Mayor responds to burning issues

Madam – The front page article in the Advertiser of 18 September 2015 seems to pose more questions than answers and also contains untruths which can only be interpreted that some councillors are deliberately misinforming the public.

It is about time that the public are given the true facts, especially when it comes to how public funds are being spent and I think that the Newcastle Advertiser should be the body for raising questions and not to take certain councillors statements on face value but that they probe such statements and then give the readers an informative view and not necessarily that the mayor or councillors have the last say.

With regard to the above article the following needs clarification and exposure.

Firstly. while I am sure that the municipality will not charge the consumer more than the approved tariffs, it does seem ominous that many consumers are being billed so much more in the first month of the increased tariffs. The reasons given for these increases just do not ring true.

If consumptions are estimated the past average consumption is normally used which should not be a significant increase in units used.

Furthermore the statement that estimations were done because of shortage of staff but that the municipality are back to taking readings again implies that there were staff shortages for that particular month only!

Secondly it was reported that the new office block is funded from the Newcastle Municipality’s internal reserves. (Newcastle’s reserves are so to speak depleted).

This statement is not true. In the Advertiser of 15 August 2014 the municipality gave notice of it’s intention to source a long term loan for certain projects.

The bulk of the loan amounting to R194 million was to finance the 2014/15 capital budget for the new municipal offices. A loan totalling R284 839 959 was recently concluded with ABSA bank. This was not the first nor will it be the last loan for this building.

Despite the denials that the cost of the new offices do not affect the tariffs, the fact, or reality, is that the loans will have to be repaid and it can only be us, the consumer who will have to foot the bill.

For the so-called transparency the public should be informed how much the municipality pays for the rental of offices at the Nedbank building, what the total loan repayments for the new offices will be, and the assurance be given that the new offices will in fact house all the municipality’s departments and once occupied it will no longer be necessary to rent offices.

Lastly councillor Matthew Shunmugam stated that residents had to be aware of the times they were living in (times are tough and we need to tighten the belts).

To make such a statement while he, the mayor and two officials are making arrangements for a visit to the United Kingdom for a few days. It is unknown what the benefits of this trip will be. All costs for this will be paid by the Newcastle consumer and it is most concerning that this trip was approved by council without any idea of the costs involved.

Peter Hair

Response from Mayor, Afzul Rehman:

Thanks madam Editor, for the opportunity to respond.

Firstly I have a difference of opinion on the role of the local newspapers. Whilst I agree that they should provide information, the municipality itself goes on extensive roadshows to engage residents.

I am sad to say that these are poorly attended. Most of the questions in this letter are addressed during the roadshows, as they pertain directly to the budget.

It is not true that Newcastle municipalities surplus has been depleted. If anything, we are completely safe in terms of cash flow and have a healthy balance of over R400 million in reserves.

It is true that we have taken a loan for the past two financials years, but even these are far below the actual capital budget amounts needed. Our capital budgets per annum is in excess of R400 m and the loans were only to fund a portion of this.

The 2015/16 capital budget, with about R450 million, is completely internally funded through savings and does not require an external loan.

It is true that the building is part of the capital programme so these loans cover in part some portion of it. The repayment of the loans are comfortably budgeted within the expenditure of the municipality.

The rental used currently will off set some of these payments. The building will house most of our staff, excluding of course the personnel who need workshop and yard space for trucks etc.

We have been absolutely transparent in all issues finance, and the municipal budget is an open public document that can be found in most libraries.

The issue of reading meters have largely been discussed, where one month of estimations were done, resulting in the “short” payments for that month which was covered in the next bill, causing unnecessary financial burden on the ratepayers. I have declared my intention to intervene.

I agree with Cllr Shunmugan that times are tough, and the trip to the UK, which is taken to mean different things by different people, is a means trying to bring investment into South Africa in general and Newcastle in particular.

Other cities, including Durban, were well represented at the conference and it is important for us to pitch our city as an investment and holiday destination at any platform available.

Some may not see this as a necessity, but if you ask those who have been employed by the numerous companies that have invested in this city thorough initiatives such as these, they will tell you a different story.

Results may not be seen in the short term, but investment summits are not hosted by countries so that people can have a party. The British are very prudent about spending, and the fact that they hosted this summit, shows the seriousness in which they view uk to SA investments.

Job creation and investment promotion is indeed a priority of my administration.