Local Government Laws Amendment Bill: public hearings

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Cooperative Governance and Traditional Affairs

14 October 2002
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Meeting Summary

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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
15 October 2002
LOCAL GOVERNMENT LAW AMENDMENT BILL: PUBLIC HEARINGS

Chairperson:
Mr Y Carrim

Documents handed out:
SALGA Submission
Rates Action Group submission
City of Cape Town Submission
Local Government Law Amendment Bill [B61-2002] (as tabled)
Local Government Laws Amendment Bill (prior to certification)

Chairperson:
Mr Y Carrim

SUMMARY
The Committee heard submissions on the Local Government Laws Amendment Bill from South African Local Government Association (SALGA), the Rates Action Group (RAG) and Mallinicks Attorneys on behalf of the City of Cape Town. It thereafter went through the Bill clause by clause.

MINUTES
The Chair apologized for the late arrival of committee members and expressed his dissatisfaction because the members had been given good notice of the public hearing.

SALGA submission
Councillor Masemola noted that SALGA expressed agreement with the entire content of the Bill. It was noted that because the body was in the process of restructuring, the amendments to this Bill would assist them in that regard. The consequences of the amendments from SALGA's view point were set out in the submission in order to substantiate their argument.

Discussion
The Chair wondered if the proposed amendments to S 84 had not already been agreed upon. The Committee responded that the amendment had been agreed upon.

The Chair pointed out that the amendments to S 109 had more or less been agreed upon. He noted that since the latest text of the Bill was still on its way, they would currently deal with the text as of 25 September 2002.

Dr Bouwer (Director of Legal Services: Department of Provincial & Local Government) drew the Committee's attention to the fact that the Bill finalized by the State Law Advisor would only be slightly different to the Bill the Committee had before them. He referred to the technical amendments that had been brought to light two weeks earlier.

Councillor Masemola added that SALGA viewed a large degree of the amendments as technical.

The Chair explained that he would prefer it if the Committee could vote on the Bill by Friday 18 October 2002, thereby ensuring that the Bill would be ready for the NCOP to sign on 24 October 2002. Should there be severe problems with the Bill, the Committee would pass the Bill as a whole whilst noting that they did not agree to certain clauses. As with the usual process in Parliament, this would then mean that the matter would be referred back to them from the NCOP in January 2003 for finalization.

Ms G Borman (DP) clarified that the Chair meant that all pressing or difficult issues could be deferred until then.

The Chair responded that technically the Committee would say that they reject the amendments. However, the amendments would be referred back to the Committee in 2003.

Mr Uys (NNP) wanted to know how the procedural aspects with regards to the new amendments would be dealt with.

The Chair felt that this was a good question and sought a response.

Ms Borman stated that it would be better to await the latest version of the Bill.

The Chair explained that the text would not be substantially different. Thus the Committee had the correct text for now.

The Chair stated that although the Committee did not have particular views on the proposals made by SALGA, it appeared that substantial and fundamental proposals had been made. He said that this situation was unusual at this stage because it would be difficult to accommodate substantial amendments at this stage. Whilst understanding the reasons behind the proposals, the Chair expressed concern with the time constraints faced by the Committee. Thus he proposed that the Committee would defer consideration of the amendments until the Bill's return from the NCOP. He asked SALGA whether they had any problem with this.

Counsilor Masemola did not object to the proposal.

Ms Borman referred to point 6 in the submission and wanted to know what the ward candidate would obtain.

Councillor Masemola responded that the Schedule to the Act required that in determining the allocation of seats to a party, one must consider the votes cast in favour of the ward candidate. As such, there would be no election for a ward candidate where there is a lack of votes to count.

Mr Bouwer referred the committee to Item 13 (1) (b) of Schedule 1. He used the item to support the statement made by SALGA. He added that Schedule 1 and Schedule 2 did make provision for unopposed lists.

The Chair explained that this meant that in a ward with only one ward candidate, there would not be a ward election although the party lists would remain. He stated that the option to vote for the ward would be unavailable.

Ms Borman did not think that this situation would ever arise.

The Chair referred to it as a 'small miniscule reservation'.

Mr Uys referred to point 8 in the submission and asked if that matter was also being deferred.

The Chair explained that this proposal was slightly different to the proposed fundamental changes dealing with the organization of local government with potentially far-reaching consequences. The proposal in point 8 flowed from practical reason. As such he felt that the Committee could apply their minds to it.

