Local Government Laws Amendment Bill [B28-2007]: briefing

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
21 August 2007
LOCAL GOVERNMENT LAWS AMENDMENT BILL: BRIEFING

Chairperson: Mr S Tsenoli (ANC)

Documents handed out:
Local Government Laws Amendment Bill presentation
Local Government Laws Amendment Bill [B28-2007]

Relevant documents:
Policy process on system of Provincial and Local Government: Background policy questions, process and participation
Remarks made to Media on 31 July 2007 by Director General on White Paper Process  
Policy Process Powerpoint Presentation by Ms Lindiwe Msengana-Ndlela, Director-General

SUMMARY
The Committee was briefed on the Local Government Laws Amendment Bill by the Director General. The Bill amends the Municipal Demarcation Act (1998), Municipal Structures Act (1998), Municipal Systems Act (2000), Municipal Finance Management Act (2003) and the Municipal Property Rates Act (2004). The Department considered the amendments to be necessary and urgent as municipalities were facing challenges in implementing the Acts as they were. The Bill was an interim measure and the Department made it clear that it was engaged in a long-term process of reviewing local government policy and legislation.  

MINUTES
Local Government Laws Amendment Bill: briefing
The Department delegation comprised of the Director-General, Ms Lindiwe Msengana-Ndlela; Mr Elroy Africa, Deputy Director-General: Systems and Capacity Building; Mr Yusuf Patel, Deputy Director-General : Free Basic Services and Infrastructure; Mr Mizilikazi Manyike, Acting Executive Manager: Intergovernmental Fiscal Regulations; Ms Veronica Mafoko, Senior Manager Equitable Share and Fiscal Transfers; Mr Myron Peter, Executive Manager: Local Government Institutional and Administrative Systems; Mr Litha Twaku, Senior Manager: Cabinet and Parliamentary Support..

The Director-General commenced the briefing by touching on the key elements of Project Consolidate, one of which was a systematic refinement of policy, fiscal and institutional matters that would enable the consolidation of the local government system in the long term. The Bill was one such attempt at giving effect to the aforementioned. The Bill amends the Municipal Demarcation Act (1998), Municipal Structures Act (1998), Municipal Systems Act (2000), Municipal Finance Management Act (2003) and the Municipal Property Rates Act (2004). The amendments were considered to be necessary and urgent.

Clauses 1, 2, 3, 9 and 10 dealt with amendments to the Municipal Demarcation Act and the Municipal Structures Act. The amendments dealt with fiscal alignment with boundary re-determinations, with authorisations to perform certain functions and adjustments of powers and functions between municipalities. The idea was to improve planning and budgeting for service delivery.

A number of amendments were made to the Municipal Systems Act (MSA). Clause 12 was specific on the contract term of Municipal Managers. Clause 15 removed ambiguity regarding the Minister’s authority to issue regulations and additionally allowed for consultation with the Minister for Public Service and Administration on this. Clause 24 amended the Code of Conduct for Municipal Staff Members to include the declaration of interests by senior municipal officials. Clause 18 empowered the Minister to advise the MEC to conduct an investigation in instances of non-performance and maladministration of municipalities and to provide the Minister and the Minister of Finance with a report on the outcome thereof. Clauses 21 and 23 aimed at aligning the MSA with the Municipal Finance Management Act (MFMA) and its regulations leading to a prohibition of awarding a contract by a municipal council to a person who was in the service of the state or was an advisor contracted to the municipality. Clause 14 dealt with the participation of municipal officials as candidates in elections for Parliament, provincial legislatures and the municipal councils. Clause 17 provides that municipalities should provide owners of properties with copies of electricity and water accounts sent to tenants if requested to do so. Clause 19 reduced the waiting period for a rates clearance certificate from 120 days to 60 days. The rest of the amendments were technical corrections.

Amendments were also effected to the Municipal Property Rates Act. Clause 26 proposed to allow a rates policy not to reflect the quantification in terms of cost ie. revenue forgone to the municipality. Clause 29 gave effect to the provisions of Clause 26. Clause 27 allowed for municipalities not to be compelled to value public service infrastructure where there was no intention to levy rates on such infrastructure. Clause 31 provided for a technical amendment pertaining to a correct citation. A further amendment provided for the use of different ratios as it relates to different property categories such as agriculture, commerce and industry given that the Act allows for differential rating. Clause 32 provides for the curbing of rates revenues either as a basket or per category of properties. Technical amendments were also effected to the Act. The Bill lastly contains a Schedule that provided for the repeal of redundant legislation. The Jan Kemp Act (1964) and the Promotion of Local Government Affairs Act (1983) were amongst those pieces of legislation to be repealed. 

Discussion
The Chair asked what responses had the Department received on the Bill.

Mr S Mashudulu (ANC) asked what work had the Department done on old outdated apartheid laws. He was concerned that municipalities were hampered by outdated by-laws.

