Court sinks St Francis Bay rates surge
Opinion divided as luxury resort town’s special rating area ruled unlawful
A court ruling on a St Francis Bay special rating area with a R75m plan to beef up security, fix crumbling roads and shore up a disappearing beach has highlighted the challenges as communities face up to a range of pressing problems.
The ruling that the special rating area (SRA) is unlawful and must be annulled was welcomed by one group of St Francis Bay residents which said the entity and its fundraising scheme were flawed because some people were left out of the consultation process.
It also said the initiative was unfair because a third of the ratepayers, many of them pensioners, were bearing the cost of projects which benefited everyone.
But the ruling was slammed by another ratepayers’ group, which said the SRA and levies were desperately needed when they were introduced to address plummeting property values in the luxury resort town, and they had already turned that dire situation around.
At the heart of the matter are several deep-seated SA problems, including rising crime and decaying public infrastructure.
A third issue, prevalent in towns up and down the Eastern Cape coast, arises from unsuitable development in decades past, which has sealed the natural passage of dune sand and eroded a prized St Francis Bay beach.
Spring high tides and storm surges ballooned by climate change have resulted in the sea battering the shore just below the multimillion-rand homes lining the south and centre of the beach, and crashing through the sand spit protecting the canal precinct on its north side.
In her April 26 ruling in Gqeberha’s high court, judge Nozuko Mjali said the rationale behind the establishment of the SRA was based on the belief that it could reverse the steady deterioration of infrastructure and service provision, which the Kouga municipality, as the first respondent in the case, “was either unwilling or incapable to do”.
“The [Kouga municipality] admits not having funds to deal with the steady infrastructural deterioration in that area.”
Mjali said in 2016, the national environment department authorised the municipality to fix the beach and spit and the municipality delegated that authority to the St Francis Bay Property Owners nonprofit company, the third respondent in the case.
“Further funding was to come from the levies that would be collected by the municipality ...
“The amounts collected would be paid into the banking account of the [non-profit company].”
The judge said the municipality issued a notice in December 2017 stating its intention to adjust bylaws to allow for the establishment of an SRA but the closing date for comments was the day after this was done.
A public meeting also took place but, according to the Concerned Residents Association, many of its members did not know about it, and the necessary effort to get people who could not read or write involved was not made.
She said in January 2018, the municipal manager had nevertheless stated his support for the beach-rescue proposal by the St Francis Bay Property Owners Association “indicating that the ... spit would certainly breach sooner rather than later and that emergency repair work was needed to ward off disaster”.
Mjali said she agreed with the application by the Concerned Residents Association for the SRA to be scrapped.
“On the constitutional challenge, the papers demonstrate clearly no regard was had for people who might have special needs in the community.
“There were no provisions made to include them in the process of the adoption of the rates bylaws and the creation of the SRA.
“As such, they were effectively excluded from the process.
“The decision of the [Kouga
municipality] to declare a special rates area is hereby declared to be unlawful and is set aside.”
Kouga spokesperson Monique Basson said the municipality had taken note of the court ruling and that it intended to appeal against the judgment.
St Francis Bay Property Owners Association chair Wayne Furphy said none of the points made in Mjali’s ruling had been under the control of the association.
“We simply made the application to form the SRA, and it was granted.
“Nevertheless, we will be appealing against this judgment as we feel it was deeply flawed.”
He said the SRA application had been made in desperation.
“The town was going backwards.
“Crime was on the rise, the roads were terrible and the beach was a mess.
“Property values were plummeting.
“We had to do something. “We realised we needed to establish a special rating area to help us raise funds to fix these things as the municipality was not getting to them.
“We ran the SRA vote focusing on the canals and the village as we felt those were the areas that would be most directly affected by the projects we had prioritised.
“Only 7% of residents voted no.”
He said in terms of the SRA that was then established, residents were required to pay 25% of their rates as a levy attached to their monthly services bill.
“Because the levy is aligned with rates, the more affluent ratepayers pay much more than the less affluent.
“For those who really cannot pay, we have a relief fund which we established specially and which is made available discreetly and by an independent body to those eligible.”
He said the scheme had, since it was introduced in mid2018, raised R7.5m a year.
“Over 10 years that will accrue [to] R75m.
“Of the R28m we have raised so far, we have spent about R600,000 on salaries for a project manager, an engineer and an administrator, R4m on installing security cameras and establishing a control room and reaction team, R2m on fixing roads and R2m on the beach environmental impact assessment, which was finally authorised last month.”
Furphy said the beach rescue plan was budgeted at R105m and the balance, to be added to the levy funds, would come from contributions different organisations had committed to as well as donations and loans.
“Up to six groynes will be installed along the beach and one million cubic metres of sand dredged from silted-up points on the Kromme River will be brought across.”
A groyne is a shore-protection structure resembling a pier.
“The aim is to grow the beach and in this way to push the sea back 40m from the spit and the rock and concrete revetments [sloping structures to reduce erosion] beneath the beachfront homes.”
Concerned Residents Association chair Angela GawkerCadman said it was not opposed to the establishment of an SRA.
“But we are opposed to the way it is implemented in St Francis Bay.
“Only approximately onethird of the property owners in St Francis Bay are paying the SRA levy, yet the identified projects the money will fund are to the benefit of all residents in St Francis Bay and not only those in the SRA area.”
She said pensioners in other municipalities in SA were exempted from SRA levies but this was not the case in St Francis Bay.
“Pensioners who cannot afford to pay have to humiliate themselves and apply for an exception.
“The judgment fully vindicates the challenge by the [association].”
She said what happened next would be pivotal.
“The judgment creates the opportunity to reunify the community and rebuild relations with Kouga Local Municipality for a better St Francis Bay and a better Kouga by starting afresh.
“Appealing [against] the judgment will deepen the split in an already divided community, worsen municipal relationships and probably lead to more litigation.”
Roy Smith, also of the Concerned Residents Association, said the SRA as it was constituted meant 1,600 people were paying for benefits to be enjoyed by the total of 4,500 residents in Greater St Francis Bay.
“And the people that benefit the most are the people with homes in the canals and on the beachfront.”