Communication with Premier Winde
February 17, 2023
Plett RPA’s DRAFT 2021/22 Annual Report Oversight Report
March 7, 2023

Report back to Members

16 February 2023

Dear Members,

We are becoming increasingly concerned about the ongoing lack of sound financial management of Bitou and the inevitable adverse impact this will have on debt levels and service delivery. We wanted to share with you those areas of concern.

Proposed R38 million loan. 

Premier Winde and Provincial Treasury informed us that they had been in contact with Bitou regarding the loan, and due to Bitou’s weak liquidity position, advised Bitou to either reconsider the loan or to reduce it.

We had hoped that the December financial report would give us some indication that progress was being made with regard to our finances, however the report was not published and we are in the dark as to the current financial state of affairs. Therefore, we stand by our position that NO BORROWING can be accepted, nor can increased tariffs to cover the costs thereof, be accepted.

The council will vote on the loan on 28 February and we hope that they will not go against our members’ expressed wishes and enter into this loan that we all will have to pay back at huge expense.

We will report back on which councillors support the motion.

Increased salaries for Municipal Manager and his senior managers.

On 8 August 2022, we requested MEC Bredell to inform us should Bitou Municipality request his permission to implement a Scarce Skills Allowance in order that we may participate in the process by making appropriate representations.

MEC Bredell was also made aware from the same letter that we have instituted legal action against the municipality in an effort to recover similar payments made unlawfully in the past.

In the same month, August 2022, our municipality made the unprecedented admission that it is technically insolvent and has a serious cash flow problem.

It has now come to our attention that in that same month, council held an “in committee” council meeting (in secret) to quite bizarrely propose salary increases and the implementation of a Scarce Skills Allowance.

As a result of the secrecy with which the matter was treated, we only became aware of it when the minutes of the council meeting were published on 31 January 2023 agenda.

I quote:


1. That the contents of the report be noted.

2. That, it be noted that the Minister for Local Government in the Western Cape has supported the waiver application to the National Minister as per the amounts determined in Council Item C/1/84/08/22.

3. That it be noted that no response has been forthcoming from the National Minister of COGTA.

4. That to ensure continuity in management and institutional stability in the organization coupled to the fact that it is the duty of Council to ensure that fair labour practices are applied in Bitou Municipality, the all-inclusive annual remuneration packages payable to the Municipal Manager and Senior Managers reporting directly to the Municipal Manager be determined as per Council Resolution C/1/84/08/22 dated 31 August 2022 with effect from the respective dates of employment.

5. That the Mayor be authorised to conclude the addendum to the employment contract with the Municipal Manager to give effect to the resolution in point (4) above.

6. That the Municipal Manager be authorised to conclude the addendum to the employment contracts with the relevant Head of Departments to give effect to recommendation (4) above.

Proposed: Councillor A R Olivier

Seconded: Councillor D J Swart

FOR EXECUTION: Acting Chief Financial Officer

The financial implications of this council resolution were omitted from the council item, but we estimate it to be at least R700,000 or more per year, providing no improvement to service delivery nor relief for the poor.

It is our considered opinion that there is no rational reason to pay a “Scarce Skills Allowance” to attract or compensate people for working in Plettenberg Bay.  The Western Cape, and more specifically the Garden Route, is one of the most sought after areas for people to live and work.

As far as Mr Memani specifically is concerned, he was undeniably satisfied with the level of remuneration when he left Cederberg Municipality and took up employment with Bitou last April. The same obviously goes for the other incumbents who will undeservedly benefit from the council’s largess with our money.

We are contemplating our options and will keep you informed.

Wasteful expenditure. 

It is greatly concerning to see so many cases of wasteful and irregular expenditure and little to no evidence of cost reductions and austerity measures that are so urgently required to balance our budget.

We see evidence of:

  • Standby allowances for office staff, like SCM, who have no reason whatsoever to ever be on standby;
  • No effort to bring R20 million in overtime costs under control which the A-G, the mayor and the CFO have identified as totally out of control;
  • Overtime payments to EPWP workers;
  • Positions added to the organogram where no need exists;
  • Political appointees, who the mayor refuses to even identify despite our PAIA application;
  • The appointment of IPM Councillor Kolwapi, our MPAC chair on a “full time” scale at an additional cost of almost R300k per annum to us. (MPAC has written off over a hundred million with no consequence management or recovery of looted funds evident.);
  • And the cherry on the cake, a 20% increase in salary level to attract people to apply for the positions they already occupy.

We are therefore extremely disappointed that our councillors have chosen to support these excessive and unnecessary expenditures over financial disciplines  and good governance as expected and promised.

In conclusion…

Against the background of a bloated organisation structure, burgeoning wasteful expenditure, dysfunctional supply chain management, poor consequence management, shockingly poor budgeting, costly inefficiencies in delivering of services, and a lack of capacity on almost all fronts, it is becoming impossible to maintain trust. Our town is in dire financial straits and we cannot allow reckless and irrational decisions to drive it over the proverbial cliff.

The Executive Mayor and Municipal Manager acknowledge there is “fat” in the current budget of at least R100 million for this financial year alone. It is enough to fund more than double the proposed borrowings, and virtually eliminate the need to increase tariffs. All that is needed is the political will, strong leadership and competent management.

Our AGM is scheduled for 29 March 2023, where we will provide further updates.

Kind regards,

Peter Gaylard