Mr Peter stated that the Bill attempts to deal with outdated laws. The intention of the Department was to deal with outdated by-laws as well. Ordinances were also to be looked at by the Department during the latter part of 2007.

Mr P Smith (IFP) felt the Bill to be a limited packet of changes. It was thought that the Bill would have contained more substantive amendments. He asked on what basis had the Department chosen the current set of amendments and why were they regarded as necessary and urgent. He also asked whether performance contracts were considered a legal or an administrative issue. Mr Smith reminded the Chair that the Committee had agreed that political parties would suggest their own amendments to the pieces of legislation amended by the Bill.

Mr Africa replied that the Bill contained a limited set of changes. The rationale in choosing what was to be included in the Bill was based on what amendments were necessary and urgent. If the amendments were not to be made, problems could be experienced by municipalities. The Department had thus identified areas that required change. A phased approach had been adopted. The process started by way of teasing out matters during the Policy Review process but the Department realised that there were technical matters that required immediate change. 
  
Mr Peter responded that performance contracts were both legal and administrative. A set of regulations dealt specifically with the issue. The idea was for the process in dealing with performance management contracts to be more transparent and less ambiguous.

The DG stated that in the Bill, reference was made to enforcing performance measures legislatively. Where ambiguity was present in legislation, amending it was regarded as urgent. The second issue was to focus on human resource capacity and financial viability. The issue was about how the public was being affected. For example changes in the property investment market required changes to be made in legislation. Where an opportunity to amend legislation presented itself and it was indeed needed, advantage must be taken.

Mr Manyike pointed out that the Department had been working with municipalities in implementing legislation since 2005. Practical headaches had surfaced hence the amendments proposed in the Bill. 

Mr Tsenoli commented that political parties were still entitled to suggest amendments when they were ready to do so. He once again asked what responses had been received on the Bill and how had the Department dealt with these. The Chair requested copies of the responses received.

Mr Peter responded that a great deal of comment had been received on the Bill. Amongst those from whom comments had been received were SALGA, KZN Municipality, Gauteng Municipality, EDI Holdings, IMATU and the Municipal Demarcation Board. Broadly there was a great deal of support for the Bill with minor changes being recommended. No serious objections to the Bill had been received.

Mr W Doman (DA) asked whether all problems relating to ward committees had been addressed or were in the process of being addressed. He asked how the amendments contained in the Bill would impact upon the operations of ward committees.

The Department felt that the system of ward committees had worked well for the better part but that there was a need to find ways of strengthening community participation in law. The Bill did give effect to this intention. Mr Africa noted that there were legal and constitutional concerns on the provisions but that legal opinion was being taken on the issue.  

Mr Mashudulu requested the Department to engage more with constituencies on the issue of ordinances.

Mr Smith asked for precise time-frames on the process, given that the Bill was an interim necessary step. He noted that a brief concise enumeration of things that were to be amended by the Department would be useful to the Committee. Regulations that went hand in hand with the Acts, were also requested from the Department.

The DG reiterated that the Bill addressed amendments that were required as a matter of urgency and necessity but that there were also fundamental issues to be addressed in the long-term. Inputs were expected to be submitted by 31 October 2007. Thereafter there would be the Green Paper and the Review process. The White Paper should be available by year-end 2008.

Mr Tsenoli asked about the provision in the Bill which allowed for consultation with the Department of Public Service and Administration (DPSA).
 
The Chair also referred to the issue of renewable and non-renewable contracts. He pointed out that when terms of employment end, individuals depart leaving a void, which could be problematic. Service delivery was surely to be impacted upon by the loss of individuals. Even though long-term contracts were no longer considered, he asked whether the issue was being sufficiently addressed. Mr Tsenoli felt that the issue needed to be confronted headlong.

The DG replied that non-renewable contracts were an issue that was raised in the inputs received from the public. Even though the Bill did not address the issue, the issue could still be discussed. 

Mr Peter said that legislation currently allows for the extension of Municipal Manager contract provisions to other managers. He noted that there was a process of engagement between the Department and the Committee and suggested that perhaps the month of September 2007 be used to refine the legislation.
Mr Peter stated that Ministers encouraged its officials to assist their counterparts in other departments. Consequently the Department engaged with the DPSA and other departments.

A representative from SALGA stated that SALGA supported the Department’s initiative to clear the statute books of old legislation.

Mr M Nonkonyana (ANC) noted that the Section 81 of the Municipal Structures Act allowed for 20% participation by traditional leaders. He asked why the Bill was quiet on the role of traditional leaders. Also there could be clashes between the ward system and traditional leaders found in the same area. He wondered how were the two systems to work together.

The Chair proceeded to take the Committee through the Bill page by page and asked members to note down areas of concern to themselves.

The meeting was adjourned.