Defend Truth


Municipal Management Mindlessness – The new big crisis


Wayne Duvenage is a businessman and entrepreneur turned civil activist. Following former positions as CEO of AVIS and President of SA Vehicle Renting and Leasing Association, Duvenage has headed the Organisation Undoing Tax Abuse since its inception in 2012.

How is it possible in today’s world, where businesses and household incomes are under massive pressure from the pandemic induced lockdown, that virtually all our municipality and metro councils are planning to receive salary increases and with that, property tariffs are being budgeted for a rise in the coming year?

Let that sink in a little. With millions of citizens either having lost their jobs or had their salaries reduced, and hundreds of thousands of businesses either closed or on the brink of collapse, the people who manage your towns and cities cannot fathom the reality of the economic chaos around them. It’s as if the pressures on doing business in a depressed economy only applies to the world outside their gates and municipal corridors of uninspired power. 

There’s nothing like an insensitive attitude by municipal authorities to spark a greater pushback by residential communities. When it comes down to choosing between paying higher property tariffs or putting food on the table, the decision has now been made a lot easier.  Our municipal authorities just don’t get it.  

Just ask council members of most municipalities and metros around the country, if they are expecting (let alone deserving of) a salary increase for the coming financial year, and if they plan to increase property rates and tariffs this year. The most likely response will be along the lines of “yes why, is there a problem?” The goose that lays their bonus eggs will always be around… or so they think.  

The reality is that most municipal authorities cannot see the train of “substantively lower revenues” hurtling toward them, and at a pace they will be unable to react quickly enough to.  

Just 10 weeks ago before the coronavirus lockdown struck, the majority of South African municipalities were broke. Even our largest metros have less than a month of working cash available to them, let alone Treasury’s recommended level of 90 days. The obvious cash-flow challenges stemming from our current drastic economic decline, will have grave consequences on municipal management and service delivery.  

I recently engaged with a senior manager in the space of Local Government financial management, whose approach to the declining revenue collections (pre-coronavirus) was “that service delivery will simply have to decline with lower collection rate”. It never crossed his mind that the metro should urgently take steps to reduce waste and unnecessary expenses, remove unwarranted contractors and unproductive personnel, in order to maintain or improve service delivery levels. Neither did he consider what the council might be doing wrong when it comes to declining collections. In his mind, it was simply residents who were to blame. 

Ample research has exposed the gross deficit in skills needed to manage municipalities more professionally. This problem has been driven by the lack of political desire to appoint highly professional senior managers, because such appointees are less likely to implement questionable instructions than those who are beholden to their political principals. Cadre deployment ensures the appointment of party loyalists to manage the financial affairs of municipalities and state institutions. This, in turn, circumvents public accountability and brings the institution under the control of the party, as opposed to the state.

As a result, there is a significant lack of consequence management, leading to non-compliance and the resultant irregular expenditure and poor financial governance, a matter regularly reported on by the Auditor General’s office. This is not about to change overnight. 

So, here’s the nub of the crisis looming large over the next few months; A substantive rise in the fall-out between communities and administrators, to the extent that poor leadership and weak systems management will cause the total collapse of many more municipalities.  

The opportunity for change is now wide open for organised resident and business associations to seize. If they are able to act swiftly and apply the necessary legal steps (as was recently applied in Makana Municipality), they will be able to force their councils to step down and better still, to manage the municipal financial administration, as has been achieved in other municipalities before.   

There has been a massive spike in the call for local government tax revolts, which happens to be setting the scene for a sizable pushback by tax-paying communities against their administrators. The only way to circumvent the municipal meltdown, is for the office of the national minister of CoGTA, Nkosazana Dlamini Zuma, to become sensitive to the precarious nature of the crisis looming and place a moratorium on all council salary increases and property tariffs. More importantly, she needs to realise the current Local Government model is in need of urgent reform, with a lot more input required from the people.  

The sad reality is that the Provincial CoGTA MECs do not recognise or practise their oversight powers. This was recently borne out when Makana resident associations were successful in having a court ruling that instructed the defunct and ill-disciplined council of the Makana Municipality to step down. Instead of recognising the plight of the residents, the Provincial MEC in the Eastern Cape decided to join in the legal challenge and appealed the judgment to protect the failed councillors, only to lose their right to appeal. And while it is rather revolting to comprehend, the Makhana townsfolk are now a step closer to launching their own legally binding “tax revolt”.  

So, Mr/s Municipal Managers, Mayors and short-sighted councillors, press on with your planned salary increases and tariff hikes. Continue to ignore civil society’s calls for a moratorium on these increases at your own peril. Keep your blinkers on and continue to deny the economic crisis out there applies equally to you. Keep on pretending it’s all just a big fallacy and that everything will be just dandy. 

And don’t say you weren’t warned. DM


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