Municipal Structures Amendment Bill: discussion

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Cooperative Governance and Traditional Affairs

29 August 2000
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Meeting Summary

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Meeting report

PROVINCIAL & LOCAL GOVERNMENT PORTFOLIO COMMITTEE
30 August 2000
LOCAL GOVERNMENT: MUNICIPAL STRUCTURES AMENDMENT BILL

Relevant Documents:
Local Government: Municipal Structures Amendment Bill [B51-2000]
Proposed amendment to Clause 5(b) of the Bill [attached to end of minutes]
Proposed amendments to the Municipal Structures Amendment Bill

SUMMARY
The Committee discussed new amendments to the Municipal Structures Amendment Bill. Representatives of the Department took the Committee through these proposed amendments. The Committee became entangled in a discussion of clause 4, setting out the Department's amendment to s 91 of Act 117 of 1998 dealing with the exemption of a municipality from the requirement to elect a chairperson or speaker. The Committee finally decided not to accept the Department's proposed amendment.

The Municipal Demarcation Board felt that more specific definitions are needed to clarify powers and functions as between local municipalities and district municipalities in s 84. Legal opinion obtained by the Demarcation Board on the definitions would be forwarded to the Committee for consideration by the members. The Department recommended that a minimalist approach be followed in the definitions so that the Bill should not pre-empt other sectoral legislation. The Committee agreed to give the Board and the Department an opportunity to sort themselves out and come up with a unique approach to the definitions.

The Chairperson expressed a concern that the flurry of legal opinion bombarding the legislature sometimes misses the initial intention of a Bill and raises serious questions about the role played by politicians in the actual law making. He said he is often amazed at how little of the initial intention is left in a Bill in the end and how much the Bill has been influenced by legal opinion. He recognised the need to ensure that legislation survives court scrutiny but that this must be the main reason for obtaining legal advice and not merely to accommodate every opinion. A number of clauses were referred for the attention of the Technical Sub-Committee.

MINUTES
The Committee Chairperson, Mr Carrim, opened the meeting with the comment that, whereas it appears fine on paper, some aspects of the Bill may be difficult to implement in practice. To his mind, the main issues revolve around legal certainty and the problem of meeting deadlines.

A representative of the Department undertook to go over the tabled Amendment Bill. Discussion broke out over clause 4 of the Amendment Bill, which sets out the Department's proposed amendment to s 91 of Act 117 of 1998. The discussion centred on the section's allowing a municipality to be exempted from the requirement of s 36 that a chairperson, or speaker, be elected. The Committee discussed in some detail whether this was a requirement from which a municipality could be exempted.

The Department representative pointed out that the emphasis in the Constitution at s 160 concerning the election of a chairperson, or speaker, is on when the speaker is elected and the fact that a municipality is under a compulsion to elect a speaker. He wondered if the exemption of s 36 would call the compulsion into question. Ms. Verwoerd (ANC) thought not, considering the compulsion is covered by the Constitution.

After a great deal of further discussion and uncertainty, the Committee decided not to accept the proposed amendment at clause 4. Ms. Verwoerd reminded the Committee that it was not a substantive issue, but one that could be discussed with the Department and returned to later.

Afternoon session:
New Clause 3 Proposed amendment to section 84 of the Municipal Structures Act
Mr M Sutcliffe, Chairperson of the Municipal Demarcation Board, said a new clause 3 is proposed in the Bill to amend section 84 of the principal Act. He said a need emerged to clarify functions and powers at local government level to enable stakeholders to deal with matters such as staff, assets, liabilities.

Mr Sutcliffe said legal opinion was sort to look at competencies of local government in terms of the Constitution. Problems that have been encountered include the fact that provinces have different precedents as each province deals with powers and functions differently. Legal opinion says generality of section 84 is acceptable but linked with section 95 it creates uncertainty.

The DMB engaged in discussion with the Minister, the Director-General and MECs in provinces to get consensus on the basic definitions in section 84. For instance, whether "integrated development planning" involves land planning and transport planning. There is a need to clarify concepts such as "bulk supply" as opposed to "reticulation" when dealing with water supply. Also when dealing with bulk supply of electricity there is a need to be more specific, to say whether this includes transmission, distribution and generation.

There is a need to say exactly what the division of powers and functions is between district and local municipalities relating to bulk water supply, bulk electricity supply, bulk sewage disposal, solid waste disposal, municipal roads and airports, municipal health services, fresh produces, cemeteries, etc.

