Local Government Laws Amendment Bill: briefing

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
25 September 2002
OMNIBUS BILL TO AMEND LOCAL GOVERNMENT ACTS: BRIEFING

Chairperson: Mr Y Carrim

Documents handed out:
Bill to Amend Local Government Acts
Powerpoint presentation on the Bill
Local Government Municipal System Act, 2000
Local Government: Municipal Demarcation Act, 2000
Remuneration of Public Offices Bearers Act, 1998
Local Government: Municipal Structures Amendment Act, 2000
Local Government: Municipal Structures Act,1998
For the above legislation, go to Acts

In attendance:
Portfolio Committee members: ANC: Rev Goosen, Mr Lyle, Mr Nobunga, Mr Nonkanyana, Mr Ngubeni, Mr Solo, Mr Mshudulu; DP: Mr Grobler; IFP: Mr P Smith; NNP: Mr P Uys
SALGA: Mr Johan Mettler, Mr Theo Tuswa, Mr M Sonjica
Department of Prov. and Local Government: Ms Jacky Manche, Dr. Petra Bouwer, Adv Kholong
City of Cape Town: Mr Mike Evans
Rates Action Group: Mr D White, Derek Uys & Associates

SUMMARY
Although this omnibus Bill is not yet formally tabled, it has been approved by Cabinet. It has amendments to six Acts dealing with local government issues. There was a briefing by the Department. Because parliament rises on 15 Nov 02, there has been discussion on extending this period by one week. The Bill has to be passed by this Committee by the 25 October. However the Chair assured members that the Bill would not be rushed and that it may be split to meet the deadline - with the serious matters being given priority. If there is no reasonable understanding of the Bill before the deadline, then those clauses will be rejected and re-addressed next year. 90% of the Bill is technical and the Chair is certain that a substantial amount of the Bill will be passed by 25 October 2002.

MINUTES
The Chair commented that he did not think that there would be much interest in the Bill by parties other than SALGA. He insisted that this Bill would not be rushed. He apologised to Derek Uys and his associates who are affected only by clause 23; since this would be a clause-by-clause discussion and so much of their time would be wasted.

Ms Ms Jacky Manche, representing the Department of Provincial and Local Government explained the necessity of the Bill. She noted that there is a need for the Bill due to the problems that have arisen since the Dec 2000 municipal elections. These problems emanate from deficiencies in various local government laws. Some of these issues are serious and hamper effective functioning of municipalities. As a result the Department has drafted an omnibus Bill which includes amendments to a number of statutes.

The Bill has 7 chapters:
· Amendment of Organised Local Government Act, 1997
· Amendment of Remuneration of Public Office Bearers Act, 1998
· Amendment of Municipal Demarcation Act, 1998
· Amendment of Municipal Structures Act, 1998
· Amendment of Municipal Systems Act, 2000
· Amendment of Municipal Structures Amendment Act, 2000
· Miscellaneous matters
· Schedule

The Chair commented that the seriousness of the Bill had been exaggerated and that to say that "some issues are serious and hamper the effective functioning of municipalities is melodramatic".

Mr Uys of the NNP wanted a discussion of the Bill according to clauses of priority, but it was decided to approach it from beginning to end as this was a first briefing. It was agreed that the more serious issues would be returned to on 15 October. The Chair indicated that the content of the Bill could not be deliberated on until after public hearings had first taken place.

Dr. Bouwer from the Department gave a clause-by-clause briefing:
Clause 2(a): the Department said that "despite" hampers the Minister with regard to district councilors and therefore they are returning to "subject to". All agreed
2(b) The Amendment of Remuneration of Public Office Bearers Act - the amendment authorises the expenditure by the Gauteng and W Cape on councilor allowances, that were legally paid in 1998/99 were it not for being done ultra vires the Act (cl 2).

Mr Smith (IFP) wanted to know why there was a post facto legalizing of these payments. He noted that the wording made it seem that all the payments which had taken place during 1998/99 were irregular. The question was then raised whether this clause would affect those councilors who were overpaid and instructed to make paybacks. Ms Manche responded that it would not affect such councilors and that the clause is only an attempt at making the payments regular. Mr Smith raised his concern that such a retrospective, validation-of-payments clause could be used in the future by municipal managers who are paying themselves, to validate overpayments and allowances. The Chair said that it was not fair to raise this legitimate concern at the briefing meeting. The issue should be raised again, but for now it is a separate issue and short of a constitutional change nothing could be done.

