Tuesday, November 10, 2009

Municipal meltdown

In 2005 Farmer’s Weekly tracked a municipal meltdown in parts of the Eastern Cape, stretching from Steynsburg in the west to Mount Fletcher in the east. Since then much of the country has been gripped by service delivery and rates revolts. This week Stephan Hofstätter looks at Mpumalanga, a major farming centre where residents are rioting in streets running with raw sewage. They are threatening to withhold rates until their elected leaders stop voting themselves huge salaries to fund lavish lifestyles and start performing their primary duty – to deliver basic services.

Hazyview guesthouse owner Christel Matthee has been fighting an uphill battle with the local council for years to stop raw sewage flowing down her street. It emanates from a large septic tank serving a housing development that isn’t pumped regularly enough. “You must come and smell it – all my overseas guests are stunned,” she says.The stench is the least of the town’s problems. The sewage flows from the street into furrows feeding a small dam. The dam supplements Hazyview’s drinking supply when the main canal is closed for maintenance, says Matthee. This has led to an alarming rise in preventable diseases such as cholera and hepatitis. “Residents have switched to bottled water,” says Matthee. “But children still sometimes drink the green tap water. They keep getting sick.”


Contaminated drinking water is among a host of grievances angering ratepayers falling under the Mbombela (formerly Nelspruit) municipality, which serves an estimated 1 million people, including those living in Nelspruit, Nyamazaneni, White River and Hazyview.

Their central complaint is that cronyism, financial mismanagement and jostling for positions of power and patronage have caused a breakdown in administration and services. Indicators include frequent powercuts, bulk infrastructure that can’t cope with new developments, and poor maintenance of roads and public facilities.

Shady deals

Ratepayer representatives and opposition parties want alleged corruption investigated. Charges include shady property deals on municipal land, fraudulent mark-ups on council vehicle purchases and irregularly awarded tenders.When Mbombela’s rates policy and budget were bulldozed through by the ANC-dominated council recently, ratepayers and opposition parties began to mobilise resistance that culminated in the declaration of a formal dispute. This could result in legal action or withholding rates, says Mbombela Ratepayers Association chairperson Adri Smit van der Merwe. “The intention of the Municipal Rates Act was to broaden the tax base, not generate capital to be spent irresponsibly,” Adri says.

Objections included a flawed public participation process, and rate increases calculated at 29% for residential properties, and 300% to 1 000% for commercial ones. This far exceeds a national Treasury recommendation, circulated to council, of a maximum hike of 6% during the recession.

The rates policy was implemented on 1 July, and bills reflected increases starting in August. Ratepayers association members were advised to pay only 10% more. In the likely event that the municipality cuts off their water and electricity, the association will bring an urgent court application to have the services restored.

Rates “cripple business”

Opposition party, the Democratic Alliance (DA), conducted a survey recently, showing that 45 to 120 businesses would close their doors and 10 000 people would lose their jobs within six months if the rates were implemented.Business leaders have downplayed the issue, but are clearly worried. Lowveld Chamber of Business and Tourism president Nick Elliot warned the rate hikes mooted would “cripple business and chase away potential investors”. But he believes an acceptable agreement will be thrashed out. “There’s still room for negotiation,” he says. “No-one wants to kill the goose that lays the golden egg.”Some areas, including in Cairn and Barberton, have already resolved to withhold rates. “In Cairn, 150 landowners have banded together and are telling government that we are happy to pay for services – as long as we actually get services,” says farmer Len Coetzer. They want 75% of their taxes reinvested in the immediate neighbourhood and insist on being consulted properly when developments are planned in their area.

In Barberton, the ratepayers association calculated that rates would increase by 26% on average, but they inexplicably fluctuated wildly from -20% to 500% from house to house. “Valuation decisions are arbitrary and in many cases will simply lead to more bad debts for the council,” says association chairperson Andy Nuns. “The valuation roll must be redone.” Unjustifiable salary hikes for councillors form part of the association’s formal dispute. The budget for Barberton’s municipality, Umjindi, allocates a 30% increase for the municipal manager’s salary package, taking it over R1 million, and a 69% increase for six senior managers, bringing their combined total packages to R5,4 million, up from R3,2 million last year.

By contrast, 22% less will be spent on roads and 41% less on repairs and maintenance.

“At a meeting of 200 ratepayers, the decision was unanimous to withhold rates until these issues are dealt with,” says Andy. “Many more are signing up.”Umjindi municipality spokesperson Sam Jele said Treasury allowed councils to exceed its 6% rate-increase cap “as long as it can be justified”. He declined to offer a reason and denied residents were being squeezed to fund lavish lifestyles of officials. “Salaries are negotiated by the South African Local Government Bargaining Council,” he added.

Withholding rates

Nelspruit, which has similar concerns (see box: Nelspruit’s spending priorities) and Barberton have joined a list of about 60 South African towns to declare a rates dispute with their municipalities.

Barberton is also among 35 towns throughout the country withholding rates until the dispute is resolved, according to Jaap Kelder who heads the National Taxpayers Union (NTU). Kelder stresses they are not boycotting paying rates. All money due must be paid into an interest-bearing trust account and be used only for the essential services that councils are failing to deliver. Once the dispute is resolved, any rates left would revert to the council. Costs incurred administering the process can be recovered by voluntary contributions or a member levy.

