Bloemfontein has spoken: A ratespayers strike is not a protected course in itself

South African municipal authorities are in a terrible state and residents, rates-payers (many of whom are residents) and businesses operating within particular municipalities have developed hostility towards paying monies which are perceived to be or are maladministered.

Ultimately the residents and ratespayers of the municipality within which Kroonstad finds itself formed an association which like many other residents and ratespayers associations embarked on a rates strike. One of the striking members, a Ms Rademan, found that the municipality had terminated her electricity supply even though she had paid her electricity bill (it seems this is a postpaid account). Subsequently Ms Rademan (presumably with the support of some form of the association) approached the magistrates court to compel the reconnection of her electricity. The case has moved through the High Court to the Supreme Court of Appeal. The Supreme Court of Appeal ruled last week Thursday (1st December) and effectively confirmed both the reasoning and the finding of the Bloemfontein High Court which set aside a decision by the magistrate for the Kroonstad district which gave Ms Rademan reprieve. An advantage of the manner in which this case has been handled is that we have two good judgments, one in English and one in Afrikaans. Unfortunately for Ms Rademan she is finding herself with costs from three courts and these costs do grow.

The judgment which bears the reference Rademan v Moqhaka Municipality & others (173/11) [2011] ZASCA 244 (01 December 2011) is a judgment which any person considering withholding monies from the municipality should consider. The reasoning of the Supreme Court of Appeal is crisp and its findings above any real criticism when regard is had to the relevant statutory provisions. Of course there is always the possibility of a Constitutional Court challenge on the basis that the legislation is unconstitutional.

I don’t believe that the Constitutional Court will find the relevant provisions of the Municipal Systems Act unconstitutional for two reasons: Firstly the Constitution does not contain any provisions requiring meaningful representation before taxation or that the government failing in critical duties may justify certain steps - in so far as this may be viewed as a flaw in the Constitution itself I align myself for fairly complex reasons with the view, in so far as certain political interests advocate the inclusion of such a provision in order to enhance “accountability” I do not. Secondly the Constitutional Court has already in Pretoria City Council v Walker 1998 (2) SA 363 (CC) placed its flag on the mask against a dissent into anarchy. A feature strongly endorsed by the Rademan decision is the fact that municipal rates are “part of the civic and contractual responsibilities” of ratespayers and that “for a municipality to be able to properly and efficiently

One area of the law which this case does not address and which is relevant to Kouga ratespayers is whether a ratespayer must pay the rates assessed by the municipality according to inflated property values of whether they may pay rates on a lower valuation of the property if the second valuation is in order – this is a major issue due to the assessment on the market value of property. I suspect that the statutory basis for rates determination will entail a pay first argue later policy and that the municipal authorities will not endorse a policy by which a ratespayer may pay on a lower assessment.

However the political considerations behind the law are still open to debate. Is it correct that residents and ratespayers have no recourse against the municipality who simply misuses their funds? The view of the courts appears to be that the law itself is the recourse and in exchange for the protection which the Rule of Law brings we surrender our right to self-help in the form of a rates strike; of course we can turn to our courts (we have a Constitutional right of access to legal recourse after all) but the record suggests that litigation by many follows debt collection, commerce and evading conviction for criminal behaviour and not the maintaining a democracy. Perhaps South African’s are not sufficiently prepared to litigate about important issues and principles, being too afraid of descending into the perceived (and possibly real) litigant society of the USA and the unfortunate cynicism that may emerge on finding that whilst poor unsatisfactory and shoddy legal services may be obtained easily, quality litigation is both costly and inconvenient - unless you happen to be a public official facing criminal charges. (Just ask the President, whose office repeatedly demonstrates the shoddiest of work while his personal criminal defence team extract massive fees paid by the fiscus.) Sadly certain government entities are more afraid of certain well connected entities than they are of the law itself – rather keep particular business or party interests happy than comply with the law, after all who is going to take you to court and even if they succeed it is public monies that are spent; and this may include Kouga. In addition to the courts we also have recourse through the municipal council’s legislative mandate, we can lobby for a municipal policy which allows the creation of a holding trust for ratespayers funds in dispute. The municipality would be well served by a policy which sees the proper declaration and resolution of individual and collective disputes instead of a general disquiet that currently exists.

 

Suffice it to state that unless a policy creating space for the entrustment of monies by ratespayers as a withholding rates unless specific issues are addressed is created a rates strike by ratespayers simply will not succeed and Kouga not only have a right but a legal duty to break the strike by cutting services. Of course the prospects that some ratespayers purporting to be in a rates strike are simply acting on a pretext which undermines service delivery could see an improvement for residents as the municipality will have more funds. Unfortunately the issue is one upon which measurement of the management and administrative structures are important, further as many municipalities have demonstrated the two dominant political organizations in Kouga both appear to set course on policies which are as prejudicial to the poor as they are idiotic. In the present instance  the Kouga Municipality has bizarrely embarked on terminating access to tenants without complying with the prescripts of the Constitutional Court decision in Joseph & others v City of Johannesburg & others 2010 (4) SA 55 (CC) which requires that 14 days notice be given before terminating access to electricity and that the municipality must make it possible for tenants to enter into a relationship with the municipality for services. Unfortunately this is a subject on which the concept and principles of sub iudice prevent me from commenting at this time.