Clause 3 provisions relate to the Amendment of Municipal Demarcation Act: there are technical amendments to definitions:
3 (a) no problems raised in the discussion; informal agreement to envisaged name change
3 (b) passive voice provided for; no opposition from the Committee
3 (c) reference to "36" was wrong, so replaced with correct 34(1)
3 (d) wrong reference to s41, so replaced with correct reference s42

Clause 4 decrease in number of board members
It proposes an outer limit being reduced from 15 to 10 members. Dr. Bouwer noted that the Municipal Demarcation Board had proposed these amendments.

Mr Smith said that this was unnecessary because the minimum number had been established already. The Chair agreed with Mr Smith's point but pointed out that more was being communicated through this clause - that the work of the board members is so advanced that it was trying to say that it does not need more than 10 members.

Clauses 5, 6 and 8 deal with the streamlining of processes.
The Chair indicated that clause 5 was slightly redundant as short lists are already routed to the President as set out in clause 5, but he was happy to keep the clause; clause 6 deals with objections and he found this clause essential.

Dr. Bouwer said Clause 8 was to put matters in a cyclical order. Mr Smith asked whether "determination" referred to before or after objections are considered. The Chair seemed sympathetic to Department when he said that it is the way the law is written which gives rise to a question like Mr Smith's.

Dr. Bouwer said that clause 8 comes from lessons learnt from the Hartebeespoort case. The Chair said that he was not familiar with the case, but that he thought clause 8 was fine and that Mr Smith could raise his objections to it at a later date, if he still had any.

Clause 7 deals with amendments to Work Programme. The reason given for this amendment was "to expedite matters".

Mr Smith wanted to know what the problem was with the status quo, and he could not understand what the problem was. The Department's motivation did not explain the change in words. Dr. Bouwer said that it was purely a demarcation issue and that time frames were now discretionary.

Clause 9 brings the Afrikaans text in line with the English - the Afrikaans text had been compromised when the Xhosa translation of the schedule was done. The Chair asked Rev Goosen to verify the Afrikaans outside the meeting.

Clause 10, 11, 13, 14, 19, 22, 24, 27, 28, 32, 33, 38 all deal with bringing the Afrikaans translation in line with the English text.

Clause 12 is the new amendment of s21(2)
The Chair felt that it was obvious that if one was a full-time councilor that one could not be employed elsewhere. Dr Bouwer said that the clause provides clarity.

Mr Mshudulu and Mr Uys raised various problems with this clause. Mr Uys could not see how this clause would be practically implemented and he gave the example of a councilor who may also be a doctor in a remote, small town, where he provides essential medical services.

The Chair said that they would have to investigate exactly how big this problem is and that such investigation and discussions would have to take place outside of meetings. This clause was therefore put on hold.

Clause 15 is meant to clarify the uncertainty around the basis for "dissolution" and it should be read with a cross-reference to s139 because the "dissolution" is linked to the reason given there. Dr Bouwer added that if a municipality dissolves itself, there would have to be a hearing and that the clause has to tie in with the Constitution.

The Chair thought the clause was fine, but that other types of "dissolution" should be able to tie in under this clause.

Clause 17 and 18 amend the Municipal Structures Act and make provision for appointing acting mayors where no deputy mayors are provided for.

The Chair thought the clause was fine, but he did not see the need for it. Mr Uys and the Chair wanted to know why Clauses 17 and 18 duplicate each other. Mr Smith raised the issue that the wording excludes the situation where if there is a deputy mayor who is also not available, an acting mayor could then not be appointed. Ms Manche agreed that there was a problem with the drafting language. The Chair asked that the matter be addressed.

According to the Chair there is no consistency in clause 18. Dr Bouwer argued that the clause is about arranging the processes of the mayor who holds one office within a collective, executive system. The Chair was not convinced with this argument and said that the matter would be discussed more carefully during deliberations.

