Bitou budget comes under scrutiny
PLETTENBERG BAY -
The Plettenberg Bay Ratepayers and Residents Association (PBRRA) has expressed concern about the quality of leadership and management capability in the Bitou Municipality, in a review of the town's draft 2024/25 budget .
In a letter to members, chairperson Steve Pattinson said despite ongoing employee cost increases, “especially in senior management where we know experience and skills gaps exist”, little is said about the hiring of “top talent”.
“Political interference in senior management hiring is often at the expense of competence. The increase in capital spend in 2024/25 to R183m, will demand greater project management skills and financial management and controls,” said Pattinson.
While the budget “is comprehensive and well articulated” he highlighted the leadership and management issues as one of three concerns the PBRA has.
Oher concerns include:
The sustainability of the rates and services paying base to continually absorb above inflation increases and to subsidise the exponential growth in indigents and non payers.
“Bitou had zero economic growth in 2023, and while indigent support and upliftment are important, they need to be balanced with economic drivers that provide a more enabling environment for growth and job creation."
Cost increases “are inevitable and while we agree with cost reflective tariffs”, the municipality must demonstrate greater fiscal discipline and eliminate the unnecessary expenditures.
Pattinson said if ratepayers are to trust their claims of austerity measures and operational efficiencies, the budget should outline the these efforts more clearly.
Positives
“On the positive side, the financial recovery led by CFO Felix Lotter and team continues to gain traction,” he said.
The revenue collection has improved markedly to 90%, the highest in seven years. The key financial ratios are improving, although not yet at best practice benchmark levels.
The capital funding is increased, but in light of decreasing grants from national government, 27% will be municipal-own funding from borrowing; and meters will be moved from within household walls to outside so they can be easily and accurately read if they cannot be accessed, Meters to read consumption remotely are also in the planning.
However...
Most tariffs are once again above inflation. “While we accept the importance of tariffs being cost reflective, these increases could have been further mitigated by disciplined cost control and efficiencies," Pattinson said.
Employee costs continue to grow, driven in part by the ‘correction factors’ between senior manager/director and manager salaries;
PBRRA is of the view that overall management capability and competence levels have deteriorated due to the various open positions and acting appointments within the administration.
Judging from the internal debate on which political party gets to fill key administrative positions, “we anticipate further instability and we fear that political agendas are driving recruitment decisions and not competence nor experience,” Pattinson said.
Other specific items highlighted
Over R12-million is budgeted for EPWP workers, of which only R1,5m is subsidised by National Treasury. The R12m figure is for salaries only; it does not include the cost of uniforms, transport, supervision and administration. "A more sustainable form of job creation should be pursued. We would like to see the plan for EPWP workers - what tasks will they be assigned to do, how will the projects be measured?"
Bitou is spending R100m on free services for the indigent, a 40% increase over 2023/24. "It is national government's responsibility to fund this programme, but they only subsidise a portion with an ‘equitable share’ grant. We have asked what portion Bitou will fund but have not received a response."
Employee costs will increase by 10,2% to R377m (including councillors) which is 38,8% of the operating budget. The increases are due to higher salaries, provision for performance bonuses, more bodyguards for elected officials, increased cell phone allowances, and other perks.
The 'senior manager' remuneration will increase from R12,9m to R17,5m, or 34,9%. 'Other staff' will increase from R322m to R352m, for a 9,4% increase. Just in 2023/24 the salary for the municipal manager and three directors increased by R1-million.
The Repairs and Maintenance budget for infrastructure will only increase from R19m to R22m, less than half of the overall maintenance budget of R4,4m. "We question
We fear that political agendas are driving recruitment decisions.
whether this is sufficient to deal with the almost daily pipe bursts, electricity problems and sewerage spills, which contribute greatly to the R20m in overtime. Water tariffs are based on a 25% water distribution loss, so capital funds for pipe replacement and better meters are critical to controlling our water costs," Pattinson said.