Conversations with a City - Abstract of a Libertarian Rant Chris Marshall - Greater Cape Town Civic Alliance
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Conversations with
a City
Abstract of a Libertarian Rant
Chris Marshall
Author: Chris Marshall
Title: CONVERSATIONS WITH A CITY
Subtitle: Abstract of a Libertarian Rant
Creative Commons Attribution 4.0
Publisher: Raging Bull Monographs LLC
Dedicated to my Gem
who has to put up
with this stuff
every day
Contents Synopsis ......................................................................4 Glossary ......................................................................6 Foreword .....................................................................6 Cash Leak ...................................................................9 Carhole Cover ...........................................................10 Zombie Planning .......................................................13 Access to Obfuscation ...............................................16 Safety Last ................................................................18 Power and Money ......................................................19 Rating Property .........................................................20 City in Crisis .............................................................22 The Fairest Cape? .....................................................25 Analysis ....................................................................27 Manifesto ..................................................................29 Abuse of Power .........................................................45 Epilogue ....................................................................46 Appendices ................................................................47
Synopsis
Twenty questions, a guessing game in which one player
thinks of something and informs his opponents whether it
is mineral, vegetable, animal or social. The others in turn
ask questions designed to limit the field of inquiry and
close in upon the answer.
Mineral: which is subject to erosion by wind, water, or
other natural agents and turns to dust;
Vegetable: which host parasites that consume and harm
them until their death;
Animal: in which cancer is an uncontrolled growth of
abnormal cells that can kill its host;
Social: in which a virus can spread and be lethal to much
of the population that it infects.
I assert that Cape Town‘s obscure bureaucracy, which has
tripled in cost in the past decade, is comparable to such a
virus. The massive increase in its revenues has not been
invested in capital projects to improve the lives of its
citizens but appears to have been spent on salaries and
benefits for employees and favoured contractors. We now
live with congested roadways, inadequate housing, raw
sewage flowing into the sea, failed desalination projects,
destroyed wetlands... The core competence of the City is
4
to devise new ways to tax its most productive citizens and
to install meters to clock up its revenues.
But the most alarming number is the huge proportion of
Cape Town‘s gross domestic product (GDP) that is
consumed by its municipality. It exceeds that of Ho Chi
Minh City which is rebuilding after decades of war; double
that of New York which provides a much wider range of
services; and many more times that of London which
maintains an infrastructure much older than Cape Town‘s!
I find these discrepancies hard to believe, but the City
refuses to disclose details of the source and application of
its funds, so we have no option but to accept them as true.
And, if true, the administration of the City of Cape Town is
amongst the most expensive on Earth.
Purpose of this Rant
This is based on a collection of letters and emails that I
have exchanged in recent years with officials of the City of
Cape Town and others. It was prompted by the lock down
during the months of March, April and May 2020 due to
the COVID-19 pandemic. Like many others I was left with
too much time on my hands and too little certainty of the
future. So I resorted to collecting and extending some
thoughts that I have had in recent years. I hope it provides
the reader with some entertainment if not illumination.
5
Glossary
CCT representative of the City of Cape Town
CJM the author
DPT developer and its professional team
GEM the author‘s wife
GSB Cape Town‘s Graduate School of Business
RRR representative of residents and ratepayers
symbol representing the lost opportunity cost of a
simple housing unit – a green one of course!
Foreword
In the nearly hysterical early days of the pandemic I
searched the internet for information and resources that
my wife and I might need during the pending lock down.
We had been repeatedly warned that those in our age
group were at risk and that we should take particular
precautions. Useful information was eventually provided
by the City manager‘s office to which my response was:
“Thank you for your email that contains useful information
that we hope we will not require.
My wife and I have worked diligently to invest in and bring
tourism business to Cape Town. For twenty five years we
have paid ever increasing rates and tariffs while being
6
subjected to increasingly incompetent and corrupt
practices – an assertion that I am able and willing to
support. In recent years we have had to subsidise our
payroll from our savings as the City devours an ever larger
share of our revenues. Now these revenues have
evaporated, for who knows how long, which fact is
dismissed by the City as irrelevant.
I watched Andrew Cuomo, govenor of New York, on TV
yesterday. He quoted his deceased father as follows:
It expresses my sentiments precisely. Yet whenever we
have requested anything from the City it has disappeared
into a black hole of bureaucracy, except of course when it
7
threatens its income, when its response is immediate and
unyielding.
If there was ever a time for us to pull together it is now –
but we feel utterly alone in facing the challenge. We have
decided to use more of our savings to support our
employees through these difficult times as we have no
confidence that government at any level will assist them. A
direct consequence is that we have lost the desire and the
capacity to invest in and promote the city that we love.
Instead we will focus on surviving, not only COVID-19, but
the far more long lasting and lethal actions of its
government and bureaucracy.
I trust that you will remain well.“
You may ask if this apparently negative message is
appropriate in the midst of a global crisis. These pages
provide some background information and opinion that
might help to answer that question, along with additional
reading:
John Steinbeck, The Grapes of Wrath, 1939
Friedrich Hayek, The Road to Serfdom, 1944
Thomas Piketty, Capital in the Twenty-First Century, 2013
8
Cash Leak
I suppose my disillusionment with the City began some
years ago when we had a water leak under our driveway
which took a couple of years to find and fix. The cause of
the leak remains unknown but was probably due to heavy
construction traffic using our driveway as a turning circle.
The plumber advised that we could request a rebate from
the City on the excess water consumption caused by the
leak. An email conversation with the City ensued.
The rebate eventually allowed by the City was a fraction of
the excess amount billed, in spite of the claim for which
detailed evidence was provided, which signalled the unfair
and arbitrary approach that the City has to its citizens. In
addition to the very expensive leak detection which used
gas injection of radioactive isotopes, we also had to
replace the brick paving in our driveway.
We estimate that these costs and the tariff on the excess
water supplied but not consumed could otherwise have
paid for three homes for low income families.
9
Carhole Cover
Somewhat later an eager young man drove onto the
pavement outside our house in a spanking new Toyota
Hilux double cab. He cheerfully advised me that he had
been contracted by the City to replace our water meter.