Mr Sutcliffe mentioned that there has been a shift in water services and health towards giving the services to local government. He said he feels that if these are going to be municipal competencies they should be dealt with in this Bill.

Ms J Manche, Deputy Director-General in the Department, said it should be recognised that the Municipal Structures Bill is a general Bill. Sectoral legislation is to deal with various issues such as health, water, parking, etc. It has been difficult to come up with definitions not informed by different national legislation. She warned against trying to detail "things that we have no certainty of how they would shape" in the Bill. Whatever the Department of Provincial and Local Government does it should not have negative effects on other sectoral departments or prompt legislation and policy they plan. She proposed that a minimalist approach should be taken since this is general legislation and also considering that other Departments are coming up with their own legislation and policy.

She said she feels that the redefinition of powers and functions of local municipalities and district municipalities take into consideration also other sectoral concerns.

Mr Bhabha (ANC) said the amendments are coming as a result of difficulties in implementing the Municipal Structures Act. The original intention was to find a meaningful role for district councils. There is a need to restructure organograms as it would be highly untenable to leave things as they are. A flexible approach should be adopted. He said he does not think that section 84(3) is required at all.

The Chairperson said he is in favour of giving the Department and the MDB a chance to brainstorm and provide a framework for a different approach. The essential question is whether the different views relating to section 84 are such a big problem. In this regard he asked the Mr Sutcliffe to supply the Committee with the different legal interpretations on the section in his possession to give Parties a sense of what the issues are. He said it is important to fine tune section 84 so that there are no legal problems, etc. He agreed with Ms Manche that it would not be proper to legislate on areas of other departments.

Mr Sutcliffe said he does not think there is such a fundamental difference in approach. A problem at the moment is that every MEC has to publish a set of section 12 notices. The definition of what should be contained in these varies across South Africa and a practical problem arising is who is in charge of what.

What the MDB did was to go through a process of involving provincial Departments to get legal people representing MECs to come up with minimalist definitions for section 84. These do not represent views of sectoral ministries and departments. The consultation with provincial departments was not to say they should impose on sectoral legislation but it should be able to assist in shaping the Bills.

Section 84(2) - the Committee agreed that the section should stay the same.

Section 84(3)
The Chairperson said the Department needs to deal with the question whether this subsection might be unnecessary as it may be duplicating what is in section 85.

It was pointed out that section 84(3) allows for a whole function to be handled by a district council as opposed to section 85 which deals with aspects of powers. It was agreed that it would be necessary to carefully consider the section in the Technical Sub-Committee.

Clause 5 Amendment of section 93 of the Municipal Structures Act
Mr F Louw of the Department said the new amendments proposed to omit paragraph (a) of the Amendment Bill and to substitute:
(a) by the substitution for subsection (2) of the following subsection:
"(2) If any conflict relating to matters dealt with in this Act arises between this Act and the provisions of any other law, except the Constitution and Chapter 2 of the Local Government: Municipal Structures Amendment Act, 2000, the provisions of this Act prevail."

Mr Louw said paragraph (c) preserves section 10G of the Local Government Transition Act, 1993 in the interim phase so as to bring certainty in the financial management of a municipality. Mr Carrim noted that in any event section 10G(3) still requires a two thirds majority to be amended.

Mr Bhabha said it becomes clumsy to keep on referring to the Local Government Transition Act every now and then in the Bill. Why not just reproduce the relevant provisions of the Act in this Bill?

Dr Bauer said it is possible to do so but that would mean the Bill would have to provide a whole set of definitions of the terms used in the provisions of the Local Government Transition Act.

Mr Bhabha suggested that these provisions may be contained in a separate chapter accompanied by the said definitions. It was agreed that this could be done and the drafters would look into it.

Proposed amendment to subsection (5)(b)
The drafters explained why in clause 5(c) an amendment to subsection (5)(b) is necessary.

The Department said the amendment seeks to address practical problems raised by the first time valuation of properties for municipal rating purposes. In the Cape Municipality there was unhappiness about a requirement in the Provincial Ordinance of the Western Cape saying that there must be physical inspection of property when a valuation is done. This would be time consuming and expensive with the result that the July 2002 deadline for valuations would not be met.

The proposed insertion of clause 10G(6A) allows municipalities the flexibility to choose whether to use comparative, analytical and other systems or techniques referred to in the clause.

