Billions in rates charged ‘illegally’

By Shaun Gillham

EASTERN Cape municipalities may face legal action after being accused of illegally  charging property owners an estimated R6-billion in rates over more than a decade. It has been claimed the municipalities had  not followed prescribed government procedures, thus acting unlawfully.
Representatives from a number of Eastern Cape ratepayers’ associations who met in Port Elizabeth this week, said they were investigating possible litigation against scores of municipalities across the province, which they accuse of gross mismanagement and corruption.
They also plan to form a provincial “mega ratepayers association” and are considering a  rates withholding campaign.
This emerged after a meeting in Nelson Mandela Bay where representatives of ratepayers’ associations from Nelson Mandela Bay, East London, St Francis Bay and Jeffreys Bay, among others, reached  consensus on their allegation that municipalities had been charging ratepayers’ rates illegally since 2005.
The claim is linked to a technicality which the ratepayer representatives claim means municipalities have illegally charged and taken more than R6-billion in rates over nearly 12 years. 
According to the Municipal Property Rates Act of 2004, all municipalities are compelled to publish the rates they intend to charge in the provincial gazette every year, which, the association says,  not all have done.
However, Nelson Mandela Bay Municipality spokesman Kupido Baron dismissed claims that the municipality had not gazetted rates, saying this had been done since 2005. “We also publish the rates in the local newspaper and have already paid for the 2012/2013 rates to be gazetted.”
National Taxpayers’ Union chairman Jaap Kelder, of  Kempton Park, said the meeting resolved that all Eastern Cape ratepayers’ associations would meet in Cradock on August 4, where the issue of legally challenging  municipalities around the rates issue would be decided  as well as whether support would be sought for a province-wide campaign to withhold rates. “We found that, according to legislation and the constitution, any bylaws that have not been promulgated are not valid,” Kelder said.
Nelson Mandela Bay Ratepayers’ Association chairman Kobus Gerber said ratepayers “would no longer be bullied”.
“Ratepayers are paying about R100-million annually in rates.”
He said proof that municipalities had acted illegally regarding rates payment would give ratepayers “massive bargaining power”.
Buffalo City Municipality spokesman Keith Ngesi did not respond to Weekend Post queries at the time of going to print.

Additional reporting by Barbara Hollands and Shaanaaz de Jager

This is a shortened version of an article that first appeared in the print edition of Weekend Post on Saturday July 14 2012. 

Billion rand hangover for Mandela Bay Stadium

By Patrick Cull

NELSON Mandela Bay has ended up shelling out close to R1-billion for the privilege of being a host city for the 2010 Fifa World Cup as both national and provincial government have defaulted on funding commitments.
This after the city should only have had to pay R340-million.
Local politicians and ratepayers have slammed the Nelson Mandela Bay Municipality (NMBM) for allowing the staggering costs – R878-million –  to get so out of hand, saying it is yet another example of the metro making “impulsive” decisions that could end up crippling the city financially.
They also fear the forthcoming Afcon 2013 tournament – of which Port Elizabeth is a  host city – could see the municipality follow the same devastating path.
Chairman of the Nelson Mandela Bay Ratepayers’ Association, Kobus Gerber, said it showed the municipality was “making impulsive decisions and putting ratepayers at risk”.
Gerber added the municipality had “yet again got itself in a financial mess” with ratepayers having to pay to “get them out of it”.
“With Afcon 2013 we are bound to walk the same path again. Who gives the municipality the right to take our money and push it into events like this?
“They sould ask us before they just spend money like this, because we are the ones who have to help them out of trouble when everything flops.”
The current cash crisis, DA caucus leader Leon de Villiers said, was “largely due to the cost of hosting the World Cup” and the reason why the metro’s Capital Replacement Reserve was now  depleted.
De Villiers said Mayor Zanoxolo Wayile and the ANC “have made the same mistake by committing this metro to host Afcon 2013 without first obtaining a firm funding commitment from national and provincial governments”.
“No details have as yet been released on the extent to which national and provincial government will assist in terms of the R30-million required to stage the tournament,” De Villiers said.
“The mayor and ANC have their priorities wrong as they are unable to provide basic services to a vast number of residents who are still using the bucket system, without proper housing, water and electricity.”
De Villiers said the failure to appoint a permanent municipal manager and spending R11.8-million to sponsor nine PSL soccer matches at the stadium earlier this year indicated the mayor and the ANC were “failing the residents of this metro”.