Clause 20
20(a) relates to the Afrikaans issue.
20(b) makes provision for out of pocket expenses for traditional leaders.
The Chair thought that "out of pocket" should be hyphenated but agreed to it when Dr Bouwer pointed out that he got the spelling from another Act. The Chair felt the clause was unnecessary because these costs are paid for. Dr Bouwer said that the clause stems from the need to identify who pays the expenses. Mr Smith said that the council is already paying these expenses. The Chair said that the clause should be left as it is.

Clause 21 amends section 84 of Act 117 of 1998, as amended by section 6 of Act 33 of 2000. The clause amends the provision pertaining to the authorisation notices. The amendment clarifies the revocation and regulation powers of the Minister.

21(a) relates to the Afrikaans issue
21(b) replaces the whole of (c) and this gives the Minister power to amend a notice without limitation. The Chair thought it was fine, but would be looked at again.
21(c) discusses the Minister's handling of the consequences that arise through his revocation of notices.
Mr Smith asked whether the revocation required any consultation process and whether it was built into the amendment. Smith thought that "authorization" came with a consultation process, but that "revocation" did not. Ms Manche said that it did. Dr Bouwer added that in the clause itself it does not make provision for a consultation before the Minister revokes a notice. He said that the heading of the section ensures that the minister would have to consult with others before he can revoke a notice and that for practical reasons only this wording was not repeated in the clause itself. The Chair felt that the clause should be reworded, but the issue was deferred until the next meeting.

Clause 23 amends the Municipal Structures Act. The amendment provides certainty regarding the validity of the Cape Valuation Ordinance. Valuations in terms of the Ordinance are challenged and Parliament adopted a resolution to adopt legislative measures.
23(7) has the effect of making the ordinance subject to s229 of the Constitution. Because of the wording of the interim constitution, " … all existing law continues to be law" it could not breathe life into the Property Valuation Ordinance because it was not a law at the time of the interim constitution.
23(8) continues the effect of (7). It attempts to create certainty and to address the definition in the old ordinance. Mr Smith had a problem with "similar designation" - was it sufficiently generic to cover new names given to old institutions. Dr Bouwer said that when he drafted the amendment he was comfortable that everything was covered. The Chair asked that "designation" be replaced with a more useful term. Mr Uys thought that 8(b) should be omitted in case it nullifies 8(a). Dr Bouwer said that if 8(b) is excluded then life may be given to old ordinances and that is not the purpose here. He has also received confirmation from other lawyers that it is being read the way he intended. Mr Uys noted that there was a case running at the moment which may be affected or may affect this amendment, so could the Act become applicable retrospectively. Dr Bouwer asked that he be given more time to investigate this question on a technical level. He said that there is an existing Cape High Court judgement which has a bearing on this amendment and that those consequences need to be taken into consideration too. Mr Uys wanted to know whether the jurisdiction of the Cape High Court included the Northern Cape and Eastern Cape. Dr Bouwer said that he would have to investigate that before answering. Mr Smith said that these are foundational questions to furthering the drafting. Dr Bouwer should already have these answers. This issue will be discussed in more detail after Dr Bouwer has done the necessary investigation.

Clause 25 deals with the Amendment of Municipal Structures Act. There are technical amendments including corrections to Afrikaans text, consequential amendments and technical amendments to election provisions as requested by IEC and provision for uncontested ward elections. The amendment says that there is no election necessary when there is a single, uncontested, ward candidate, but the problem with this is that all votes count towards the party as well and if there is no election then the party loses out because these votes are not counted. The Chair noted the concern and said that it would be addressed later.

Clause 26 Dr Bouwer said that this clause was requested by the IEC. The Chair said that he would check it again, but for the moment the clause seemed fine.

Clause 29
29(a) all agreed that it was fine
29(b) ensures that the IEC is informed of such councilor vacancies. Uys asked whether this clause was necessary or whether it was there because the IEC has a problem with their interpretation. Smith replied that this clause is necessary so that the local people are forced to inform head office of the vacancies, because there have been times in the past when they have not.

Clause 30 Dr Bouwer said this is 21days after the person ceases to be a member and not just 21 days. Smith said that there does not seem to be a link between Clauses 30 and 29. Dr Bouwer agreed and said that it was an indirect link. Mr Uys said with this amendment it seems that the municipality is bound by 21 days and that it does not make room for an appointment at an earlier stage before the 21 days are up.