This was puzzling as the water meter had performed
perfectly for the previous twenty years. However, I gave
him the go ahead with a request that he minimise
obstruction of our external parking bays.
Not only was the water meter replaced but its manhole
was rebuilt to a larger size to also accommodate a non-
return valve. The original cast iron manhole cover was
replaced with two covers made of some polymer and fibre
composite. I was told that this was because cast iron
covers were the target of thieves who sold them to scrap
dealers. The new manhole was taped off for a couple of
days, presumably to allow cement to cure.
Within hours of the tape being removed the covers
collapsed under the weight of a vehicle which fortunately
was driving very slowly. Otherwise its suspension would
have been severly damaged. The collapse also resulted in
our external parking being rendered unusable.
We contacted the City‘s Water and Sanitation department
to have it repaired. The contractor arrived a couple of days
10later and replaced the manhole covers and frames. I
pointed out to him that there was a design flaw in that the
frames were not supported by the brick lining of the
manhole but this advice was ignored. Sure enough within
another day the covers had collapsed again. This process
was repeated until the fibre covers were replaced by cast
iron covers typically used in fuel stations. Soon thereafter
a smart young City employee arrived in his new Audi to
photograph the manhole, I thought.
11But when a notice to disconnect was hand delivered to our
letterbox the very next day I realised he was only there to
read the meter!
It is my opinion that it was never necessary to replace the
water meter or to install a non-return valve as we had no
borehole or rainwater collection device that could feed
back into the mains. The most likely motivation is that it
enabled some tenderpreneurs to make a bit (or a lot) out
of their supply and installation.
We award this incident one home for a low income family
but, judging by the number of broken manhole covers we
see across Cape Town, we should be counting them in the
thousands.
12Zombie Planning
Early in 2017 we were made aware of the prospective sale
and development of the vacant portion of a neighbouring
erf. We had expected this as we had discussed the
possibility with the professional team of the owner of the
erf. However we soon realised from images published on
an internet property marketing site that the proposed
development did not conform in any way with what had
been discussed. Indeed it appeared to flout even the
newly relaxed development constraints of the City.
My wife, who is an architect, and I went to the City
planning office to view the proposal. We were denied
access to its land use records and the plans could be
viewed only on the small low resolution monitor of a
personal computer. We were not allowed hard copy
printouts of the plans as the City claimed this would violate
the copyrights of the developer.
We used the Promotion of Access to Information Act
(PAIA) to request this information from the City, which was
subject to the permission of the developer, who refused it.
This set off the alarm bells as the only reason to refuse
such access to affected persons is that they will be
negatively affected.
13Nevertheless we objected to the proposed development
on the basis of the limited information that we had. The
plans were then withdrawn and resubmitted with
amendments to enable them to comply with by-laws and
building regulations. The developer was honest enough to
tell us that he did not intend to build according to the
submitted plans but to use the marketing plans instead.
The process continued for a few months with us having
access neither to the submitted plans nor the marketing
plans. We considered legal action against the City and
were advised that we had a strong case. But the City
retains a purposefully expensive phalanx of advocates,
attorneys and paralegals, paid for by ratepayers, to fight
actions brought by ratepayers.
We decided to abandon the City planning process and to
negotiate directly with the developer. The result is an
acceptable compromise reached without any help from the
City‘s bureaucrats. In conversation, the developer opined
that it is impossible to get a return on investment without
bending the rules because of the financial demands of the
City. In particular, the true size or bulk factor of a building
is understated, not only to bypass building regulations and
by-laws, but also to reduce its rateable value, which is
largely determined by dimensions in the submitted plans,
not those as constructed.
14This unfairly penalises honest ratepayers who end up
paying rates based on increased rateable values and
decreased utility values. We eschew such behaviour and
have decided no longer to invest in Cape Town property.
This is particularly unfortunate now as we are, by nature,
contrarian investors who would otherwise look for
opportunity in uncertain times.
The City approved the plans late in 2017, work started on
site early in 2018 and was completed late in 2019. We let
the reader guess which set of plans was used in its
construction and if the building, as constructed, even
conforms to those plans! The cost to us of legal,
architectural, town planning and other advice and services
would pay for at least five homes for low income families.
15Access to Obfuscation Our experience of the planning process, described above, was abysmal. I put several of what I considered to be relevant questions to the City via a formal PAIA application. This was ignored completely for several months and it was only when we considered legal action against the City that it responded. The response answered none of the questions raised, instead asked: What documents do you want? While I am aware that this is the minimum to which I am legally entitled it begs a far more important question: Why not respond to a citizen who goes to the trouble of requesting clarification of policies and processes that impact him and his peers? Clearly the City had no interest in doing any such thing, probably because it does not want any light thrown on its obscure internal processes. I had previously offered to fund a study by an MBA student at the University of Cape Town‘s Graduate School of Business (GSB) to assess the impact of changes to City policies in recent years. I was particularly concerned about how secrecy might enable corruption and cronyism. To my surprise this offer was not taken up. But then I remembered that the granddaddy of business schools, Harvard, has for generations been spewing out the denizens of Bain, KPMG, McKinsey and Wall Street.
Perhaps the GSB has the mission to develop our own home brew of crooked consultants and crony capitalists! I gave up the idea of getting information but think my efforts are worth two homes for low income families.
Safety Last
The lawless culture under which developers have been
operating in Cape Town in recent years is clear to anyone
who observes safety and housekeeping on many building
sites. I do not enjoy playing policeman but I am prepared
to be abused by the rough diamonds of our construction
industry if I think that residents, visitors or workers are at
risk. Readers may consider that I am just a busybody with
nothing better to do: but they might think differently if it is
their children and grandchildren who are forced into high
speed traffic because of the negligence of some lazy or
careless slob.
The examples I quote are on busy roads which are, or
should be, policed by the City‘s traffic department. Building
sites should also be monitored by its building inspectorate,
but there has been little recent evidence that building
inspectors even exist. Perhaps this is one of those salary
scams where phantom employees are on the payroll but
not in the workforce. But it is less funny when you are
paying hundreds of thousands of rand in rates and tariffs
for these so called services. The cost is minor until an
accident, which can be much more than a low cost home.
