KwaDukuza municipality’s recent proposal to acquire additional office space has come under fire with critics calling on the municipality, already stretched by shrinking revenues, to practice frugality amidst the current pandemic-fuelled economic crisis.
However, KDM spokesperson Sipho Mkhize said the purchase would save the municipality about R2.4 million a year in rental and related costs.
KDM have applied to Nedbank for a R15 million loan to buy two floors of the OK Mall in Chief Albert Luthuli Street in KwaDukuza town centre.
Mkhize said the budget for the new building had been part of the council’s approved budget for the last 2 financial years (2018/19 and 2019/20) and the loan was procured through a competitive process during the 2018/19 financial year.
“As part of the 2020/21 budget, council has taken into account both the pandemic and economic situation to procure the building. The cost benefit favours procuring the building in this juncture,” said Mkhize.
He said staff were working in the rental offices in KwaDukuza’s CBD.
The new building would also accommodate staff working in cramped conditions in the main office building.
“The Covid-19 pandemic has also put the spotlight on the working environment of our staff, which further necessitates the acquisition of additional space,” he said.
In response to queries from Ballito’s Riaan Verster representing the Concerned Citizens Civic Group, KDM municipal manager, Nhlanhla Mdakane said the municipality currently leases premises for the Corporate Services Office of the Municipal Manager, Finance and Economic Development and Planning Units and that the purchase was in line with government policy.
He added that in KwaDukuza CBD new offices were planned for Home Affairs, KZN Department of Education and Public Works.
Questioned on the use of existing resources, Mdakane said the municipal building in Ballito was fully occupied.
He denied allegations the building was abandoned or vacant and said staff were rotating due to the Covid-19 pandemic.
“The office building is required to ensure that the municipality continues to provide services to the northern community of KwaDukuza, where there are limited offices. We are renting premises and it is envisaged that the cessation of this rental will fund the ongoing loan servicing costs. Therefore there will be no burden to the public while allowing us to provide critical services in a sustainable manner,” said Mdakane.
The administration of the municipality is currently run from a number of buildings in KwaDukuza.
Moosa Motala of the IFP, who objected to buying extra office space, questioned the merit of council spending additional funds, stressing the need for financial austerity.
“Bearing in mind the current Covid-19 pandemic, it is inappropriate to rush into buying any property at this time. Our priorities as council should focus on addressing the needs and concerns of our ratepayers and residents, all of whom have been affected by the pandemic.”
The municipality has been leasing the OK Mall property for many years now, and leasing it for an additional 6 months will not make any difference.
Rushing into any property buying deal at this time is simply not called for.
“The municipal value of the entire property is about R12 million. Spending R10 million plus on a portion (2 stories) makes no economic sense,” said Motala.
Dolphin Coast Residents and Ratepayers Association (Docrra) chairman, Deon Viljoen questioned KDM’s lack of transparency in the purchase and said basic processes appeared to have been flouted.
“The advertisement that was placed in the local newspaper by KDM to get comments from the community stated that further information was available on their website or could be obtained from the Chief Financial Officer (CFO).”
Viljoen said this had not been the case and that numerous requests for information had not been answered.
“This is not acceptable to Doccra and the community and makes a mockery of the requirements of the Municipal Finance Management Act and regulations that stipulates the stakeholders input and feedback is needed.
“We cannot comment on the feasibility or business case for this purchase as KDM has not made the relevant information on this business case available for comment, as they are required to do. There could well be a good case to be made and it could even save ratepayers funds, we just don’t know. On the other hand, it could not,” said Viljoen.
Viljoen said Docrra were considering reporting the oversight lapses and flouting of regulations to the Standing Committee on Public Accounts (SCOPA) and to the offices of the Auditor General.
DA caucus leader Madhun Sing said he could not comment on the purchase as it was an in-committee item that still had to come before council for a final decision.
“All the DA can comment at this stage is that we did not support the progress report on the purchase of the building.”