A member did not see the need for the amendment.

The Chair stated that S 59 was read as referring to the powers of the Council. He noted that this was a critical interpretation. This meant that the system of delegation would refer to the powers of the council and would therefore have to be included therein. However, certain powers would not fall into the Council and he gave the example of management powers.

Mr Uys agreed. He understood that sub-delegations would be covered by the initial Council empowering provision. However, they would necessarily have to be clarified because the provision was not clear.

Counsilor Masemola said that there would be no need to discuss the matter then if the power rested in the Council.

The Chair explained that the practical problem with the provision would have to be corrected.

Counsilor Masemola stated that SALGA had been advised that S 59 did not deal with Municipal authority.

The Chair said that the matter could be resolved by following the proposal made by Mr Uys.

A member suggested that a legal opinion should be obtained. The Chair agreed.

Ms Manche stated that sub-delegation could be accommodated within S 59.

The Chair called for the amendment to be made. He added that the Committee would like the opinion within a day.

Mr Bouwer referred to the original powers for delegation.

The Chair interrupted him and stated that it was for that reason that the Committee was being called to apply their legal minds to the matter and not to discuss the issue further at this point.

Ms Borman referring to point 12 of the submission asked if the amendment would mean that an owner would become liable for service charges accrued by a lessee, for example.

The Chair explained the situation:
- over the last two years X has been renting a house
- X accumulated rates due to the municipality
- the house is sold to Y
- will Y be held responsible for the debts of X?

SALGA agreed with the example given and stated that Y would be possibly be held liable for the debts of X without an amendment to the legislation.

Mr Uys did not think that the text intended for that situation to occur. Thus the text would have to be clarified.

The Chair stated that it would be very wrong to carry liability over in this manner.

The Chair thanked SALGA for their submission. He took the opportunity to welcome schoolchildren that had come to view the public hearings.

Rates Action Group submission
Dr White stated that the amendment sought by the City of Cape Town to validate an illegal valuation process should not be passed by the Committee. He did not think that they were dealing with a technical amendment. Rather, he argued that the City of Cape Town was attempting to overstep the Constitution. He stated that a public participation process should have been held but that this had not occurred. He noted that although the City of Cape Town was aware of the legal impediments to the valuation process over a year ago, action was only taken when the matter was taken to the courts. He emphasized that Parliament should not consider the amendment and cautioned them that if they were to pass the amendment, he would take the matter to the Constitutional Court.

The Chair thanked Dr White. He felt that the Committee should engage in both sides of the matter before reaching a decision. Nevertheless, he allowed the Committee to pose a few quick questions.

Discussion
A member stated that S 93 had not been referred to in the submission and that the provision had to be addressed. He said that the task of the Committee was to bring the ordinance into effect as of 1994. However, Dr White in his submission has addressed the property rating system and the problem with the actions of Cape Town. He emphasized that these issues were not on the table.

The Chair agreed. He said that 90% of the submission was irrelevant for the purposes of the issue on the table. He explained that even if Cape Town had not brought the matter to the Committee, the Committee would still have been obliged to deal with it.

The Chair explained that the department had informed the Committee that the Western Cape valuation ordinance had only become effective on 1 July 1994 whilst the Interim Constitution became operative on 27 April 1994. This meant that the Committee was seeking to give retrospective application to the ordinance in light of the Constitution in order to ensure the validity thereof. He noted that this was a purely technical amendment.

The Chair noted that the Committee was not subject to pressure from anyone. As such, he wanted to know what the Rates Action Group thought of the current amendment.

Dr White stated that the amendment was the Achilles' heel of Cape Town and not a technical amendment.

The Chair wanted to know why.

Dr White explained that the gap in the law was commonly known and that action was only taken against it when the group launched a court case in order to frustrate the actions of Cape Town City. He stated that this would not have been the case had public participation occurred.

The Chair took the answer to have been the fact that the constitutional drafters deliberately wanted to exclude the ordinances.

A colleague of Dr White responded that the public had never been given a right to address the contents of the ratings. As such, the PVO had been completely compromised. In addition, it would not be possible to validate the PVO retrospectively because a conceptual mess would be created. He stated that they were using 'hotch potch' legislation to pre-empt the property rates valuation. This meant that the validation would be wrong.

The Chair restated that problem and said that the group was concerned with the substance of the PVO. He wondered whether the Constitutional Assembly had deliberately chosen not to assign PVO in order to ensure the speedy introduction of the Property Rates Bill.