18Power and Money
Owners of solar photovoltaic (PV) and other forms of small
scale electricity generation (SSEG) are required to register
their installations for a number of reasons. Ostensibly the
safety of municipal electrical workers is the primary
concern which might be credible if the City gave a damn
for the safety of its citizens in other arenas. The previous
chapter supports this assertion. The truth is that the City
regards the supply of electricity as a cash cow with which
to prop up its budget. Solar PV is therefore seen as a
threat, not an opportunity, and does not receive the
support that it should.
The giant state owned electrical utility, Eskom, has been
heavily and rightly criticized by the Democratic Alliance
and others for decades. What was a world class entity that
produced some of the cheapest energy in the world is now
a basket case that threatens to bankrupt the country. But
what is less well known is that the City takes the lion‘s
share of the tariffs billed to those users that actually pay
for electricity.
I assess the excess cost of electricity to our business to be
enough for two homes for low income families every year.
19Rating Property
The valuation of property is controversial and has been the
subject of claims that the well connected manipulate the
system to reduce their rates while the rest of us have to
pay a greater share. Property values are established by a
supposedly arms length algorithm applied to a dataset of
local property sales. I have described how the flawed
planning process and the lack of an effective building
inspectorate has led developers to pay inflated prices for
land and to understate the true size of their buildings. This
artificially increases the rateable value of other properties
that have been built to correct standards and properly
approved plans.
I understand that the algorithm uses multiple regression
analysis which is a mathematical technique to predict an
unknown value from the known value of two or more
variables. But the City has no way of knowing some of the
variables it uses and cannot rely on others for the reasons
I have outlined above. Furthermore the datasets used to
determine regression coefficients may be small and
therefore subject to significant error.
Our experience is that there is little relationship between
the value that the City puts on a property and its ability to
generate income. This is clearly unsustainable as, even if
rates are just used as a wealth transfer mechanism, loss
20making properties will eventually be sold, leased,
demolished or otherwise fall out of productive use.
To test the reasonableness of the City valuation process I
compared the changes in valuation between 2015 and
2018 of six properties in Camps Bay that share common
boundaries. Maybe a coincidence but the only property
whose valuation declined is owned by a developer. The
remainder are deemed to have escalated in value by
between +6% and +60% in a mere three years. How
reasonable is that!
This exercise was also futile as the City inexplicably does
not consider such comparisons. The City certainly has an
unenviable task to balance its financial books but to apply
a patently flawed process to a brutally unfair system is not
the way to do it. Especially when the real problem is the
City‘s narrow ratepayer base, overblown salary bill, and
purchase of luxury cars for meter readers. Unstable
valuations and rates also give us another reason why not
to invest in Cape Town property. And, because we cannot
control rates in any way, they may lead us to close our
small tourism business. I repeat what I wrote in an email
relating to electricity tariffs: “This is a zero sum game as
every cent sucked into our bureaucracies is lost to those
who are creating the wealth on which they depend.“
21City in Crisis
The country wide lock down imposed to try to slow the
spread of the COVID-19 pandemic brought into focus how
vulnerable South Africa has become. Cape Town is
particularly vulnerable to the collapse of tourism which has
powered much of its growth in recent years. Our central
government has shown strong and hopefully correct
leadership but we have a long and rocky road to travel.
The City has offered some temporary relief to its
ratepayers in the form of a limited deferment of payment of
rates. It has made no effort to reduce its expenditure and
its proposed budget assumes that ratepayers will be able
to absorb increases above the inflation rate. It repeatedly
proclaims that it provides services for free to 40% of the
population, which cost is less than 5% of its operating
expenditure.
The net effect is that even fewer ratepayers will be
expected to pay an ever greater share of these costs until
we all descend into a death spiral of taxation fatigue and
bankruptcy. So how about a substantial cut to its
personnel costs – employees plus contracted services -
which would have a beneficial impact on its finances
several times as great as increased rates ever will?
22Then Now
The real story is that the vast amount of burgeoning City
revenues have gone to operating costs to the detriment of
capital expenditure. This is manifested in its crumbling
infrastructure and its abject failure to improve the living
conditions of its less fortunate citizens. Its dumb reliance
on a shrinking pool of ratepayers to fund this excess
merely compounds its folly.
An analysis of the figures in the appendices shows that the
City has been living way above our means, which are now
further reduced by the impact of COVID-19. Yet it puts
forward budgetary proposals which do not address these
issues – indeed the only costs that the City has cut are
23travel expenses – which had been mandated by others
anyway!
We are in the early days of the
crisis and I would like to see
how the City will share the
consequences with its citizens:
the mutuality referred to in Mario Cuomo‘s quote above.
Otherwise we may also start to believe the rumours that
the City has been hijacked by a greedy, self serving, elite.
24The Fairest Cape?
Long smoldering discontent with the City has now become
a firestorm of anger against an administration that is
perceived to be incompetent, self serving, greedy and
utterly out of touch with reality. Most wealthy and middle
class citizens have empathy and compassion for those
less fortunate but are cynical about the ability, even the
desire, of the City’s bureaucracy to materially improve
conditions. Perhaps the best way to illustrate this is to
quote a small selection of their comments:
Clearly, the disgraceful and ill-considered salary increases
will be foremost in out objection.
The stranglehold municipal servants have on the wallets
of property owners in Cape Town.
Cape Town has become a monopoly in which its
customers are at its mercy.
It is an otherwise non-sustainable budget, one cannot but
consider the very trite cliché of moving of the deckchairs
on the Titanic.
The City’s cavalier attitude toward litigation against its own
ratepayers.
Budget assumptions tell us that the City is in denial about
the impact of Covid-19.
25The City takes refuge in all manner of assumptions,
excuses and explanations.
We want the City to treat us as valued customers and its
primary source of revenue.
It is very wrong to implement any increases in
remuneration whatsoever at this time.
