Letter from the Mayor

Wow! What a response to my newsletter. I don't know how to even start thanking all those many, many people who have expressed their support and offered their skills and time to assist with the task of once again making Plettenberg Bay and the Bitou Municipality something to be proud of. Thanks everyone!

Before sending out last week's newsletter, I was afraid that the bad news, which I felt I had to convey, would have a negative impact on our town's struggling economy. What was especially worrying to me is that by revealing the extent of our financial and governance problems – (Yes, I'm saying problems and not challenges) –it would scare off potential investors and creditors to the detriment of our town's economy.

It appears, however, that people want to know the truth, and they want to know the whole truth, bad as it may be. But fortunately it is not all gloom and doom. There are some very bright spots as well. So I'm going to divide my newsletters into two parts from now on, the Good News and the Bad News.

GOOD NEWS

Amongst all the gloom and doom of fraud, corruption, maladministration and mismanagement in many of the departments, the Water and Sewage department showed us all that, even under the most terrible conditions that the municipality has worked under for years, a department and its people can overcome the general collapse in standards and service delivery and still shine.

Not only do they shine, they deliver potable water and discharge waste water at a standard far exceeding the average standards in South Africa, and they deliver service comparable with the very best in the world!

They have achieved this without massive expenditure and have done so quietly and efficiently. They just put their heads down and did the work at hand. Well done all those involved!

MORE GOOD NEWS.

We are starting, with the help of the Acting Municipal Manager, Duppie du Plessis, to get a better idea of where we actually find ourselves as an organisation, especially with regard to our financial status. It is still a surprise-a-day as things emerge. I will share some of these with you under Bad News.

I have met with the MEC for Local Government, Anton Bredell, and he has agreed to provide expert assistance in the fields of Local Government, Human Resources and Town Planning. We are already receiving extensive legal assistance and this will continue .The really good news in this is that it means we do not have to pay consultants to do this work. It could save the municipality several million rand in the long term.

We are also to receive similar assistance with our financial management.

Bad News.

Where to start?

Financially we are in dire straits. It overshadows everything and dictates every decision we take. But more about that lower down.

LEGAL WOES.

Please note that what follows cannot be taken to be the official standpoint of the municipality or to have any legal significance. It is simply a layman's understanding of some pretty complicated legal stuff. As the legal eagles say, it is entirely WITHOUT PREJUDICE.

We walked into several legal wrangles which we have had to try to deal with as best we can, always keeping in mind that we have to limit costs. Almost immediately we found that the municipality was involved in all kinds of expensive litigation apparently without good reason or prospects.

SUPREME COURT OF APPEAL APPLICATION.

The suspended Municipal Manager and the Bitou Municipality had sued me and my attorney for defamation (R300k each) in the High Court in Cape Town. This despite the fact that it is well established in the common law and case law that a state or state department and /or official cannot sue for defamation.

Several hundred thousand in legal costs later, the Deputy Judge President of the Cape High Court, Judge Janet Traverso ruled against them with costs. They then applied to the High Court for leave to appeal a very clear judgement coming from the second most senior and highly respected judge in the Province. Leave to appeal was denied with costs.

Still the spending did not stop. They then proceeded with an application for leave to appeal to the highest (and most expensive) court in the land, the Supreme Court of Appeal in Bloemfontein.

That is where this council found the matter. It was a ridiculous state of affairs and council had to take a decision to stop the process before more money went down the drain. As you all know, however, Council was prevented from doing its work and by the time we were in a position to take the necessary steps to stop the process it was too late. On 1 August the application was turned down, again with costs awarded against the municipality.

Apart from all the money already wasted, this means that the municipality will now also have to pay my and my attorney's substantial costs. We will try to limit these costs as far as possible. If it is found that this whole futile exercise amounted to fruitless and wasteful expenditure, the municipality is compelled by law to recover the money from those who authorised the expenditure.

CIVILS 2000 ARBITRATION.

In short, Civils 2000 is the contractor who rebuilt Main Street. In the process it appears that the project was not properly managed and many changes and additions to the original plan were made during the process. This gave rise to additional costs, eventually totalling in excess of R4m, being claimed against the municipality.

Drawn-out preparations for arbitration to take place this week ensued. When we eventually managed to recover the working files from the firm of attorneys representing us, it turned out that, to put it mildly, the process had not been handled as well as it could have been and that we were essentially in a hopeless position going into the arbitration hearing.

Late on Friday afternoon, the attorney who had taken over the case at the last moment, John Gillespie, and our Counsel in Cape Town, managed to pull the proverbial rabbit out of the hat. They managed to negotiate a settlement at R1.455m. That is less than half the original claim. The additional saving on three day's arbitration hearing is enormous.

TENDERPRENEURS AND PAVING BLOCKS.

We have suspected for a long time that our procurement processes were being flouted and that tenderpreneurs connected to the previous regime and officials were siphoning millions out of the municipal coffers. We were, however, always prevented from obtaining hard proof. Now we find proof of this all over.

A local supplier has started recovery of road-building materials and concrete pavers used on three road building projects, mainly in Kwanokuthula. The contractor had bought the material on account and agreed that the supplier retains ownership until paid in full. The contractor defaulted and the supplier is now entitled to recover all the material supplied unless the municipality pays up. Needless to say, the tenderpreneur has already been paid by the municipality.

It appears that the total amount involved is in excess of R500k and it is highly unlikely that the tenderpreneurs involved will be able to pay. The total damage to the municipality will of course be far higher as all the work already done will be destroyed in the process and will one day have to be redone. In the meantime those who were supposed to benefit will be left with a mess.

One must of course also have sympathy for the supplier who finds himself with a huge irrecoverable debt which must impact severely on his business especially in these times where the building industry is in the doldrums.

We have to try to avert this disaster and will keep you informed of our progress.

So what is next...

I could go on, but suffice it to say our debt continues to rise and we will deal with it:

We are scrutinizing every expenditure and concentrating our resources only on our core responsibilities, as set out in the Constitution. We cannot continue to fund projects that are the responsibility of provincial or national departments, such as education or child development; nor can we fund unfunded mandates.

We have to stop all donations by the municipality – we cannot give away money we don’t have. We cannot use municipal money for other than strictly service delivery for the foreseeable future.

With the help of experts we will determine the budget we need to work within, and then we will work within that budget.

More about this in my next newsletter.

You asked for truth and transparency and that is what I will give you. Please do not pay heed to the many rumours currently circulating. We know that there is an SMS doing the rounds saying that we have dismissed 100 people. This is not so. If we could have our way we would not dismiss a single person. Sadly the way things stand it is inevitable that there will be some job losses, but we will limit these as far as possible.

Again, thank you for your over-whelming interest and support.

Memory Booysen

Mayor

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