The NTU will cover the legal costs of 280 paid-up member ratepayers’ associations if they face court action. It is currently funding disputes with several councils, including Sannieshof in North West, which is considered a major test case.Sannieshof residents paid about R600 000 in rates into a trust account, most of which was spent on repairing collapsed waterworks. They recently asked the courts to compel Tswaing municipality to present residents with a service-delivery plan by February 2010, but lost on technical grounds. No costs order was awarded. Now they have applied to force the municipality to install a chlorinator after tests found drinking water was contaminated with sewage. “Again, this will become a test case to see if we can force municipalities to deliver constitutionally guaranteed services,” says Kelder.

DA councillor Gerhard de Bruyn warns the decision to withhold rates should not be taken lightly. “People must understand the risks involved. A tax boycott should be used as a last resort.”Kelder disagrees. He says municipalities will lose cases brought against non-paying residents if the residents can prove they exhausted all options and paid for services never rendered. “If you can establish a paper trail, there are no risks involved,” he argues. Kelder believes it’s up to residents to decide if they want to let their towns fall apart. “We are fighting this case by case, which takes time,” he says. “But at least people are sitting up and taking notice.” fw

Going Up in flames

Protests are increasingly taking an ugly turn in Mpumalanga. Piet Retief, Mashishing (Lydenburg), Balfour and Standerton have become the latest towns to go up in flames. In October the ANC government finally stepped in after cooperative governance minister Sicelo Shiceka released a report on the protests, showing an “escalating loss of confidence in governance”, financial mismanagement and a widespread “culture of patronage and nepotism”. Standerton was put under administration and its mayor and council fired.

A look at preceding events shows many of these outbursts could easily have been avoided. Thandukukhanya township outside Piet Retief erupted in a spontaneous outpouring of rage, which community leaders say could easily have been avoided.The Mkhondo Concerned Citizens Group, which claims to represent 350 000 people in the greater Piet Retief area, serviced by Mkhondo municipality, says a key grievance voiced vocally since 2006 is that nepotism, cronyism and corruption have caused a collapse in service delivery.

The group claims to have proof of municipal councillors appointing relatives and associates to top positions, awarding them lucrative contracts and tenders shoddily executed, taking bribes to allocate houses and stands to foreigners, and abusing state property, including for personal gain.
“We have real evidence that can stand in court, but no-one is interested in laying a charge because these people are politically connected,” says the group’s chairperson, Wandile Nkonyane. “An official sells the municipality’s diesel in the township, councillors and their children crash municipal cars while drunk, but instead of going to jail they’re driving another car the next day. Nothing ever happens to any of them.”

Despite regular hikes in rates and service fees, roads in the area are falling apart, community facilities, including those for health, sport and education, are badly maintained, and some rural areas are still waiting for the running water and electricity they were promised when they voted ANC in the 1994 elections. On 15 June community leaders held a mass meeting to bring their grievances to the attention of Mpumalanga premier David “DD” Mabuza. In response to a faxed memo, he promised to attend to their complaints personally two weeks later. By late afternoon on 28 June a 3 000-strong crowd had grown tired of waiting in a soccer stadium all day for him to arrive. Armed with petrol bombs and knobkieries, they went on the rampage. That night, and the next day, protesters torched two municipal trucks and burned down a hall, clinic, library and four houses belonging to officials, including the mayor, who is now in hiding. Seven protesters were arrested and two shot dead, their funerals sparking a fresh wave of violence a week later.

When he finally arrived in Thandukukhanya on 30 June, Mabuza did precisely what the community had asked for two weeks earlier: he placed the municipality under administration and suspended its officials pending the outcome of a forensic investigation. The administrator was tasked with restoring services.

At the time Mabuza’s office rejected suggestions that Mpumalanga is becoming ungovernable. “There are challenges in governance, but we are dealing with them,” said his spokesperson, Ntime Skosana. But matters simply got worse.The same drama played itself out at Volksrust and Mashishing (Lydenburg). The Pixley ka Seme municipality at Volksrust was placed under administration when protesters took to the streets in February, seven months after an earlier uprising. On both occasions residents protested against unilateral tariff hikes amid service delivery failures, and claimed to have evidence of corruption, nepotism and financial mismanagement among municipal officials.

In the meantime, the violence shows no signs of abating. Weeks later Balfour, a predominantly farming district, erupted. Protesters tried to burn down the new house being constructed for the mayor, before being stopped by police.

Ratepayers and township protesters have yet to join forces. But it’s clear many share the same concerns. As National Taxpayers Union head Jaap Kelder told Farmer’s Weekly recently, it was important to realise disgruntled ratepayers are not small groups of white elitists longing for the old days.
“Black people often feel the effects of municipal collapse first and in many cases are more frustrated with municipalities than whites,” he said. “If government doesn’t address this issue, more municipalities are going to go the same way.”

4 Opinion(s):

Anonymous said...

H-m-m-m-m.

Are the great unwashed waking up to the fact that life under apart-hate was not so bad, or are they merely waking up to the fact that the ANC are a collection of rogues and scoundrels.

Anonymous said...

And amazingly there are still people who believe there is hope, or there will be some miracle tomorrow. This corruption,mismanagement and incompetence will only gets worse each year. And every year there will be less tax in the coffers and an ever exploding population demanding free services.

Yep, things sure are peachy in Mandelatopia

Anonymous said...

Township creep: Townships were like that in the 80s - raw sewage, rotten roads, etc.

Islandshark said...

@ Anon 6:35pm: How many townships did you see in the 80s?