The Chairperson noted that the provinces cannot simply amend the Provincial Ordinances as the Constitution assumed the power do so to national government. He said it is not only the municipality that wants the amendment; the Provincial MEC in Western Cape wants it and it is consistent with the Property Rates Bill and is only a temporary measure.

The Department proposed in the inserted section 6A(b)(ii) before "comparative" to insert "in view of valuation by a valuer, or in addition thereto".

Chapter 2
Amendment of section 6 of the Municipal Structures Act
Transitional Arrangements in Respect of New Local Government Dispensation

The Department explained why this chapter is necessary: the Municipal Structures Act was crafted for the future and does not take into account the transition. The attempt here is to collect all transitional arrangements into one chapter. There is a need to address a practical legal problem around section 85 where the Department had to revise capacity assessment not to relate to functions and powers.

Clause 7(1) provides for definitions.

Clause 8
The clause provides for the duration of the transition which will only endure five years from the date of the first election of municipal councils. The application of chapter 2 also ends with the end of the transition.

Clause 9
Subclause (a) is not replacing section 12 but must be read into it to address certain problems encountered in practice.

Clause 10
The clause allows for the transitional application of section 14 of the Municipal Structures Act to a district municipality and the local municipalities within the area of the district municipality.

Mr P Smith (IFP) referring to the transfer of staff in terms of clause 10(4)(a) asked what happens if municipalities get into schemes of asset stripping and salary inflation. He asked if the Bill contains a clause allowing for retrospective application of its provisions so as to prevent practices such as these.

The Chairperson said the Department's legal advisors should think about the retroactive application of the Bill and report to the Committee on that.

Clause 11
The clause provides for section 16 of the Municipal Structures Act to apply during the transition.

Clause 12
The clause provides for the MEC for local government to consult organised local government in a province and publish particulars of a proposed section 12 or 16 notice before final publication of the notice.

A member said he feels uneasy about the consultation in the clause. It was felt that the Department should look at the time frames and how elaborate the consultation should be.

Clause 14
The clause provides for transitional adjustment of functions and powers of a municipality. The Department said the only thing to be put on hold in terms of clause 14(1) is the assessment of capacity.

The Chairperson remarked that it is disturbing how much of what they as politicians initially intend to be in a piece of legislation is finally left out by lawyers. This he said raises the question whether they as Parliament are actually making the law. He said he realises the importance that a law passed by Parliament should pass scrutiny by Courts but the legal opinion given should not detract from the intention of the legislature.

The Chairperson said the Department and the MDB should get together and come up with a unique approach to section 84 and provide the Committee with a written version of that together with a consolidated and revised formulation of the proposed amendments after consideration by the technical team. He also reminded the Chairperson of the Demarcation Board to provide the Committee with the legal opinion on the definitions in section 84.

The Committee adjourned for supper and proposed to go on to consider the Municipal Systems Bill afterwards until 10 pm. This session was noted minuted.

Appendix 1:
PROPOSED AMENDMENT TO CLAUSE 5(b) OF THE LOCAL GOVERNMENT; MUNICIPAL STRUCTURES ACT AMENDMENT BILL, 2000-08-29

1. It is proposed that the words ''in lieu of valuation by a valuer, or in addition thereto,'' be inserted before the word ''comparative'' in the proposed new section 10G(6A)(b)(ii) of the Local Government Transition Act, 209 of 1993 (the ''Transition'' Act).

2. While the proposed new section 10G(6A) of the Transition Act goes some way towards addressing the practical problems raised by the first-time valuation country-wide of properties for municipal rating purposes, the requirement in most provinces that valuations be made by registered will substantially prolong the length and cost of the new general valuation processes. For example, the requirement that valuers determine all values will prolong the current general valuation of all properties in the Cape Metropolitan Area by but up to two years, thereby pushing out to 2004 the 1 July 2002 implementation date for the new valuation roll.

3. The provinces affected include Gauteng, Mpumalanga, the Northern Province, the Western Cape and parts of the Eastern Cape, Northern Cape and the North West, …

4. It is accordingly proposed that the municipalities be given the flexibility to choose whether to use the comparative, analytical and other systems or techniques referred to in the new section 10G(6A)(b)(ii) in addition to valuation by valuers, or in lieu of valuation by valuers.

5. The proposed amendment is consistent with clauses 32 and 33 of the Draft Property Rates Bill, which does not specify who must value properties for rating purposes.

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