Clause 31
31(a) deals with the Afrikaans issue
31(b) defines independent ward councilor and the Chair wanted to know why this definition was necessary. Chair wanted to know if the definition should be put into schedule 2. Uys and Bouwer have to investigate this issue and report back at the next meeting.

Clause 34 and 35 are similar to clause 31 and there was no further discussion.
Clause 36 was accepted.
Clause 37 is a further deadlock breaking mechanism where the surpluses were equal. The Chair said that it was fine, but did not think that such a clause was necessary as a similar provision appears in the law.
Clause 40 was added at the behest of the Department of Water Affairs (DWAF). Water affairs found that it was appropriate to have a definition because the court had found "municipal services" to mean that it was only a service where a tariff was received in return for the service provided. The Chair asked that Bouwer ring Barbara Hogan (Chairperson of Finance Portfolio Committee) re this definition and he said that it was a matter they would return to. Bouwer said that it was necessary to define "municipal services" as more than just a service where a tariff is charged. Bouwer said that a distinction has to be drawn between "provisioning administration" and "provision of municipal services".
Clause 40(b) to make clear what property is. Amendment of Municipal Systems Act: definitions dealt with here. Smith was not happy with this and wanted to know if things like "usufruct and or lease" were included here. This matter will be returned to.
Clause 41 deals with appeals and makes provision for other appropriate appeal procedures.
Clause 42 - the Chair asked why they were changing the Employment Equity Act and Ms Manche said that it was in order to include broader agreements.
Clause 43 is an amendment to regulate the process related to municipalities' power to levy fees, charges and tariffs. The Chair asked why they wanted a general power to incur levies. Bowers said that the clause was necessary to regulate the process where they want to levy and recover fees. The Chair said that the substance seemed ok, but that he would look into it again.
Clause 44 is to be rectified.
Clause 45 amendments to streamline review of service provision mechanisms [request from DWAF]
Clause 46 requested by the DWAF.
Clause 47 Amendment of Municipal Systems Act- there are amendments re legal representation of employees of municipality. Various issues were raised here. One in particular was that of vicarious liability. Uys also wanted to know why "councilor" could not be added here. It was decided that the clause would need further discussion at a later date.
Clause 48 was a problematic clause for Uys and Smith because the custody of documents is not necessarily something that can be delegated. Bouwer said that it may be possible to omit the whole clause, but that he would need to look into the matter first. Chair said that he has no strong views on the matter, but he does not think that the clause is needed.
Clause 49 Re the Amendment of Municipal Systems Act - Section 118: Amendment of provision relating to transfer of properties so that it is in line with the Registrar of Deeds' requirements. Exemption from rates clearance certificates for first time buyers of property financed by state was addressed and this exemption is also applicable to conversion of land tenure rights into ownership.
Clause 49
49(1) rationalizes the Deeds Act and it is made applicable to every transfer of property
Subsection 1A (4)(b) relates to municipal service fees and not rates. The Chair asked that the Department find out more about this and he will call party leaders re this issue. Before this amendment it seems that government cannot get clearance certificates to transfer ownership of properties because of unpaid rates. Unpaid rates which the government is hard pressed to pay because firstly it is not government's debt (previous occupiers should have paid) and secondly because they do not have the funds to pay.
The issue of 99 year leasehold and PTO's (permission to occupy) and other types of "ownership" also raised and will be addressed at a later date.
Clause 50 deals with amendment to code of conduct for councilors- arrears. The clause is agreed on for the time being, although the Chair added that he was not sure that the clause was constitutionally sound and therefore they would have to come back to it.
Clause 51 was agreed to as sound.
Clause 52 Re the Amendment of Municipal Structures Amendment Act- the amendment relates to the extension of the transitional period until end of June 2003 to ensure continuity for purposes of authorized powers and functions until end of municipal financial year.
Clause 53 has removed s15. The Chair asked why. Bowers responded that he was so advised by his ex-colleague, Mr Fanie Louw (whose replacement is Adv S. Kholong ) The Chair said that this was a weak argument and that the Department should go back and do their homework and get back to the committee on this issue.
Clause 54 was fine.

The Schedule repeals provincial legislation pertaining to registration of properties and clearance certificates, in view of Systems Act provision (Section 118) - creating legal certainty. The Chair added that he did not understand all these schedules, but the matter would also be addressed at a later date.