The Dennis saga brought a major blow on the 30th September 2011 (during Koerat's term) when the High Court found that the Kouga Municipality breached its contract with Fred Dennis. The indications are that the full payout under the contract in excess of R6 mil are now liable to the municipality.

I can't seem to hunt down the articles in the press setting the figure to 6 million on his salary but I seem to think Die Burger reported on the matter. With both Abdullah and Dennis you have a failure of the Koerat administration to ensure that the alleged corruption and mismanagement to be properly addressed.

• On the 4th March 2010 Kouga landed itself with a costs order on an attorney client scale (which is fairly adverse) in Robcon Civils/ Sinawamandla 2 Joint Venture v Kouga Municipality and Another (2106/09) [2010] ZAECPEHC 8. This case arose because of mishandling of tendering processes. The courts remarked:
  "In the present matter, it is of course not merely reasonable courtesy which is in issue but indeed the first respondent's flagrant disregard for its constitutional obligations."
  This flagrant disregard for constitutional obligations is the hallmark of the Kouga Municipality.
  
• On 31st May 2011 Kouga was dealt a major blow by the SCA in Eedenprop v Kouga Municipality (541/10) [2011] ZASCA 92 as Kouga was landed with a costs order on a matter that went to the SCA (meaning both High Court costs and appellate costs) and a contract that they had tried to get out of was found binding with an Order:
  "(a) The agreement concluded between the appellant and the Jeffreys Bay Transitional Local Council (the predecessor in title of the respondent) on 24 October 2000 is declared to be of full force and effect.
  (b) The respondent is ordered to pay to the appellant all amounts due in terms of chapter VI of such agreement, including interest at the legal rate from the date upon which such amounts were due and payable, to the date of payment thereof."
  The liability from this contract is millions of rands, and litigation appears to have arose because of poor management from Kouga.
  

These are simply the reported superior court cases lost by the municipality since January 2010. They do not include unreported matters such as the High Court interdict (and costs order) which I as a private individual secured against Kouga for an unlawful termination of electricity supply in 2012 (order absolute on 26 January 2012) or the pre-trial litigation currently in place by both creditors of the municipality and businesses and individuals harmed by municipal
mismanagement, and the DA's suit involving misconduct in appointments by the Mayoral Committee (which could be entirely avoided by the mayoral committee taking responsibility for their abuse of office). Nor does it include the current Application arising from their unlawful prohibition of a gathering on the lawns (which can similarly be avoided by Director Jansen ceasing to conduct himself in contravention of the Regulation of Gatherings Act).

He said that the municipality was also being forced to incur excessive legal fees because of community conflicts.

“An example here would be the debate around the dune spit at the St Francis canals. One stakeholder group believes rock revetments should be used to strengthen the spit but they are being vehemently opposed by another group. The municipality has been trying to find a solution acceptable to both parties but, at this stage, it seems inevitable that whichever group doesn’t get its way will be taking the municipality to court, again forcing us to hand over money to the courts that we could be using for service delivery instead,” he explained.

Having observed the council meetings concerning this matter, I can honestly state that the municipality has demonstrated that where multiple idiotic courses of approach are available they will adopt the most idiotic course available. A result of municipal mismanagement is that no less than 4.5 million rand which is unbudgeted has to be built into the budget and that is before legal fees and other wasteful expenditure enters the mix. One has to wonder whether the municipality ever considered giving intention to abide by a decision of the court.

He acknowledged that in other instances the municipality was facing litigation because weak internal controls in the past had resulted in service providers being appointed without the proper procurement process being followed.

“We have already tightened the controls to prevent this from happening again but, regardless of whether the mistakes were made by this or the previous Council and management, we have to take responsibility and fix those mistake. This means incurring further legal costs,” he said.