This is a shortened version of an article that first appeared in the print edition of Weekend Post on Saturday June 16 2012. 

Eskom rates cut a ‘significant relief’

By Shaun Gillham

THE decision by South Africa’s energy regulator to cut the increase in electricity rates for Eskom to 16% for the new financial year has been hailed by Eastern Cape ratepayers and business organisations as a “significant relief”.
Eskom had proposed that the 25.9% average price increase be reduced to 16% and this was approved by the National Energy Regulator of SA (Nersa) on Friday.
Eskom was in 2010 granted three years of 25% annual rises in power tariffs and was expected to apply for two more similar increases after that.
Only from 2016 were tariffs expected to rise in line with inflation. But President Jacob Zuma said last month he had asked Eskom to seek options to limit the increases in rates to ensure they would not stem economic growth.
The reduction will result in a loss of revenue of R11.1-billion, the regulator said.
Nelson Mandela Bay Ratepayers’ Association chairman Kobus Gerber said the decrease in the tariff would “lighten the load” on households. “While it is sad that we have to contend with increases of this nature, it will come as a relief to ratepayers and electricity consumers, who are already burdened with escalating costs, to deal with a lesser increase,” he said.
Nelson Mandela Bay Business Chamber chief executive Kevin Hustler said the 16% tariff was a “welcome indication that government is listening to the voice of business on this issue, which has a major impact on the ability of local industry to be globally competitive”.
“It is clear the active lobbying by organised business nationally and in the regions has been effective in ensuring the interests of industry are taken seriously by national government.”
It was “pleasing” to see swift action had been taken since Zuma’s state of the nation address last month, when the president acknowledged the concerns of business and said he had asked Eskom to address how electricity price increases could be reduced, Hustler said.
While welcoming the reduction, Border-Kei Chamber of Business executive director Les Holbrook said if South Africa’s energy crisis had been left in the hands of the private sector it would already have been solved.
“If the private sector had been able to respond to the energy crisis – rather than all Eskom’s dithering and faffing as well as their laws, regulations and tariff increases – we would have fixed it a long time ago,” Holbrook said.

Additional reporting by Reuters

This is a shortened version of an article that first appeared in the print edition of Weekend Post on Saturday March 10, 2012.

Row over docking pre-paid electricity to collect debts

By Yolandé Stander

EASTERN Cape residents are fuming over what they say is one of the more “underhanded and unfair” debt collection measures used by municipalities – deducting up to 60% of some residents’ pre-paid electricity purchases in order to supplement municipal coffers.

Those with accounts in arrears – whether just a few hours late or months overdue – have seen municipalities deducting a percentage of every pre-paid purchase made by these residents. The amount deducted can be anything up to 60%.

In Nelson Mandela Bay the controversial policy adds more than R2-million to municipal coffers each month. Although the municipality claims the practice is legal and in line with its “customer care bylaws”, the local ratepayers’ association intends challenging it following residents’ complaints that they have been “unfairly” treated.

“I rent a house. When I went to buy electricity earlier this month, I noticed I was given less electricity than I paid for,” irate Kamma Park resident Ryno Lotter said. “I found out it was because the owner of property had failed to pay his municipal account on time. It is unfair – because he didn’t pay, I was punished.”

Shirley Dawson of Sherwood said the same thing happened to her. “This is a huge problem if you work on a tight budget … Then you also sit with the schlep of sorting the problem out with the owner. I think these are underhanded tactics by the municipality, because innocent people suffer.”

Municipal spokesperson Kupido Baron said the practice was legal and part of the “customer care bylaw”. He said if tenants were affected this was “a private matter” between tenants and owners.

Kobus Gerber of the Nelson Mandela Bay Ratepayers Association said he had been inundated with complaints about this debt collection measure. Gerber said some residents felt the municipality was being ruthless by enforcing this policy even when a ratepayer’s payment was only a few hours late.