Those in our City that have an insatiable appetite for other
peoples' money.
I am personally incensed about the City's tone-deafness
or perhaps utter blindness.
We are desperate to try to save what is still to be saved in
our neighborhood.
I have reached a point where I am so disgusted by the
reduction in service I am getting from the city, against the
background of the salaries which they are earning, that I
have decided to stop paying all rates and tax.
What you are writing about is a total lack of management
from the top to the bottom.
Sir Francis Drake, celebrated English navigator, claimed:
”This Cape is the stateliest thing, and the fairest cape we
saw in the whole circumference of the earth”. In another
sense it has the potential to be, not only the most beautiful
in the world, but also the fairest. So let us ask how.
26Analysis
This document explores deteriorating relationships among
the politicians, administrators and many citizens of the City
of Cape Town. Primary causes of this trend are the refusal
by the City to curb its financial appetites and to disclose
certain information to those ratepayers and citizens from
whom it derives its revenues. There is no logical reason
why such information should be withheld and to do so
breeds a sense of distrust between said citizens and City
officials. My opinion is that this trust must be restored if
Cape Town is to succeed. The first step is for the City to
be transparent in its financial affairs so that we can better
understand its priorities, constraints and decisions.
Of particular importance at this time is the revised budget
for 2020/2021 because of the financial hardships being
faced by many ratepayers and other citizens. The tables in
the Appendix summarise the recent financial history and
the amended budget figures of the City for the 2020/2021
year. Of particular interest is the remuneration of the
executive and council which is to be increased by a “cost
of living allowance“ substantially in excess of the inflation
rate.
The large array of little green icons is my attempt to
illustrate the opportunity cost of affordable housing lost
every year to a management that, judging by the opinions
27detailed above, is not overly competent. This is a view
shared by many others, including senior legal counsel,
who are prepared to discuss, in public, rates boycotts and
outright tax revolt.
What is clear, however, is that this trajectory of financial
excess is not sustainable. If continued for another decade
we can expect the City to again have tripled in cost while
Cape Town‘s GDP is likely to have grown, at best, by no
more than a modest 25% to 30%. Clearly it is not realistic
to expect its narrow tax base to tolerate this of a City that
is already amongst the most expensive in the world.
28Manifesto
The title of this section is not a declaration of policy and
aims but is an expression of what is manifestly obvious to
any objective mind. As an engineer I have spent my entire
adult life attempting to solve problems and do not intend to
abandon that practice now. The opinions expressed here
are intended to stimulate constructive debate and actions
in these difficult times.
While the true reality of our crippled economy is not fully
realized by the City it is recognised by some in central
government: Finance Minister Tito Mboweni said recently
that South Africa should think about moving to a zero-
based budget. A zero-based budget would enable Cape
Town to weigh the wisdom of growing the priviledged state
of a handful of senior executives and their bureaucracies
over addressing the immediate needs of thousands of less
fortunate citizens. In my opinion the City of Cape Town, as
currently structured, cannot continue to be funded by the
relatively small group of citizens from which it derives most
of its revenues.
The ambitions of the City and its senior officials clearly
exceed their ability to execute. This is obvious to the
informed observer and is discussed for each stakeholder
in the following sections:
29Water and Waste Services
Cape Town is the first major city in the world to run out of
water due to neglect and incompetence. Had it not been
for extraordinary efforts by its citizens day zero would have
arrived before life saving rains. And yet the City continues
to prevaricate, blaming central government and other
scapegoats, while neglecting the basics. Investment in
sewage treatment, fixing of leaks, reticulation of grey water
and other interventions lags behind that in many other arid
areas. Pollution of our wetlands and seas has caused
desalination projects to fail and threatens tourism, marine
resources and health.
Liquid waste should be continuously monitored for early
and local warning of the outbreak of disease, much like
earthquakes are monitored elsewhere to warn of tsunamis.
But ever escalating water, sewage and solid waste service
costs, particularly the pernicious fixed charges that do not
depend on consumption, destroy the confidence that
business requires to operate, let alone invest, in the Cape.
The management and technical competence of this
important directorate must improve.
Energy and Climate Change
The City also blames Eskom and central government for
its failure to secure a reliable and cost effective supply of
30electrical energy. The truth is that it has conflicting
objectives – on one hand to fight climate change by using
renewable resources – on the other hand to derive
revenues from the sale of electricity. The fact is that the
public sector should have no involvement in the process
beyond providing a regulatory framework to encourage
and facilitate rapid migration to sources of renewable
energy.
Current legislation allows net importers of energy to
supplement demand so there is ample opportunity for local
small scale electricity generation. For example, microgrid
systems using wind and photovoltaic technologies have
been proven in South Africa and elsewhere. They are
ideally suited to dense urban areas like those in Cape
Town. Mountains in the region also provide potential to
install additional pumped-storage hydropower, which is an
efficient and reliable way to transfer supply of daytime
energy to night time demand for energy. This also provides
opportunity to increase catchments of existing reservoirs.
But it should also be noted that ruinous electricity tariffs
discourage investment in the city.
The skills required to operate and maintain an electrical
distribution network should enable the directorate to install
broadband mobile internet services for its citizens‘ benefit.
Perhaps the City should expand its mandate to include this
31essential technology, which fuels information, education,
entertainment, remote work and meetings, and monetary
transactions, at low cost. The City might also use it for
surveillance and monitoring of properties and other assets,
and to implement digital ledgers to automatically record
and bill service usage. If linked to other infrastructure it
might help reduce theft and vandalism as citizens will react
immediately and robustly to anyone that disrupts this
essential service. And aspirations to a fourth industrial
revolution are pie in the sky without such infrastructure.
Members of the executive should then have the courage to
publish their cell phone numbers to enable citizens to
communicate with them directly via VOIP and internet text
services.
Safety and Security
The City recognises the critical role of safety and security
in preserving and enhancing investment and tourism in the
city and its environs. Any real or perceived danger is
amplified by the media to the cost of the Cape economy.