 

[Small category note: I have included a tag “legal opinion” although this is not to suggest that this piece is or should be viewed as a legal opinion, but rather that it has a bearing on an issue relating to the seeking of or reliance on legal opinions. A legal opinion can be sought from one of the many legal practitioners within the Kouga municipality] 

Residents forking out for poor service

From Fin24Sep 18 2011 15:09by Antoinette Slabbert

Pretoria - Residents of towns and cities, as well as business enterprises, are having to shell out ever more for municipal taxes and services, but receive less and less in exchange. 

Municipalities use an ever-diminishing amount of this money to create infrastructure and budget little for repairs to and maintenance of existing infrastructure. 

This is evident from National Treasury's overview of municipal finances spanning the years 2006 to 2013, which was publicised last week. 

According to the Treasury report, municipal revenue from services since the 2007 financial year has risen an average 16.6% a year, reaching R72bn in the 2010 financial year. Over the next three years an average growth of 18.6% is expected. The steep escalation of bulk electricity costs is one driver of these increases. 

Accordingly, property tax has risen an average 12% a year and this increase is expected to persist at a rate of 10.2%. Other revenue from residents' pockets, including traffic fines, licences and permits, rose an average 12.4% between 2007 and 2010. 

Treasury has expressed concern over the fact that municipalities are relying more on government grants for infrastructure expenditure. These grants have also risen sharply in recent years. 

Municipalities are using less and less of their own money for infrastructure development. 

According to Treasury, this indicates that municipalities have exhausted their own historical cash reserves and, as a result of cost pressures, are struggling to keep generating surpluses on their operating budgets. Treasury said it is also possible that municipalities are deliberately replacing their own money with government grants in their capital budgets to enable them to use their own money - that coming from residents’ pockets - elsewhere. The major part of the operating budget towards which their own funds are increasingly being applied is staff costs, said Treasury. 

According to Economists.co.za director Mike Schüssler, in 2009 municipal staff members earned an average R17 375 a month. Workers in the formal private sector at that time earned an average of R9 495 - virtually half as much. 

According to Treasury, municipal salaries rose an average 15.4% from 2007 to 2010. 

Schüssler said municipal officials generally take home much more pay than those living in their council areas. They have greater security and take fewer risks than residents do. 

"Other expenses" in municipal operational budgets rose an average 16.7% over the same period. What exactly is included is not clear, but Treasury warns that municipalities should stop wasting money on things like large sponsorships for music fests and beauty competitions; expensive campaigns for eg voter education; liquor and entertainment; foreign "study trips"; motor vehicles, housing and cellphones for mayors, council members and staff; legal expenses and long suspensions of staff members on full pay; as well as consultants performing routine management tasks. 

Treasury is worried that municipalities are setting aside less and less money for repairs to, and maintenance of, infrastructure. The consequences are not evident in the short term and these types of savings are less "politically sensitive" than cancelling capital projects or cutting entertainment expenses, said Treasury. 

In the long run both service delivery and the local authority's ability to earn money from service delivery are impaired. 

Schüssler said operating revenue could soon run to more than 8% of the gross domestic product (GDP). In the 2007 financial year it was 5.9% and in the 2009/10 year 7.2%. 

The international norm is that state revenue should equal no more than 30% of GDP. According to government’s figures it is - with the exclusion of municipalities - already 28% of GDP. If municipalities and state enterprises are included, total government revenue in South Africa is certainly already more than 40% of GDP, said Schüssler.. 

Schüssler reckons municipalities' portion of the cake can in no way continue growing at this rate. Municipalities have to employ the money they receive more efficiently.  

Ja, Well, No, Fine the authorities

By Trevor Watkins, Chairman Jeffreys Bay Residents Association 

When the authorities wish to discipline their citizens for some action or omission, they usually start by issuing a fine.  This is meant to remind you that you have done wrong, that you are being punished, and that if you do wrong again, you will be punished again.  Given the enthusiasm with which the authorities fine their citizens for every imaginable type of transgression, this system works well for them.

If you forget to brake going down the hill into Humansdorp you might get a R500 fine. If you forget your ID book and drivers license when you pop out for a loaf of bread, that could cost you R200. If your dog makes a tiny little mess on the beach, that could cost you R300. As I am sure we have all heard the official smugly informing us, “I’m just doing my job. I don’t care what your excuses are. Sign here to acknowledge your guilt please.”

If your brake light on your car has burnt out and you get stopped, then you will get a big fine. If you go out in the same car tomorrow and get stopped again, you will get another big fine.  Every citizen is subject to a possible fine every day. The authorities make an absolute fortune out of  our inability to keep up with every little rule and regulation that we are supposed to know.  It is just another tax upon the already over-taxed citizens.

