KNYSNA NEWS - An open letter to Knysna Municipality raising questions about the town's finances and how residents should pay their rates accounts – monthly or annually in advance – has hit raw nerves.

The open letter from a concerned Knysna resident asked how many objections had been received against the general valuations. 

According to Knysna Municipal Manager Ombali Sebola there were 1 400 objections, out of 23 000 properties, saying the writer's claim of 4 000 was a mistake.

Asked whether it was legal to bill rates annually in advance, Sebola said rates are billed annually in line with council's approved section 8.19.1( e) of the Customer Care, Credit Control, Debt Collection, Indigent and Tampering Policy for 2023/2024.

DA Ward 9 councillor Sharon Sabbagh has urged homeowners to pay their rates bills monthly, rather than annually in advance. Residents receive no benefit in effecting payment of the entire rates account for the year (annually in advance). Sabbagh pointed out that should Wards 9 and 10 (which contribute 66% of the total rates payable to the Municipality), pay the total of their rates for the year that will result in a windfall for the municipality in an amount of R210m.

Sebola responded that "homeowners are billed property rates as per their preference (annually or monthly)". Sebola was also pressed, but did not deny, that there was an "average 30% increase in rates", as was claimed in the open letter. 

"The tariff approved by the council for residential properties was reduced by 10% , the rates are calculated as per the property valuation, each property is affected differently, and it was revalued according to market-related valuation," said Sebola.

Ward 9 councillor Sharon Sabbagh

A word from the chamber

The Greater Knysna Business Chamber (GKBC) has said that the municipality is in a dire financial position given the comments from the mayor and finance officials published in the Knysna Municipality's Monthly Budget Statement for July. 

"The municipality's projections assume that most ratepayers will settle their annual rates accounts in full by September, but we encourage our members and supporters who might consider payment of annual rates upfront, to rather pay only the monthly billed amounts," said GKBC chairperson, Pierre Gouws.

"Monthly payment will ensure a steady cash flow for both ratepayers and the municipality throughout the year, and will prevent funds received upfront from being spent now, which would result in serious cash flow issues further down the road. We call on the municipality to get their house in order, and to put measures and controls in place that will ensure proper cash flow management and cost control. 

"Many residents may only become aware of the unprecedented increase in rates and taxes when they receive their July accounts," said Gouws.

Knysna Municipality

Staff bill and funding

Asked if it would not be better to bill the rates monthly to assist the municipality to manage its cash flow, Sebola said "customers can apply to pay monthly". Sebola said the municipality's monthly staff bill was approximately R23,3m, not the R29m referred to in the open letter which also asked if the municipality's monthly income covered this. 

Sebola said the municipality "has a fully-funded budget, which means that all operating expenditure is funded from the revenue".

Asked whether the municipality was considering outside funding to cover its shortfall, Sebola said the only external funding that the municipality relies on "relates to grants from the relevant Treasuries and borrowings from banks to fund capital projects".

 Sebola confirmed the letter's content that "at least" 50 new people were employed by the municipality, but said "these are temporary positions". Sebola said the amount of R21,3m in unpaid conditional grants mainly related to uncollected grants due from the Department of Human Settlements.

WC Premier Alan Winde

A gust of Winde

Western Cape Premier Alan Winde, who was born in Knysna and says it is "my town", has also had his say. He said provincial treasury officials were interacting with the municipality to find a solution to the dire financial position it finds itself in.

In an interview with KPH while attending provincial government business in next-door Plettenberg Bay this week, Winde described the situation in Knysna as "a mess".

He said in spite of all the emails he has received urging him to step in, the province cannot intervene directly. Winde said that with each month that passes without a solution, the citizens suffer more. 

"I'm very happy if the town makes a decision to say, come and help us and put a section 139 intervention in place… (as has happened in Beaufort West)." He said otherwise province would have to follow the lengthy legal route.

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