The department is responsible for emergency services,
disaster risk management, traffic services, fire and rescue
services, law enforcement services, the metro police
department, events and film, a safety and security
investigations unit and neighbourhood policing support.
32This is a very important and, since SAPS has gone AWOL,
under resourced directorate which deserves our support.
Spatial Planning and Environment
The municipal spatial development framework shapes land
use and development in Cape Town in the context of rapid
urbanization, climate change and resource scarcity, shifts
in global economic power, demographic and social
changes and technological breakthroughs. To succeed the
City should publish details of proposed policies and
development projects to affected citizens. It must strictly
apply by-laws, title deed restrictions and other constraints
in evaluating plans, inspect building works at all phases of
a project, and stop work if there is any deviation from the
approved plans or relevant national and municipal
legislation. Failing this, businesses and investors, apart
from well connected developers, will reject the uncertainty
of its arbitrary planning decisions and lax monitoring of
building work.
Human Settlements
This appears to be a duplication of the responsibilities of
central government, which has the mission to facilitate the
creation of sustainable human settlements and improved
quality of household life in South Africa. While an excellent
opportunity to mint a few more millionaires at ratepayers‘
33expense, the City‘s focus should be on the provision of
land and basic infrastructure, not on building houses.
Experience elsewhere in Africa has shown that housing is
best left to the private sector which can employ innovative
financial and construction techniques. Public-private
partnerships can be highly effective, if managed correctly,
but intervention in the process by government, at any
level, promotes a culture of cronyism, patronage and
dependency which is prone to corruption.
The directorate should be closed and its responsibilites
delegated to those that provide the basic services of
roads, water, sanitation, electricity and internet bandwidth.
Corporate Services
This directorate appears to be a bureaucracy designed to
invent, equip and staff other bureaucracies, so must be
reformed. Modern technology enables automation of most
accounting and many routine administrative tasks.
Broadband networks allow remote working and virtual
meetings which eliminate travel, vehicle, accommodation,
catering and other costs. Rationalisation and reduction of
administrative staff to the levels found in well managed
corporations is feasible by using such technologies.
Legal actions by ratepayers against the City should be
defended by the official(s) responsible at their own cost.
34Should legal aid be required by defendants then an equal
facility should be extended to the plaintiffs. The legal
services function can then be greatly trimmed to focus on
its statutory obligations. Perhaps it should also be taught
the meanings of the words civil and servant.
Councillors should live and work in the wards that they
represent and their count should not exceed the number of
wards. Department managers should work where their
employees work to free up municipal space for more
productive use. For example, the lower levels of the Civic
Centre, being ideally placed between rail and bus transit
hubs, might be used to incubate small enterprises. Other
vacant offices, meeting rooms, parking etc can then be let
to the general public at market rates. Should a municipal
department or official wish to use the facilities it may do so
on the same basis as any other organization or person.
Economic Opportunities and Asset Management
It is difficult to see how this directorate can add any value
to the citizens of Cape Town. Anyone looking for economic
opportunity has the internet and other channels by which
to obtain objective information.
Invest Cape Town is an initiative to encourage investment
which fails on almost every level. Not only does it add to
the cost of doing business in the city, but it fails to listen to,
let alone encourage, those who have already invested.
35The City has a business friendly rhetoric, but its policies,
described herein, are clearly anti-business. Putting lipstick
on the pig in this way is yet another example of Orwell‘s
doublethink that characterises the City‘s propaganda. The
department should be renamed Divest Cape Town, or
better still, be shut down to leave investment advice to
those who understand business and capital.
Cape Town Tourism is another City function that adds cost
without adding much value to those that actually promote
and provide tourism products and services. It has little
understanding of the critical part played by Tripadvisor,
booking.com. Expedia, Trivago and other online resources
that are actually used by potential visitors. Each of these
requires fine grained data that is best provided by tourism
suppliers themselves. Google search provides literally
millions of other pages of information about the Cape so
the City does not need to add to the cacophony at our
expense.
Management of assets requires accounting and audit to
record their acquisition, disposal and value, maintenance
to preserve this value, and security to ensure their
continued availability and existence. These functions are
better done by other departments and should be
delegated accordingly. The directorate should be closed
and its functions taken over by the private sector and other
departments.
36Urban Management
“Colleagues we are now in the 2nd quarter of the financial
year and the time to play and to blame is gone. As a team
we need to work together and pull towards the same
direction. Whilst there are many challenges and areas of
development, I wish to request us to focus on the
positives.“ Fine words from the chairperson‘s opening
address at a recent portfolio committee meeting, with over
eighty attendees, of a directorate which claims to be one
of the most powerful in the City of Cape Town.
The minutes throw little light on the mandate, structure or
even the meaning of urban management. However, they
do refer to the handover of title deeds, delivery of baskets
of services, multi-year funding programs, medical aid
remuneration for councillors, and other such munificence.
Clearly the directorate has power to peddle patronage, but
it appears to have few objective measures of its real value.
Indeed its functions appear to duplicate those of human
settlements, safety and security, spatial planning and
environment, community service and health, and of city
improvement districts and other services better provided
by private sector and non-governmental entities. Perhaps
it should be disbanded and merged with them to release
redundant facilities and its substantial staff complement.
37Community Services and Health
The functions of this department appear to duplicate those
provided by central and provincial government. Since the
size of Cape Town is 70% of that of the Western Cape it
seems illogical to have departments at both the municipal
and provincial levels. The experience of the COVID-19
pandemic should clarify the need and desirability of such
redundancy. The cost of the department‘s bureaucracy is
equivalent to that of hundreds of front line workers so is
difficult to justify. A report by independent medical and
social welfare experts might usefully probe this opinion.
Transport
Responsible for developing an integrated public transport
network to transform the current system that is efficient,
effective, affordable, safe, reliable and sustainable makes
this an essential department. It maintains and manages
the roads and stormwater infrastructure, MyCiTi bus
service, public transport facilities, parking, destination
boards, and traffic calming and transport enforcement in
partnership with the safety and security team. Trimming
the City‘s motor pool to essential vehicles might increase
the utilisation of its public transit services by municipal
employees while reducing capital and depreciation costs
and congestion on the roads. We must otherwise support
this important and relatively effective directorate.
