KwaDukuza municipality has failed to placate outraged ratepayers on its proposal to buy two floors of a building for additional office space at a cost of R15 million.
Two floors of the OK Mall in KwaDukuza town centre would cost R13 million.
The municipality has applied for a R15 million loan from Nedbank with the extra R2 million apparently for renovations.
Civil society groups have slammed the deal, coming in the middle of the pandemic-induced recession.
They have questioned whether the proposed deal is sensible, considering KDM’s current limited financial capacity.
Representing the KwaDukuza Residents Forum, attorney Riaan Verster questioned the lack of meaningful transparency in the purchase, funded by ratepayer money.
“The proposal is questionable for many different reasons, but the most peculiar aspect of this is that property in question has not had a proper occupational certificate since it was built in the 1970s. What kind of example does this set for the ratepayers when it seems the municipality flouts its own bylaws?” he questioned.
Verster has written to the bank asking that a “thorough due diligence be done to ensure that both the residents and ratepayers of KwaDukuza are protected against questionable property transactions”.
Prem Maharaj of the Stanger-based Human Rights Association said they were against the deal and urged KDM to reconsider as ratepayers were burdened with mounting financial insecurity.
“There are many offices in the current buildings at Gizenga Street and the Lavopierre building which can accommodate additional staff. Secondly, a new block was recently built in the Lavopierre building. If planned properly the second and third floor could have been extended to the boundary wall for additional space.
“We cannot burden the consumers with this long term debt. The debt collection by all the municipalities from the time of lockdown has fallen sharply and it can only get worse.”
Maharaj said KDM was leasing a block of offices in the OK mall for R215 000 per month – and the offices are vacant.
The Dolphin Coast Residents and Ratepayers Association has called on council to cancel projects without a firm economic justification.
“Docrra remains unclear on the rationale and business case for this proposed purchase. As this information is not forthcoming from KDM, Docrra will now use other avenues at its disposal to unpack this issue fully and then formulate our response and inform our members. It is regrettable that KDM is choosing to make this process complicated and thereby raising concerns,” said Docrra chairperson Deon Viljoen.
Cllr Moosa Motala of the Inkatha Freedom Party said the OK property exceeded its floor area ratio and there were no provisions for disabled toilets and other facilities.
“The parking area has offices and there is no fire escape and no assembly area in case of a fire. A lot of the requirements in terms of the tender were also not met,” said Motala.
According to minutes of the Local Command Council virtual meeting on August 31, total municipal expenses for July amounted to R171 million against revenue collection of R109 million – a shortfall of R61 million.
While the municipal collection rate was higher in August, the total municipal expenses were R194 million.
The spike in expenditure included August staff salaries of R40 million, Eskom at R105 million and capital payments of R22 million.
KDM municipal manager, Nhlanhla Mdakane said in response to Docrra the information on the proposed purchase has been made public in terms of Section 46 of the Municipal Finance Management Act of 56 of 2003.
“Council took a resolution for the outright purchase of office accommodation to address the operational challenges that municipal staff are facing.
“Subsequent to that management then activated council’s decision in terms of undertaking the required SCM processes to obtain the loan funding as well as purchase office space which will shelter different business units.
“The bid for the outright purchase of office accommodation is in progress as it was advertised and there are various stages which are required to undertaken by law prior to the final decision.”