So, why can’t we, as residents, fine the authorities when they mess up? When their incompetence turns our roads into deathtraps, when they fail to produce the correct documentation at the correct time, when they allow tons of sewage to spill onto our beaches, why can we not just “Do our jobs” and fine them for every transgression?  If I see a large pothole on a municipal road, why don’t I issue a fine against the municipality for every day that the pothole remains unfixed? If I see raw sewage in a pool on the beach because the municipality did not maintain its pumps adequately, why do I not issue the municipality with a huge fine for every day that the sewage remains? And since this problem affects every citizen who wanders down to the beach, why not let every citizen issue a fine to the municipality? After all, they have no problem issuing a fine to every citizen whose dog wanders onto the beach.

Of course, if we held the authorities to the same standards as they hold us, they would quickly go bankrupt due to their incompetence. Its okay for them to hold a business to a high standard of hygiene, for example, but don’t expect themselves to be held to the same standard. It would be a bureaucratic nightmare, they say. It could never work.  Actually, its really quite simple. The municipality does not need to pay out any cash to its citizens, and it does not even need to keep a record of fines issued against it. We will keep a public record of fines against the municipality, and the amount of the fines will be deducted from any fines owed TO the municipality by citizens and residents. In other words, any traffic fine or municipal fine against you can be set off against any fine you have levied against the municipality.  Good plan? Sure. Would the authorities agree to it? Never – its not in their interests.  We are the sheep to be shaved, not them.

At least we can do one side of this arrangement. The Jeffreys Bay Residents Association has setup a page on their website at https://sites.google.com/a/jbayra.com/jbayra/opinions-menings/municipal-fines

Where anyone can add an incident to the database and assess a fine against the municipality.  You can also view all the fines assessed by other residents so far. 

Make your anger and indignation at the shabby way you are treated by the authorities heard. Fine them, again and again, for every act and omission they are responsible for.

SA municipal finances? The horror. The horror.

Operation Clean Audit 2014 was launched by minister of cooperative governance and traditional affairs Sicelo Shiceka at the start of the 2009/10 municipal year.  Its aim: To clean up municipal finances and ensure every municipality received an unqualified audit by 2014. The auditor-general’s report on municipal finances for that year was released on Wednesday, and it appears little has been done to advance this aim. What do we do now? By PAUL BERKOWITZ.

Click here to read the rest of this article at The Daily Maverick.

The biggest problem/challenge facing the new Kouga Council

This document reflects the personal opinion of Trevor Watkins, and is not necessarily the opinion of the Jeffreys Bay Residents Association.

The politicians in Kouga will face the same problem as the politicians in Bisho, in Pretoria and in Washington. This problem is: how to resolve the financial and social chaos that these same politicians have caused with their disastrous policies.

It is politicians and their policies that

·         Bankrupt businesses and individuals with some of the highest tax rates in the world. Ever increasing local rates and taxes are a part of this problem.

·         Stifle the economy under a blanket of incompetent bureaucracy. It can take months to get the simplest permission, document or decision out of this municipality, or any other branch of government.

·         Impose insane labour policies on businesses and the unemployed, stifling jobs growth and increasing poverty.

·         Impose excessive requirements and regulations on business, costing them time and money better spent on customers.  FICA, BEE compliance, tax returns, etc, etc.

·         Generate high inflation through manipulation of the money supply, impoverishing everyone.

·         Discourage overseas investment with exchange controls, tariffs, import delays.

·         Distort the usual market incentives of profit and loss, creating a vast culture of dependency financed through a diminishing pool of workers and entrepreneurs.

·         Fail miserably to fulfill their one actual responsibility – to enforce law and order in the country. They can’t even publish adequate crime statistics.

The best thing that the new and increased crop of politicians coming to the Kouga can do is

·         get out of the way of the people who actually generate wealth and prosperity

·         pass fewer laws, hold fewer expensive bosberaads, buy themselves fewer expensive cars.

·         Stop spending  income, which they did not create, on themselves. The new council could generate a great deal of respect and credibility by immediately voting themselves a 50% cut in salaries.

·         Do adequately those few things they are actually required to do; balance the budget, enforce the law, plan for disasters, provide a minimum standard of service to their residents.

·         Stop doing those things they are neither required to do nor equipped to do: redistributing wealth, providing jobs, subsidising particular businesses, handing out favours.

The biggest problem facing the new council will be the effects of the declining economy on the Kouga area and its residents.

The biggest challenge facing the new council will be for them to realise they are a part of the problem, not the solution. The solution lies in allowing the actual generators of wealth to do their job with less hindrance. It is the businesses, hotels, bed and breakfasts, surf schools, tour operators, retailers, accountants, engineers, airlines that create wealth, jobs, profits, and councillor salaries.  There is not a single task performed by the municipality that could not be done better and cheaper by a private company.