38Ratepayers and Residents
The Gini coefficient is a statistical measure to represent
income or wealth distribution of a population, which is the
most commonly used index of inequality. It was published
in 1912 by the Italian statistician and sociologist Corrado
Gini. The coefficient ranges from 0 to 1, 0 representing
perfect equality and 1 representing perfect inequality. An
estimated 9% of citizens pay 91% of the City’s revenues,
which inequality substantially exceeds their inequality of
income, as measured by the Gini coefficients of 0.88 and
0.62 respectively. The City is unable to provide information
by which these figures might be verified as it appears that
it does measure the financial inequality of its citizens’.
What is clear, however, is that a small minority is expected
to fund most of the financial needs of the City. This might
be acceptable if the funds were used to improve the lives
of its citizens, but they are abused to enrich its elite
government and bureaucracy. The revenue base of the
City must be expanded, by tariffs based on service usage,
by reducing so called free services, by disconnecting all
delinquent accounts, and by eliminating concessions to
municipal employees and other favoured entities.
A most contentious issue facing home owners is that of
municipal valuations, which are considered by many to be
overstated. The City claims that it uses an arms length
39valuation process that is randomly verified by an external
auditor, but few others believe this assertion. The valuation
of property must be in the hands of a completely
independent and qualified entity, approved by ratepayers,
having full access to Deeds Office and City records. Each
valuation should include the parameters and coefficients
used in its calculation to enable home owners and the City
to check its accuracy. Property owners and the City should
each have an equal right to challenge the valuation and
the onus of proof should lie with the challenger. Valuations
within each suburb should be compared with Deeds Office
transfers for the same suburb and period to demonstrate
their statistical validity.
The ratepayers and residents that fund the City are the
equivalent of the shareholders in a company and should
have similar rights. It is clear that the council, which
should act like the board of directors of a company, not
only fails to represent these citizens to the City but actually
defends the City from criticism and accountability. While
not surprising given its unlimited power to award itself the
riches of office, it is not in the best interest of citizens.
Finally, given the right of municipal trade unions to protect
their interests by withholding their labour, ratepayers and
residents should but do not have an equivalent right to
protect their interests by withholding payments to the City.
40Executive Management
To deny that the City of Cape Town has a major funding
crisis is to live in a Walter Mitty world of fantasy, denial and
idiocy. An executive that does not recognize this fact
should be removed from office immediately. Those that
remain can address the significant task of restructuring the
City to operate within the means of its taxpaying citizens.
This requires that its mandate is revised to focus only on
what it is able to do effectively and more efficiently than
can be done by its citizens. A wise manager knows that it
is better to do less, well, than to do more, poorly. Many
organizations have failed by not understanding this truth.
Perhaps it is time for the City to be modernized and to
adopt proven practices of the private sector. Its executive
and management deem themselves worth as much as
those of the most successful and profitable of private and
public enterprises. They must then accept that they will be
held to the same levels of performance and accountability.
Key performance indices and ratios should be audited and
reported for each financial quarter, by department and for
the City as a whole. They should include comparisons with
successful cities from around the world. The equivalent of
an annual general meeting should give tax paying citizens
the opportunity to review this performance, to vote on
41remuneration and bonuses, and to remove delinquent
executives.
Performance Measurement
The private sector, which operates in a real world of open
markets and sometimes fierce competition, knows of two
measures that actually matter:
• How satisfied are customers?
• How satisfied are shareholders?
Customers have the opportunity to express their opinion
through their purchasing decisions and shareholders have
the opportunity to express theirs through their investment
decisions.
Those citizens that pay for the services provided by the
City are, in effect, its customers. Those citizens that pay
property rates to the City are, in effect, its shareholders.
But these two essential participants are not included in:
• Setting the purpose, goals and responsibilities of
City officials, employees and contractors;
• Evaluating how well they have performed in
executing these responsibilities.
The City has a rigid monopoly on the supply of municipal
services so citizens cannot express their opinions through
purchasing and investment decisions. Furthermore, in my
twenty five years as a ratepayer and services consumer, I
42have never been asked to define the role or rate the
performance of a City directorate, department, executive,
councillor, manager, employee or contractor. Why not?
Political Leadership
The South African Local Govenment Association (SALGA),
which is an association of all 257 South African local
governments, comprises a national association with one
national office and nine provincial offices. Like a naughty
kid caught with its hand in the cookie jar who claims "the
devil made me do it", our City protests that "it is forced to
accept what SALGA dictates". Remuneration and other
benefits of municipal councillors, officers and employees
are set by SALGA, but those who must pay have no
representation in this process. Clearly this is unfair, and
stakeholders such as ratepayers, business associations
and other citizen groups should be included. Indeed,
SALGA itself recognises that managing different
stakeholders has become a core element of business
strategies in many successful organisations.
The leaders of Cape Town, particularly those in political
parties that command significant support, must stiffen their
spines and find the will to recognize reality and radically
change the priorities, capabilities and ambitions of the City.
They must choose between its reform, transparency and
accountability, or face the real threat of rates boycotts and
43even full blown tax revolt. Whether this will be by choice or
forced by circumstances is moot, but it cannot be ignored
in the world in which citizens now live. Failing to address
this truth will, in time, kill Cape Town‘s entrepreneurial
economy with far reaching consequences for all.
44Abuse of Power
Changing power relations have been one of the central
themes of human history. How much is about monarchs
and peasants, owners and slaves, empires and colonies,
one race dominating another, or men dominating women?
Throughout history mankind has been plagued by bullies
who believe that they know better for others than they, the
others, know themselves. Often they begin with the intent
to better the lives of these others but eventually, almost
always, abuse this power to benefit themselves through:
• Unconstrained ability to expand mandates and resources
• Unbridled ability to award themselves the riches of office
• Absent or opaque definition and monitoring of their duties
• Lack of credible measures of performance of these duties
• Asymmetric power in legal, financial and other relations
• Use of obfuscation and propaganda to influence opinion
• Opaque appointment of officials, staff and suppliers
• Secretive exchange of monetary and other favours
The present government and administration of Cape Town
exhibit these traits so it is not surprising that current and
potential investors are turning their backs on the city. Who
in their right mind will invest when rates, tariffs, salaries,
benefits and staff complements can be increased by a
handful of individuals, at their will, without real constraint?
