The battle lines have been drawn in the fight over the future of Hermanus Public Protection (HPP), with several groupings seemingly pulling in different directions as to what the future of the City Improvement District (CID) must be.
This follows an announcement that HPP will begin with a winding down process after it was informed by Coenie Groenewald, municipal manager, in December last year that the municipality can no longer levy the additional rates for HPP for the 2019/2020 municipal financial year, commencing on 1 July 2019. This has come about as a result of changes that have been made to the Property Rates Act, the Special Rating Area By-law and the Special Rating Area Policy.
Last week the Whale Coast Business and Community Forum (WCBCF) and a group called the Eastern Precinct Initiative (EPI) informed HPP chair, Roger Smith of a motion to replace the current board. According to the motion, during January 2019, and flowing from the December AGM of HPP, the media reported the winding-down of the entity, and the transfer of HPP-assets to the Overstrand Municipality (OM) post-30 June 2019.
“At the previous AGM a request for the formation of a committee to participate in the affairs of HPP was ignored and set aside. Subsequently, legal opinions and documents became available to corroborate the media reports.
“As a result, and combined with an unprecedented rise in crime across Ward 3, a few groupings of concerned property and business owners began focused research into the circumstances giving rise to the escalation in crime, and to the status and future of HPP (against the backdrop of media reports about its possible dissolution).”
The motion continues to state that “in the interest of brevity, we (property owners of Ward 3 and representatives of the Eastern Precinct Initiative and the Whale Coast Business and Community Forum) respectfully wish to note that we hold subscription notices for membership of HPP, sufficient in number to carry the required notices, motions and voting to support the actions below.
“We respectfully request that the current HPP board step aside soonest to make room for a new interim board. It may well be expedient for the HPP board, and convivial if agreed to by the directors of HPP, to handle this as an uncontested matter and by way of correspondence as provided for in section 60 of the Companies Act.
“This note also serves the purpose for requesting a meeting with the current HPP directors to put forward notices and to discuss the required formalities for a board replacement.”
According to the memorandum, the approach followed by the WCBCF and EPI was informed by legal counsel that funding of the HPP can continue even if it is not raised by the municipality. Thus, the HPP can continue to operate via private funding options, such as contributions by property owners.
Unity of purpose is needed
“The municipality cannot become the beneficiary of the assets of HPP to the detriment of the community that has paid for and continues to pay for the development of the much-needed services within Ward 3,” states the motion.
In reply Smith said the motion was discussed at the HPP management meeting held on 8 April. “Given that HPP is in the process of winding down operations ahead of closing and that no reasons were put forward for the motion, the HPP Directors were hard pressed to understand the motivation for this action and therefore the directors of HPP have indicated that they will not be resigning.
“I believe the current HPP board has been regularly appointed at a properly constituted AGM, which is consistent with all appointments since inception in 2002. The rate paying residents within the boundaries of the CID have been deemed to be members of HPP by virtue of them paying the HPP levy and exercising their voting rights at the AGM. A motion to remove the Board of HPP, according to our understanding of the process, would require a majority of the CID ratepayer base to achieve this.
“With regard to the termination of the HPP monthly levy it is our understanding that all avenues to continue the funding model for the CID which supports HPP have now been exhausted and the levy will cease at the end of June 2019. The directors arrived at the conclusion that in the absence of the municipality collecting the levy we will be unable to continue operations and will follow the HPP termination process.
“We are legally obliged to follow this closing down process in conjunction with the municipality that will lead to an orderly and procedurally correct shut down of HPP operations. The board is furthermore legally bound to follow the closing down process as published in the Western Cape Provincial Gazette No. 5570 of 25th August 2000. This dictates that ownership of the remaining assets, which primarily consist of the CCTV camera surveillance system, will be transferred to the OM when operations cease.”
Smith said they will be preparing a financial budget and operational plan in conjunction with the municipality, covering the period from July 2019 until final shutdown, which they anticipate will be in line with their current expenditure plan. “It is envisaged that we will continue operations at current levels supporting patrols, litter management and CCTV operations until January 2020.
According to him, the board has decided to continue with the expansion of the current CCTV network. “We intend handing over the most state of the art security system possible to the municipality.”
In his response, Mayor Dudley Coetzee said that the municipality is acting on the legal advice it has received. “What is certain is that we can no longer levy the additional charges as that is prohibited by law. In order for us to reinstate the levies, a properly constituted SRA needs to be formed and that is what we expect the community to do. The charges that are levied for an SRA are not rates but a form of tax and therefore must be included in the municipality’s annual budget. The next budget where this can be accommodated will be the 2020/2021 budget cycle.
“We want to ensure that there is proper public participation as required by law for the establishment of an SRA to deliver security and cleaning services. We would welcome the establishment of an SRA that will be able to take over the CCTV assets of the HPP. We simply do not have the manpower or the budget to effectively run such an operation,” he said.
“It would not be possible for us to change the current CID that manages HPP into an SRA as was done in Cape Town as the law does not make provision for this. It is, however, possible for the CID to continue operating through another form of funding,” Coetzee said.
Resident Michael Farr, who has been instrumental in establishing and successfully managing four CIDs in the Cape Town Metropole, said the current infighting is creating a lot of uncertainty and confusion among residents.
“What the actual goal should be is becoming lost in all the commotion. All communities in the Overstrand should come together in unity of purpose. That purpose must be how do we keep our area safe and ensure continued economic growth. If this single objective is ignored, we will be overrun by crime and grime from which in all likelihood we would not be able to recover.
“The simplest way to get an SRA off the ground would be to use the current boundaries of the CID as very little would change for residents. They would continue to pay the levy that they have become accustomed to over the past 18 years and would continue to receive the services that they are accustomed to. From there other SRAs in other areas can come into being. This will be more difficult as residents might be less inclined to pay an extra levy,” said Farr.
According to him, the challenge facing the current CID is creating an SRA that can continue the work the HPP did within the limited timeframe available. “A complete business plan, underscored by an intensive public participation process, must be presented to the municipality by no later than end September for it to be included in the next budget cycle.
“As the plan stands now, we might be faced with a situation where HPP runs out of funds and must wind down before a new structure is in place. This will leave us with a service gap which is not desirable. According to the Municipal Finances Act, provision is however made for the formation of public-private partnerships that can include an SRA. In short, we have to look at an holistic approach to the problem and work within the confines of what we are faced with and make the best of that.”
Farr reiterated that a unified vision of the future is the only way in which the current problems can be overcome. “if we do not have that, we will fail in our mission to keep our areas safe and crime free. That would be disastrous to the economy of the whole region and we cannot allow for that to happen.”