Letter to Provincial Ministers regarding Bitou’s proposed R38 million loan

Dear Members,

Our last report to you concerning the proposed R38m loan by the Municipality refers.

Based on previous experience we believe it is highly unlikely that the Municipality will respond positively, or in fact at all, to our concerns. They have less than six weeks before they make a decision.

Should the loan be entered into it will cause irreparable harm to the municipality with interest charges running into tens of millions of rands that we can ill afford. We are committed to exhaust every avenue to avoid that happening.

We have therefore written to the Provincial MECs in the hope that they will intervene with suitable haste.

We have done so in the knowledge that they are a different sphere of government and that there is a separation between them. It is also a fact, as we regularly see in the press, that political parties do not hesitate to take harsh steps against their public representatives when they go against instructions of the party.

We are hopeful that the MECs will bring their political clout to bear and issue the appropriate instructions to their Bitou caucus as they regularly do in much less urgent circumstances.

We will keep you informed of their response.

Kind regards,
Peter Gaylard

16 January 2023

MEC of Local Government Anton Bredell

Minister of Finance Mireille Wenger
Minister of Infrastructure Tertuis Simmers
Western Cape Government

Dear Ministers,

Raising of long-term debt of R38.8 million for Bitou Municipality has reference.

The Plett Ratepayers’ Association wishes to make you aware of a notice from Bitou Municipality to raise a R38.8 million loan, at a cost of R30 million, and the reasons for Plett ratepayers’ strong opposition.

Scant information has been provided on why the municipality needs the full amount all at once, why they have not applied for MIG funding, whether it has gone through the tender process, why there has been no attempt to prioritize non-essential expenditure for these projects, nor how it will be repaid since we are insolvent.
Since Mayor Swart announced Bitou’s insolvency last August, we have not seen any cuts in spending, no revenue enhancements (for example, no attempt to draft hangar leases), no financial controls on virement levels or expenditure (half a milion rands were spent on standby allowances for municipal office staff), and no accountability or control over tenders, irregular expenditure or unauthorized expenditure.   And the proposed recovery plan lacks a “recovery” element.
Many ratepayers in Plett have written to the Municipal Manager and mayor voicing their opposition to the loan (see attachment of sample letters).
The common theme from Plett ratepayers is “stop wasting our money.”  The municipality has not shown good faith in managing our public funds, nor imposing sound financial management, and ratepayers are unwilling to give them another R38 million to squander.
The Council vote is 28 February, and the cut-off for comments to the loan is 31 January (loan notice is below).

May we please ask you to intervene and question your councillors and the MM as to whether this capital expenditure could not be covered with MIG funding, could many of the projects be deferred, and could reductions in non-essential expenditure fund the projects instead?  The MM and mayor have admitted that there is 15 to 20% fat in our budget.

The ratepayers of Plettenberg Bay will not be happy with an increase in rates and taxes to service this loan while the municipal staff are allowed to continue frivolously spending our money without restraint.

Kind regards,

Peter Gaylard


cc:  Mayor Dave Swart

Municipal Manager Memani

Read- 3 January letter to MM Memani and Mayor Swart