45Epilogue
So what is the proper role of the City of Cape Town:
to tend to water, power and other critical infrastructure?
or to dabble in social engineering and paternalism?
Have Day Zero and District Six not taught it to choose the
former and to reject the latter?
Its politicians and bureaucrats must decide.
Having little interest in how the wealth they tax is created,
they prefer to devise ways to share it among themselves.
Is this a viable formula for the City‘s success?
Time will tell.
46Appendices The first bar chart shows the amounts billed for certain property by the City of Cape Town over a period of twenty years. Cost increases were in line with inflation until the Democratic Alliance took over in 2006, when escalation of costs accelerated. The step jump in 2013 was due to these increases and the additional cost of a water leak which took several years to identify, locate and rectify. The reduction in costs from 2017 was due to substantial investments in solar PV systems to reduce electricity imports. Returns on these investments are being nullified by rapid escalation of rates and services, some of which do not depend on consumption. The graph illustrates the risk to investors posed by the unconstrained ability of the City to increase rates and service charges in order to balance its burgeoning budget. As important is the fact that, while the costs of the City have trebled, the amounts billed for this property have more than quadrupled, and without the PV investment would have grown five fold, in the past decade. This implies that the relative financial burden imposed on ratepaying citizens is increading. Sadly this gives the lie to the City‘s stated objectives and priorities in its draft Inclusive Economic Growth Strategy. It fails to recognize, let alone address, its role in the destruction of business confidence. Its contribution to the cost of doing business in Cape Town is reflected in rapidly declining high end property sales and prices. Instead it proposes to further grow a bureaucracy that adds little but cost and uncertainty to the lives of its citizens. We can expect another deluge of internal management frameworks, feasibility studies and analyses, strategy, scenario and sector plans, but little real action to grow the economy. The other diagrams are for the City as a whole and are created from data provided by the South African National Treasury listed in the last appendix or derived from information provided by the City of Cape Town prepared by Mike Heyns. Certain assumptions have been made in categorising the information. Personnel costs comprise direct and social employee costs and contracted services which mostly comprise labour rather than capital or material costs. Impaired debt costs do not include collection costs but only the revenues written off because of failure to collect. The true cost of this failure and the granting of “free“ services to 40% of the citizens of Cape Town hide the more important truth that these costs are in fact covered by those citizens that do pay their bills. Free services are not free, they are merely an additional tax on honest and productive members of the community. The bar chart comparing the percentage of municipal expenditure to gross domestic product of a number of cities around the world is based on several internet sources for the years 2014 to 2020. It appears that Cape Town spends proportionately twice as much as New York given that the New York budget includes police, hospital, educational and other services not included in the Cape Town budget. The power systems analysis diagram shows the relative complexity of the Eskom and municipal systems and the proportion (relative to costs) of the tariff charged by each to the consumers that actually pay for their electricity (see page 85 above for more detail). The remuneration of senior management and council is listed in the tables below. The array of green icons illustrates the number of affordable houses that this amount of money could build every year.
Revenue Written Off 2019/2020 2020/2021 Directorate Write Off Revenue Percent Write Off Revenue Percent Change Community Services and Health - 824 231 000 0% - 862 976 000 0% - Corporate Services - 66 230 000 0% - 57 780 000 0% - Economic Opportunities & Asset Management 27 955 000 222 435 000 13% 13 455 000 283 469 000 5% 48% Energy and Climate Change 138 851 000 14 197 736 000 1% 303 535 000 13 851 730 000 2% 219% Finance 446 375 000 16 181 927 000 3% 1 023 242 000 16 938 904 000 6% 229% Human Settlements 131 119 000 793 126 000 17% 174 876 000 569 987 000 31% 133% Office of City Manager - 6 000 000 0% 6 000 000 0% 0% Spatial Planning and Environment 29 619 000 146 951 000 20% 32 139 000 186 710 000 17% 109% Transport - 864 452 000 0% - 904 395 000 0% 0% Urban Management 7 182 000 245 228 000 3% 7 759 000 264 033 000 3% 108% Solid Waste Management 180 281 000 1 561 134 000 12% 344 653 000 1 636 567 000 21% 191% Water and Sanitation 703 000 000 4 788 382 000 15% 893 750 000 5 075 780 000 18% 127% Total 1 664 382 000 39 897 832 000 4% 2 793 409 000 39 717 575 000 7% 168% Safety and Security – Fines 852 805 000 1 084 146 000 79% 879 084 000 1 055 541 000 83% 103%
