Mayor to scrutinise accounts after R127m spent in last four years
Tens of millions of rands have been poured into defending lawsuits against the Nelson Mandela Bay Municipality and obtaining legal advice – with the bill rocketing to about R56.3-million in the last financial year.
The amount, which was paid to private law firms, is more than double the R22.8million spent by the metro the year before.
A leaked municipal report details how the city racked up R126.9-million in the past four financial years on litigation, opinions, legal expenses and collection fees.
This also includes legal advice and the disciplinary cases of some senior municipal staff.
However, it is unclear from the report if the amounts include damage claims paid out by the city.
The municipal departments that have accumulated the most legal bills this year are the human settlements department, which spent R18.3million, followed by budget and treasury (R17.6-million) and the chief operating officer (R10.1-million).
The report does not list the cases that were handled by the firms on the municipality’s legal panel, just the expenses incurred.
The legal panel is a pool which the city draws from to pursue civil litigation, collections, conveyancing, litigation, labour and employment law, municipal law and commercial and corporate law, among others.
The metro is tangled in a number of disciplinary cases with senior staff who were suspended, some for alleged irregularities and gross negligence.
Some of the cases have landed in court.
Outside attorneys are also representing the municipality in some disciplinary hearings.
The city is, further, defending itself against Port Elizabeth businesses, which call themselves the High-Energy Users Group, and pursued a lawsuit against the public protector for her findings on a Uitenhage housing construction project.
Mayor Athol Trollip said the R126.9-million legal bill was wasteful and entirely unnecessary.
He said every proposed legal expense would be scrutinised in future by himself and acting city manager Johann Mettler.
“It will only be signed off if deemed to be absolutely crucial and necessary,” Trollip said.
The municipality’s legal sub-directorate would also be reviewed and beefed up.
“This is to ensure legal services are insourced, except where specialist opinion or litigation is required,” he said.
“We will no longer spend taxpayers’ money defending indefensible maladministration and corruption. “By stopping corruption and operating within the law, we will avoid unnecessary and expensive legal battles, which have been the hallmark of our predecessors.”
Mettler said the amounts paid to the private law firms may constitute legal fees, disbursements payable to arbitrators, counsel and expert witnesses, among others.
“Alternatively, they may include amounts paid in settlement of capital awarded to other parties and/or the taxed costs of unsuccessful parties,” he said.
“Amounts will vary from case to case.”
The municipality has come under fire several times over the years for spending large amounts of money on legal fees when it has a legal services department that could handle some of the cases.
However, due to major staff shortages and a growing caseload, the municipality is forced to refer cases to private law firms.
Also, municipal staff are prohibited by law from defending their employer in court, according to chief operating officer Mzwakhe Clay.
There are six legal practitioners employed by the municipality.
At a municipal public accounts committee (Mpac) meeting a week ago, councillors raised concerns about uncertainty over what the legal services department’s duties were.
Budget and treasury portfolio head Retief Odendaal complained about the R56.3-million spent on legal consultants in the last financial year.
“It is grossly out of hand.”
It is 2.5 times the amount compared to the previous year,” he said.
ANC councillor Makhi Feni asked for a comprehensive report to explain the role of the metro’s legal services department.
DA councillor Charles Garai said: “I have serious concerns about what is happening in legal services.”
Acting executive director of corporate services Vuyo Zitumane said the municipality’s legal services department did not have staff to represent it in court.
The Mpac has previously recommended that in dealing with a large number of lawsuits, the municipality should assess each case to ascertain if it would be cheaper to settle out of court rather than pursue the lawsuits.
In April, the municipality made a R1.5-million out-of-court settlement for the care of a traumatised Uitenhage mother whose son was electrocuted while playing soccer in 2011.
The municipality has also been in a complicated legal saga with businessman Phillip Georgiou and his wife, Yvette, for the past five years.
The latest battle involves the approval of building plans at their lavish property in Kragga Kamma.
In February, the municipality was ordered to cough up more than R1.18-million after a Uitenhage pensioner successfully sued when firemen neglected to properly put out smouldering embers on a vacant plot behind his house, which burnt down.
AfriForum and the Nelson Mandela Bay Ratepayers’ Association have also taken the municipality to court to have Access Management’s contract as the operator of the Nelson Mandela Bay Stadium set aside.
Former city boss Lindiwe Msengana- Ndlela was awarded R3.1-million in damages in May last year after the municipality failed to convince the Port Elizabeth High Court that former mayor Ben Fihla had not threatened or forced out the city manager.