The incurring of legal costs is higher in orders of magnitude when you seek to hide the true cause of the error. Presumably the mayor has Robcon Civils and the Kouga Valuators matters in mind here. The valuation of properties issue is something I haven’t touched on yet but it carries great significance. Many properties in Kouga are improperly valued (with certain areas being grossly over-valued) No doubt valuation problems lead to declared disputes and property owners refusing (rightfully) to pay rates on the wrong assessment, quite certainly a few million rand in rates falls into the bracket of inflated (and disputed) rates.

The Mayor asked residents to bear in mind that some of the grievances in their petitions, for example, education and health, fell outside the powers and functions of the municipality.

“What we can do in these instances, is limited. However, as the sphere of government closest to the people, we will continue engaging with the relevant state departments to try and help communities,” he said.

Having seen the SFBRA petition, having drafted the JBRA petition and having heard the Ocean View petition I can affirm that beyond the responsibility of the municipality to create the proper environment for the provision of education. A particular concern of the municipality hindering the provincial authorities in fulfilling their mandate arises – and of course the Eastern Cape education authorities do not need more challenges than the hand they have already been dealt)

Further primary healthcare and ambulance services are a municipal competence (shared with province) at this point in time.

He said the municipality also lost valuable income due to the theft of electricity and water.

“This practice is rife in communities such as Ocean View, whose residents participated in the second march to the municipality. We appeal to law-abiding residents in these communities to discourage such behaviour and to report transgressors,” he said.

“Not only does it rob the municipality of income that could have used to improve services to these areas, it is also dangerous and result in the loss of lives.

Invariably a large number of people resort to unlawful connections when the municipality fails to deliver lawful options for access. There is also ample evidence of the municipality effecting unlawful denials of access so there is a great deal of pot calling the kettle in this instance (except that those persons unfortunate enough to live in Ocean View on the fat cats estimate have no right to have a working electric kettle).

The Mayor acknowledged that the municipality’s salaries and wages bill was still not realistic when compared to its monthly cash-flow despite the contracts of contract workers not being renewed.

“We would like to assure residents that the further reduction of our salaries bill remains a priority and is being addressed in conjunction with the Development Bank of South Africa and the Department of Local Government and Traditional Affairs,” he said.

I fail to see how the DBSA is a stakeholder able to assist in reducing the salaries bill. I suspect that what is actually at play is that the DBSA more than the residents find Kouga’s grossly high salaries bill a serious threat

When is the mayor taking a pay cut?

In closing, the Mayor emphasised the commitment of both Council and the municipal administration to turn Kouga around and create a better life for all.

“Our success, however, depends as much on our communities as it does on us. Please do not purposefully try to sabotage the municipality, especially not for political gain such as the calls to have the municipality placed under administration tend to be.

“Please bear in mind that should the municipality be placed under administration, it will not resolve our cash-flow problems. It will, in fact, lead to a further waste of funds since our new directors will still have to be paid despite their work, in effect, being taken over by an outsider. Allow them the opportunity to show us what they can do.”

The municipality previously denied the extent of its cash flow problem. The concept that an administrator would be an outsider is a curious argument considering that the directors are themselves outsiders. We already know with the mayoral committee steering the sinking ship that the directors are impotent to accomplish anything: The CFO has shown us what she can do (within the political landscape)– see an inchoate budget; the MM has shown us what he can do – or more to the point what he can’t do, he can’t turn around the municipality despite all protestations to the contrary. What we don’t know is whether the fault lies with the acting directors or with the politicians (or with both), what we do know is that the executive politicians are by law and convention accountable for the state of affairs. If the mayoral committee had any concern for fairness to the directors the mayoral committee would resign or seek the dissolution of council (which would in any event result in an administrator) and allow the administrators and managers (the directors) to get on with their jobs.

Kouga’s new team of directors, headed by Municipal Manager Sidney Fadi, are Carleen Arends (Tourism, Creative Industries and Local Economic Development), Carlien Burger (Finance), Victor Felton (Infrastructure, Planning and Development), Japie Jansen (Social Services) and Thobeka Tom (Administration, Monitoring and Evaluation).

Is it not premature to announce the “new team” when a suit is still pending and contracts of appointment and finalization of delegations are still uncertain.