Revenue Written Off 2019/2020 2020/2021 Directorate Write Off Revenue Percent Write Off Revenue Percent Change Community Services and Health - 824 231 000 0% - 862 976 000 0% - Corporate Services - 66 230 000 0% - 57 780 000 0% - Economic Opportunities & Asset Management 27 955 000 222 435 000 13% 13 455 000 283 469 000 5% 48% Energy and Climate Change 138 851 000 14 197 736 000 1% 303 535 000 13 851 730 000 2% 219% Finance 446 375 000 16 181 927 000 3% 1 023 242 000 16 938 904 000 6% 229% Human Settlements 131 119 000 793 126 000 17% 174 876 000 569 987 000 31% 133% Office of City Manager - 6 000 000 0% 6 000 000 0% 0% Spatial Planning and Environment 29 619 000 146 951 000 20% 32 139 000 186 710 000 17% 109% Transport - 864 452 000 0% - 904 395 000 0% 0% Urban Management 7 182 000 245 228 000 3% 7 759 000 264 033 000 3% 108% Solid Waste Management 180 281 000 1 561 134 000 12% 344 653 000 1 636 567 000 21% 191% Water and Sanitation 703 000 000 4 788 382 000 15% 893 750 000 5 075 780 000 18% 127% Total 1 664 382 000 39 897 832 000 4% 2 793 409 000 39 717 575 000 7% 168% Safety and Security – Fines 852 805 000 1 084 146 000 79% 879 084 000 1 055 541 000 83% 103% This table of revenue and write offs per directorate for year ending July 2020 and forecasts for next year is by Peter Stenslunde of the Constantia Ratepayers‘ and Residents‘ Association. Total write offs for the year amount to R2.5b, the big culprits being safety and security (traffic fines not paid) and water and sanitation. At a meeting two years ago the Mayco member for Utilities (Xanthea Lindberg) was asked who owed the money that is being written off by Water and Sanitation and why it was so large (15% of total revenue). She was blissfully unaware of the both the problem and the amount and promised to get back to us but never did. Attempts to get the information through Liz Brunette were unsuccessful. To write off R10b in the past five years is criminal – how many houses could have been built with that? Any business that ran a debt write off ration 15%-75% would not last very long. This probably explains why the City did not respond to the PAIA request of 18 June 2020, which was designed to help analyse the amounts billed and paid for rates and services by the suburbs or wards of Cape Town. Clearly the burden of taxation falls heavily on a small proportion of the citizens, not only because of punitive policies, but also because the City can or will not collect from others. Perhaps this is due to its incompetence, or to the inability or unwillingness of some citizens to pay, or simple political expediency. What is easier than to say: you vote for us, and we will give you free water, electricity and housing? Tax resistance, the practice of refusing to pay taxes that are considered unjust, has existed ever since rulers began imposing them, playing a role in the collapse of the Egyptian, Roman, Spanish, and Aztec empires. The key word here is unjust. Citizens do not object to fair taxation, even if a burden in difficult times, but they reject unfair and unequal treatment. American colonists, frustrated and angry at Britain for imposing “taxation without representation,” dumped tea chests into Boston harbor, which triggered the War of Independence to create the United States of America. Check out en.wikipedia.org/wiki/List_of_historical_acts_of_tax_resistance for more examples.
Cape Town City Remuneration Summary Senior Municipal Officers 2019/2020 2020/2021 Change Current Incumbent Cell Phone Email Address Municipal Manager 3 572 695 3 760 802 5,27% Lungelo Mbandazayo lungelo.mbandazayo@capetown.gov.za Chief Finance Officer 3 116 145 3 279 110 5,23% Kevin Jacoby kevin.jacoby@capetown.gov.za Community Services & Health 3 116 253 3 278 501 5,21% Ernest Sass ernest.sass@capetown.gov.za Corporate Serivces 3 116 253 3 288 175 5,52% Craig Kesson craig.kesson@capetown.gov.za Economic Opportunities & Asset Management 2 257 555 2 941 780 30,31% Kelcy Le-Keur kelcy.le-keur@capetown.gov.za Energy & Climate Control 2 257 555 2 941 863 30,31% Kadri Nassiep kadri.nassiep@capetown.gov.za Human Settlements 2 133 450 2 941 780 37,89% Nolwandle Gqiba nolwandle.gqiba@capetown.gov.za Safety & Security 3 116 253 3 278 620 5,21% Richard Bosman richard.bosman@capetown.gov.za Spatial Planning & Environment 2 133 450 2 939 883 37,80% Osman Asmal osman.asmal@capetown.gov.za Transport 3 116 253 2 787 754 -10,54% Ernest Sass (acting) ernest.sass@capetown.gov.za Urban Management 2 133 459 3 278 620 53,68% Philemon Mashoko philemon.mashoko@capetown.gov.za Water & Waste 3 116 253 2 789 768 -10,48% Michael Webster michael.webster@capetown.gov.za Total Senior Management 33 185 574 37 506 656 13,02% Council Members 2019/2020 2020/2021 Change Current Incumbent Cell Phone Email Address Speaker 1 199 165 1 272 314 6,10% Dirk Smit 083 377 0556 dirk.smit@capetown.gov.za Chief Whip 1 132 104 1 201 163 6,10% Desiree Visagie 082 710 2493 desiree.visagie@capetown.gov.za Executive Mayor 1 474 153 1 564 458 6,13% Dan Plato 021 400 1322 mayor.mayor@capetown.gov.za Deputy Mayor & Finance 1 199 165 1 272 314 6,10% Ian Neilson 083 306 6730 ian.neilson@capetown.gov.za Community Services & Health MMC 1 132 104 1 201 163 6,10% Zahid Badrioodien 072 639 5773 zahid.badrioodien@capetown.gov.za Corporate Serivces MMC 1 132 104 1 201 163 6,10% Sharon Cottle 082 436 3069 sharon.cottle@capetown.gov.za Economic Opportunities & Asset Management MMC 1 132 104 1 201 163 6,10% James Vos 076 277 3351 james.vos@capetown.gov.za Energy & Climate Control MMC 1 132 104 1 201 163 6,10% Phindile Maxiti 083 726 9414 phindile.maxiti@capetown.gov.za Human Settlements MMC 1 132 104 1 201 163 6,10% Malusi Booi 071 728 3512 malusi.booi@capetown.gov.za Safety & Security MMC 1 132 104 1 201 163 6,10% JP Smith 083 675 3780 jean-pierre.smith@capetown.gov.za Spatial Planning & Environment MMC 1 132 104 1 201 163 6,10% Marian Nieuwoudt 084 224 0023 marian.nieuwoudt@capetown.gov.za Transport MMC 1 132 104 1 201 163 6,10% Felicity Purchase 083 629 0829 felicity.purchase@capetown.gov.za Urban Management MMC 1 132 104 1 201 163 6,10% Grant Twigg 072 171 1033 grant.twigg@capetown.gov.za Water & Waste MMC 1 132 104 1 201 163 6,10% Xanthea Limberg 073 271 2054 xanthea.limberg@capetown.gov.za Other Councillors (each) 753 420 794 258 5,42% 217 in 116 wards Total Council 179 817 767 189 675 865 5,48% Total Senior Management & Council 213 003 341 227 182 521 6,66%
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