Ms Manche (DPLG Deputy Director General) made the following points:
- The Constitution made provision for national legislation which would eventually repeal the provincial ordinances. The point was that in Cape Town the provincial valuation ordinance would have to be relied on until the passing of national legislation. This meant that the three-month technical gap would have to be rectified.
- The Rates Action Group was therefore questioning the Structures Act and not the PVO.
- However, the Committee was dealing with the PVO and not the Structures Act.
Thus whilst she heard the arguments that had been made, she explained that the group had dealt with matters that the Committee was not concerned with at this point. She emphasized that the aim would be to validate the provincial ordinances.

The Chair added that when the Interim Constitution was adopted, the PVO was the least of their matters. The substance of the laws was not dealt with and it was simply adopted.

Mr Bouwer confirmed that to date only the technical interpretation had been recognized. However, this would have to be validated.

Mr Vincent (State Law Advisor) took the opportunity to assist the Committee. He explained that he worked for the Provincial Administration of Western Cape and that he had assisted the drafter of the PVO. He was prepared to go on record saying that they were dealing with a genuine oversight. As such, the error would have to be resolved because the PVO was effectively a dead letter.

The Chair noted that Mr Vincent agreed that they were dealing with a technical amendment.

Mr Smith (IFP) stated that the Rates Action Group was dissatisfied with the operations of Cape Town. However, he wanted to know what the group thought about the consequences of the gap in the law. He noted that the entire ratings since 1994 could be invalidated.

Dr White accepted the position. He pointed out that they did not want to take the matter to court. However, they wanted the matter to be put on hold and for negotiations to be carried out. He stated that the action would be withdrawn in that event. However, he stated that whether through the Achilles' heel or the Achilles' horn, the group would contest the actions of Cape Town.

Ms Borman commented that the current situation highlighted the problems in delaying the passing of the Bill. Whilst she sympathized with Dr White, she felt that the amendment would be the remedy. She asked the department whether there should have been a proper consultation.

Ms Manche responded that the Minister had formally written to the Financial and Fiscal Commission and to SALGA for responses.

The Chair added that the FFC had therefore also applied their minds to the matter, thereby going against what Dr White had asserted.

Mr Sithole wanted to know who the Rates Action Group was representing. In addition, he wanted to know whether they had engaged with other political parties.

The Chair commented that the group did appear to represent a significant number of ratepayers.

Dr White explained that they represented actual rate payers. In that regard, he referred to the Atlantic seaboard rate payers.

The Chair wanted to know how many members there were.

Dr White approximated the composition to 20 000.

The Chair wondered whether all 20 000 actually paid rates as the highest figure that he had ever known of was approximately 800.

A member wanted to know whether the group had engaged with the Cape Town Municipality.

Dr White responded that Cape Town would not allow the issues to be addressed and the Rates Action Group had been consciously denied the access to engage.

The Chair finally stated that in order to be fair, the group was dealing with a matter irrelevant to the proposed amendment.

The floor was then handed over to

Submission on behalf of Cape Town City
Mr Evans from Mallinicks Attorneys presented on behalf of the City of Cape Town. He began by explaining that his mandate called upon him to deal only with S 23.

The Chair noted that certain factual issues raised by the Rates Action Group would have to be understood.

Mr Evans said that although he was there on behalf of Cape Town City, he reflected the major interests of the Council. He stated that the issue had nothing to do with Cape Town and that it was for this very reason that the amendment would have to be made. He point out that the gap in the law had been found by Adv Vincent and that the Rates Action Group had not been frank with the Committee in that regard. He explained that Cape Town had been responsible in its dealings and it was accepted that they were dealing with the case of a complete legal oversight. He noted that the FFC supported the amendment saying that it was of a "legal and transitional nature". As such, he stated that S 229 (5) of the Constitution called for the amendment and said that Cape Town fully supported the endeavours in clause 23. He noted that should the Committee fail to pass the amendment, the court case to be heard on 11 November 2002 was likely to succeed. This meant that the amendment really was the 'Achilles' heel'.

Mr Evans thanked the Committee.

Discussion
The Chair commented that Adv Vincent was the man behind the discovery. He asked Mr Evans to comment on the allegations made by the Rates Action Group that the Council failed to invite public participation on the finalisation of the rates valuation policy.

