ST FRANCIS BAY RESIDENTS’ ASSOCIATION
PROPOSALS FOR PRIVATISATION OF THE CANALS
COMMENT FOR PUBLIC MEETING SCHEDULED FOR 16 MARCH, 2006
1. |
Support in Principle The SFBRA fully supports the concept of privatisation of the canal system, and placing responsibility for maintenance of the canals in the hands of a responsible and properly constituted body comprising riparian owners on the canals. However, this is a major responsibility for the community, and great care needs to be exercised in the manner in which the body is established, and the agreement reached with Council, to ensure that property owners are not prejudiced in any way. |
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2. |
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Specific Concerns The following specific concerns have been identified
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2.1 |
Controlling body: Homeowners Association HOAs are normally set up by a developer at the time of establishment of a development. The rules are clearly stated prior to purchase, and are a condition of sale of property. It is questioned whether it is practical to establish an HOA once the development has been established.
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In particular, answers are needed to the following questions:
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The SFBRA questions why it is necessary to establish both an HOA and a Section 21 Company, membership of which would be limited to riparian owners. Would it not be sufficient simply to establish the Section 21 Company? Both would require approval by riparian owners. |
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| 3 | Draft Agreement with Council |
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Safeguards |
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| ~ | There is inadequate provision for protection against liability for latent defects in the canal system. Examples of such defects are the unresolved problems presented on Moby Dick Wharf by the new canal extension; and possible break-through by the sea into the ski basin. The agreement with Council should cover only dredging of the canal system and maintenance of municipal jetties, and not the viability of the canal system as such. | |||||||||
| ~ | The current municipal dredger needs to be fully re-conditioned, to the satisfaction of a competent assessor, or replaced. No agreement should be signed which does not clearly place responsibility for this with the Municipality. | |||||||||
| ~ | There should be clear provision for non-liability of directors for actions arising out of their exercising of their duty. | |||||||||
| ~ | No agreement should be signed without a careful examination of any contract document signed by the Municipality with the contractors. A totally new contract to be negotiated on the expiry of the existing contract. | |||||||||
| ~ | There is a need for a full professional investigation of the canal system by the best available expertise, to indicate the most cost-effective way to deal with the problems. This could influence the agreement. The RA is prepared to finance An initial investigation by ASR, whose expertise also extends to canal construction. Current levels of expertise are based entirely on local knowledge and experience, and the projected costs are significantly greater than those which would apply internationally. | |||||||||
| ~ | The proposed agreement with Council, that all income received from riparian levies, boat registration and fines, less a 5% handling charge, be paid into a fund which is ring-fenced for expenditure on canal maintenance, is welcomed. However, a clause should be added that this fund is to be administered by the Company, audited annually by an external auditor approved by both the Municipality and by the Company | |||||||||
| ~ | The canal system is one component in a complex waterways system, which also includes the Kromme River, the coastline and the dune system. Provision should be made in the agreement for ultimate integration of the canal maintenance into an integrated management system, involving all of the relevant components, but without prejudice to the canal maintenance agreement | |||||||||
| ~ | The revised draft agreement should be vetted by an independent professional firm of attorneys. The SFRA is prepared to sponsor this. | |||||||||
Business Plan |
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Municipal Approval |
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| PROPOSAL | ||||||||||
| 1 | That this meeting approves the privatisation of the maintenance of the canal system, as the most workable way to ensure that the canals remain viable; | |||||||||
| 2 | That further attention be paid to the need for both an HOA and a Section 21 Company; that written answers be requested from the Municipality to the specific questions raised with regard to the Homeowners Association; and that consideration be given to the formation of a Section 21 Company only, with membership limited to, but to include all riparian owners on the canal system. The Section 21 Company to be administered by a Board of Directors, democratically elected at a General Meeting of members convened for the purpose, and acting in an honorary capacity; | |||||||||
| 3 | That the Directors continue to negotiate an agreement with Council regarding the maintenance of the canals, based on the draft agreement, but to include the eight safeguards proposed by the SFRA; | |||||||||
| 4 | That Council out-sources responsibility for canal maintenance to the company, in return for financial support based on all revenues derived from the canal system, less a 5% handling fee, which fund shall be externally audited; | |||||||||
| 5 | That the Directors be delegated responsibility for negotiating contracts with expert consultants and with contractors, for the most cost-effective method of maintaining the canals. A totally new contract to be negotiated on its expiry. | |||||||||
| 6 | That provision be made in the agreement for ultimate incorporation of the scheme into a broader, integrated management plan for the canals, the Kromme River, the immediate coastline and the adjacent dune system, but without prejudice to the envisaged canal maintenance programme. | |||||||||
| 7 | That the promoters of the scheme develop a business plan within a period of two months, from which a budget for the first year to be prepared. | |||||||||
| 8 | That constant use be made of the SFBRA website www.stfrancisbay.org by the Directors, in order to assist in the dissemination of information to absentee home owners. | |||||||||
| Document prepared by Hilton Thorpe on behalf of the SFBRA. | ||||||||||
| 16 March, 2006 | ||||||||||
