Better solutions to delivery failure than rates boycotts

FINANCE Minister Pravin Gordhan said last week that it was "totally unacceptable" for ratepayer groups to refuse to pay their rates and put their money in trust accounts . By comparison a few months ago Freedom Front Plus leader Pieter Mulder said ratepayers should not have to pay taxes or their taxes should be reduced if municipalities do not deliver services.



Everyone has the right to engage in protest action at the local level but what are the limits of such action? Is it acceptable for ratepayers’ associations to withhold payment for rates and services?



The 2011 Local Government Budgets and Expenditure Review released last week by the Treasury notes that ratepayers in 42 towns have engaged in legally declared disputes paying rates and utility charges into trust accounts and at times delivering services themselves. One example is the Sannieshof Residents and Ratepayers’ Association part of Tswaing in North West. Chairwoman Carin Visser said residents took over the delivery of services in 2008 when they realised that the town which does not have waste-removal trucks was "collapsing" claiming the ratepayers’ association "cleans the streets maintain the graveyards repairs street lights and supplies bulbs".



Although the Treasury’s review notes that a ratepayer boycott can push vulnerable municipalities into a negative cash position it is difficult to determine the exact effect of rates boycotts on municipalities. While the National Taxpayers Union (NTU) to whom the ratepayers’ groups withholding money are aligned claims there are residents’ organisations in 220 municipalities that are withholding payment this cannot be verified. A study by the Community Law Centre at the University of the Western Cape in November last year found that less than R10m was being withheld countrywide and more than half of that was owed to just three municipalities.

While one may conclude that the effect on municipalities’ finances is not severe at least not at an aggregate level for the time being the Community Law Centre study points out that the political effect is the real danger.



A citizen’s obligation to pay local taxes is the foundation of democratic local government and where this relationship breaks down local democracy and the rule of law are undermined.



The Sannieshof case throws up other dynamics related to withholding rates that are further cause for concern. In the middle of last year Eskom stopped the supply of electricity to the water-supply and sew age plants in the area. It is unclear whether the withholding of rates by the local ratepayers’ association contributed to this or whether the Ngwathe municipality would have been unable to pay regardless of the boycott. One thing is certain: non payment by the majority of residents could not have helped this situation. Eventually the NTU through the local ratepayers’ organisation paid two bills directly to Eskom and the power supply was switched back on.



Jaap Kelder the leader of the NTU tried unsuccessfully to intervene personally with Eskom spokesman Andrew Etzinger and while it is unclear what Kelder’s preferred solution was it is interesting that Etzinger is on record as commenting that: "What we can’t do is isolate a particulate group of stakeholders in a municipal boundary … and continue supply to them." He said some ratepayers could not band together and pay 10% of that owed by a municipality and ask for supplies to continue although Eskom had no objection if they paid the total bill on behalf of the municipalities.



While in this example it is hard not to see ratepayers’ associations as white elites concerned exclusively with their own needs while the rest of the municipality collapses it must also be recognised that the situation is caused by a very real collapse of services and the degradation of physical infrastructure.



At heart is the issue of poor accountability by a municipality.

The Community Law Centre study in an assessment of five case studies found that ratepayers’ protests concerned specific and very real areas of neglect by their local municipalities: raw sewage flowing into local rivers or dams a lack of potable water tar roads being degraded general neglect of infrastructure such as verges cemeteries town gardens and sports grounds and the cutting off of electricity by Eskom due to nonpayment by the municipality. It is grossly unfair to expect ratepayers to pay for services that are not being provided and where local service infrastructure has collapsed.



While citizens very clearly have an obligation to pay local taxes more has to be done to solve standoffs where they feel so disheartened by service delivery levels and governance within their municipalities that boycotts become an attractive option. The obvious solution is that nondelivery and the collapse of infrastructure should be reversed. But this is neither easy nor quick especially considering the need to arrest underlying issues in municipalities such as a lack of capacity or at worst indifference ineptitude and corruption.



It also seems that a breakdown in communication between municipalities and local stakeholders is as much a problem as the underlying issues. Not to be glib but there is some truth in Gordhan’s comment that some of the problems ratepayers had with their municipalities could be resolved "the South African way: we sit around the table we say what our challenges are and we find practical solutions to them".



Certainly a large part of the solution is communication and the inclusion of local stakeholders in partnership with municipalities. It seems absurd that many ratepayers’ associations end up organising the delivery of services in parallel to the municipality. But partnership requires that council officials and employees as well as ratepayers’ associations join forces in instances where there is a high degree of hostility between them and in most cases with a clear racial dynamic.

It seems little has been done by municipalities or other spheres of government to communicate with such organisations or to acknowledge their real concerns and structures such as ward committees have failed to resolve tensions. The study conducted by the Community Law Centre found that local councils and provincial and national government did not play a significant role in trying to resolve disputes. It was left to the municipal manager and the mayor individually to liaise with ratepayers’ organisations as they saw fit.



The study recommends that the legal and administrative remedies available to citizens in the case of catastrophic service delivery failures should be assessed while institutional reforms in particular areas of governance and administration are needed. It is a great pity then that consultations between Co-operative Governance Minister Sicelo Shiceka and ratepayers’ associations have been stymied by Shiceka’s extended sick leave as these might have become an early warning system for municipal dysfunction.



Ultimately the underlying issue is the catastrophic failure of a number of municipalities to provide services. One is forced yet again to question whether local service delivery would not be better served in such municipalities via a different arrangement most logically in the case of the delivery of electricity by transferring the service directly to Eskom but perhaps more broadly in the delivery of other services too.