Mr Evans responded that the Council did invite comments from the public, but however after its consultation it was decided that public comment would be received through the multi-party representation.

Ms R Southgate (ACDP) noted that multi-party representation does not amount to public participation. Mr P Smith (IFP) in agreeing with her noted that the difference between the two is that multi-party representation does not involve maximum participation of the public members.

The Chairperson commended the rate policy as a good one notwithstanding its failure to take into account the plight of the poor people. He thereafter said that it should be noted that the Committee does not condone the Council's failure to involve the public in this matter.

Ms Southgate requested clarity on paragraph 3.3 of the submission. She then asked the legal effect of the provision being applied retrospectively taking into account the fact that there is a court case pending against the Council on this same issue.

Mr Evans held that the Council's request for the inclusion of this provision is based on the fact that the old Provincial Ordinances do not provide a provision regarding property valuation. As such provincial governments do not have authority to deal with property valuations and that is why they are requesting the national government. He further held that based on his research after consulting numerous decisions on this issue he believes that the retrospective application of the provision would not present any legal problem especially in non-criminal matters.

Mr Smith asked the Department to comment on the retrospective application of the rates provision.

Dr P Bouwer (DPLG Director of Legal Services) held that the Department did made a considerable consultation on this issue and it therefore believes that the retrospective application of the provision is necessary.

The Chairperson noted that even though the Committee sympathises with the Rates Action Group, its submission is only informative and not relevant to the amendment of the Bill. He requested RAG to withdraw the case proceedings since it would be very costly to take its matter to the Constitutional Court. He requested the two parties to sit down and come up with a workable solution.

Mr D White (RAG) held that his organisation appreciates the Committee's commitment but it would not stop its proceedings since that is their responsibility to their constituency, who pay enormous rates in the Cape Municipality. However he said RAG is willing to sit down with the Council provided it came up with a proper solution.

Mr Evans held that the Council is always willing to sit down and consider any progressive solution since it does not consider court proceedings as useful tools in resolving a difference.

Deliberations on the Bill
The Committee accepted the amendments to the Acts in Clauses 1 and 2.

The DP and IFP expressed concerns on remuneration of public office bearers in Clause 3 and felt that they should be regulated by the Remuneration of Public Office Bearers Act.

Ms J Manche (DPLG Deputy Director General) held that the old Provincial Ordinances are still having an impact on the System Act - and the result is that it is not possible to use a national Act to amend them. Due to that fact it is necessity to consult with the different provinces so that they can be able to make those necessary recommendations.

Ms G Borman (DP) further asked why there are differences between the executive mayor and the mayor remuneration.

Ms Manche held that the difference between the two is based on their duties and as such the executive mayors have duties huger than ordinary mayors, which should be appreciated.

The Chairperson noted the Committee's unhappiness with the use of different ordinances, which are not governed by the Remuneration of Public Office Bearers Act, to remunerate the public office bearers. He said - based on that - the Committee provisionally accepted the amendments to the Act in Clause 3. He requested the Department to consider all the technicalities involved in the matter and consult where necessary and thereafter report back to the Committee.

Clauses 4-9 were deferred for later discussion.

The Committee accepted the amendments to the Municipal Structures Act in Clause 10.

Mr Smith asked the reason for differentiating between part-time and full-time councillors in Clause 11.

Ms Manche held that without such differentiation there would be a conflict of interest, hence one no one serving as a full-time councillor should be allowed to be employed full-time in the municipality.

Ms G Borman requested that Clause 11 be deferred for later discussion as she need to consult with her party on this provision.

Clauses 12 was also deferred for later discussion.

The Committee accepted the amendments to the Municipal Structures Act in Clause 13.

Mr Smith requested Clause 14 to be a general provision and the following amendment be inserted: "If the mayor is absent or not available and the municipality does not have a deputy mayor or the deputy mayor is absent or not available -…"

The Committee accepted Mr Smith's proposal.

The Committee accepted the amendments to the Municipal Structures Act in Clause 15(a), but deferred the one proposed in Clause 15(b) for later discussion.

The Committee accepted the amendments to the Act in Clauses 16 and 17.

The Committee accepted Clauses 18 with amendments.

The Committee accepted the amendments to the Act in Clause 19.

The Committee rejected the amendment to the Act in Clause 20.

There was consensus amongst the members that the amendments to the Acts in Clauses 21-33 be accepted.

The meeting was adjourned.

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