Knysna destroying it’s own tourism potential
Stephen de Vries, Knysna writes:
Knysna tourism sector, our main economic driver, seems to be the next victim of the continued political instability within the DA. The DA-led council has failed to resolve through which mechanism to deliver the tourism function for the past five years.
On 24 January 2013, Knysna council resolved to extend the service level agreement (SLA) with Knysna Tourism for one year and that “the final draft options relating to the future of the entity to be tabled with council for consideration, with concomitant recommendations”. A year later on 24 March 2014, in the absence of any report on future options, council again extended the SLA and endorsed in principle the organisational changes in Knysna Tourism (then Knysna & Partners). At this stage, council seems to be satisfied with the service and new accountability measures put in place including reporting monthly to the portfolio committee. What happened to Section 78 report?
Two years later, on 27 August 2015, and yet again in the absence of a report on future options, council agreed to a new SLA for 12 months and resolved that “the municipal manager be instructed to immediately undertake an investigation as per Section 78 of the Local Government: Municipal Systems Act, 2000 regarding the mechanism to provide the local tourism function”. The options to be investigated was to continue with current arrangement through grant-inaid, deliver the service in-house, municipal entity or using supply chain process (tender).
Three year later on 31May 2016, in the absence of the Section 78 report on the options, council yet again extended the SLA and resolved that “an amplified comprehensive report on the delivery of the local tourism municipal function be submitted to a special municipal council meeting where, among others, the following delivery mechanisms are discussed and analysed. The three options to be investigated were a municipal entity, independent body and a public-private partnership. Council even resolved to investigate the reasons why the 2015 resolution was not implemented. Still no mention of report
Four years later on 26 May 2017, council agreed “that the new service level agreement be for a period of up to three years and that an amount of up to R4-million per year be provided for in the annual budgets approved by the municipal council” and “that the new service level agreement be negotiated on behalf of the municipality by a working group consisting of the executive mayor, executive deputy mayor, acting municipal manager and the director Planning and Development”. Important to note that no mention of the Section 78 report and the investigation into the reasons for not executing the 2015 council resolution, was made. Needless to say, to date (26 June 2018) there is no signed SLA.
Today five years later, no SLA and Knysna Tourism about to close. How did we get here?
Five years ago, someone in Knysna Municipality, supported by some in the private sector, mooted the idea of putting the tourism function out on tender and a report was brought to council stating that the grant-in-aid arrangement was illegal because tourism is a municipal function and must be done in terms of supply chain management. Tourism SLA more lucrative?
No mention was made of the grant-inaid for Knysna Animal Welfare and LIRA (for Steenbok Nature Reserve) and Pledge Nature Reserve. Local tourism, pounds (animal) and parks are all municipal functions in terms of the Constitution and the organisations, above all, deliver a service on behalf of the municipality – all legally in terms of signed SLAs and budgeted annually by the municipality. However, it seems that the SLA with Knysna Tourism was the only concern for some, perhaps because it looks more lucrative than the others. Just saying.
SLAs between municipalities and local tourism bodies are the most common arrangement across the country. Every year the municipalities, through its transparent grant-in-aid processes, sign SLAs with local tourism bodies.
Knysna Tourism is not a private forprofit company, but a not-for-profit company established in terms of Section 21 of Companies Act 61 of 1973 and is membership based. Too many legal opinions
Importantly, the Auditor-General to date has not queried or qualified Knysna Municipality for the SLA with Knysna Tourism. So why the fuss? Apparently, two opposing legal opinions were sourced by Knysna Municipality recently, because of the divisions within the local governing party – another common bad governance practice by the local DA to deal with opposing views within the party even before matters get to council. A legal opinion is what is, an opinion, not law or a court judgement.
The political instability has led to indecisiveness, uncertainty and a municipal administration not sure which decisions to execute, due to interference in the administration. For the past five years, experienced and committed board members have left because of the uncertainty and difficulty to do long-term planning. Knysna deserves better.
My advice to Knysna council: 1) Urgently renew the contract with Knysna Tourism at least for 24 months with specific key performance indicators and accountability measures. 2) Complete Section 78 report within 12 months and decide on mechanism to deliver function. 3) Give sufficient notice to Knysna Tourism of decision. 4) Lastly, if you are afraid to govern without legal opinions, at least get a declaratory order from a high court on the legality of the funding.
Finally, this opinion is not in support of a never-ending, long-term arrangement with Knysna Tourism. My support for a particular mechanism to deliver the tourism function is well known. I will expand on my view in another commentary.