 One resident, who pays her account by electronic transfer, complained that after being out of town on the day the payment was due, she quickly made a transfer late that evening to avoid penalties. However, the transfer only reflected the following day and when she purchased electricity later that week, deductions had already been made.

“We have suggested the municipality give a grace period for these circumstances,” Gerber said. “We don’t believe this is the way to collect debt … in the same breath we would like to encourage residents to pay their accounts.”

Nelson Mandela Bay is not the only municipality to have resorted to these measures. As of April 8, residents with accounts in arrears with the Kouga Municipality have had between 20% and 40% automatically deducted from their pre-paid electricity purchases.

In East London, vice-president of the Beacon Bay Ratepayers Association Judy Sanan said she was aware of residents who had paid their municipal accounts but were nevertheless barred from buying metered electricity.

“You should be able to buy metered electricity immediately after settling your account, but their accounting systems are not up to scratch,” Sanan said. “It’s inconvenient specially if you are blocked from buying electricity on a Saturday and have to wait until Monday to sort it out.” – Additional reporting Barbara Hollands

(This article was originally published in the print edition of Weekend Post on Saturday, April 23, 2011.)

Shock sick leave statistics for municipality

By Shaanaaz de Jager

NELSON Mandela Bay municipal employees have taken what amounts to a shocking 306 years in sick leave within the space of a single year.

A confidential report, a copy of which is in Weekend Post’s possession, shows that between September 1, 2009 and August 31 last year the municipality’s 7000 employees were absent from work for a total of 77208 days.

The report, commissioned by the municipality‘s occupational health department and submitted to the human resources department last week, adds that as a result of the absenteeism, more than R5.6-million was lost in direct wage cost.

According to the report, which was compiled by occupational health and safety specialist Dr Jan Lapere, the statistics pointed at: a” lack of time governance; the possibility of large scale abuse; a very sickly employee cohort; very serious psychosocial problems amongst the workforce; and a potentially extraordinarily high disability claim process among municipal staff”.

Opposition parties and ratepayers have blasted the findings, saying the sick leave syndrome was having a direct influence on service delivery to metro residents.

DA human resources spokesman Pieter Terblanche said the figures were “shocking” and that the private sector “would never tolerate these statistics”.

“The Basic Conditions of Employment Act allows an employee 36 days sick leave in a three-year cycle, which amounts to 12 sick days a year. For the municipality to allow this number of sick days a year they had to have negotiated with the unions,” Terblanche said.

He said corporate services and public health directorates should have implemented an action plan long ago.

“This is definitely affecting service delivery. Are the statistics analysed? Are patterns identified? For example, is somebody regularly off sick on a Monday or Friday or at month end? Disciplinary action and corrective measures should be implemented.”

Terblanche said the statistics were an indication of why service delivery in the municipality was failing. “Staff are not available to perform certain functions. If the statistics could be reduced by 30% we could build additional houses, install infrastructure such as stormwater (channels) and electricity into previous disadvantaged areas.”

Kobus Gerber, chairman of the Nelson Mandela Bay Rate Payers‘ Association, said the statistics “make my blood boil”. He said municipal workers needed to realise they were “the employees and the ratepayers the employers”.

“This sick leave is absolutely absurd. It proves yet again how incompetent managers are at the municipality. The staff have no interest in making the municipality productive. They have proved the municipality is a gravy train.”

Gerber said the municipality was “heading for a disaster”.

“If this municipality goes under administration I hope they realise they (municipal staff) will not have jobs,” Gerber said.

Although he said it was “not the norm” for the municipality to publicly respond to issues raised regarding confidential agenda items”, spokesman Kupido Baron said the findings were nevertheless a “direct result of the municipality‘s rigorous internal processes to ensure the optimal functionality of staff by appointing a suitably qualified service provider to assess absenteeism on a monthly basis”.

Dr Lapere, who is also a labour law specialist, was commissioned in September last year.

“This service provider’s contract is over a three-year period which means we will be in a position to assess trends in absenteeism and as a result develop a mechanism to deal with it. We are also working towards the implementation of an Absenteeism Management Policy,” Baron said.

(This is a condensed version of an article published in the print edition of Weekend Post on Saturday, March 26, 2011)