Local Government Laws Amendment Bill: briefing

Meeting report

LOCAL GOVERNMENT & ADMINISTRATION SELECT COMMITTEE
28 October 2002
LOCAL GOVERNMENT LAWS AMENDMENT BILL: BRIEFING

Chairperson: Mr B J Mkhaliphi (ANC) [Mpumalanga]

Relevant documents
Local Government Laws Amendment Bill Proposed Amendments
Addendum to Local Government Laws Amendment Bill Proposed Amendments (Appendix 1)
Report by the Portfolio Committee on Local Government and Administration on B61 (Appendix 2)
Local Government Law Amendment Bill [B61-2002] (as tabled)
Local Government Law Amendment Bill [B61b-2002]

SUMMARY
The briefing by the Department provided Members with an overview of the Bill and the need for its enactment, the Committee was then led on a clause-by-clause explanation of each provision. The three major non-technical amendments in Clauses 1, 19 and 21 were highlighted.

The discussion on the briefing raised concern with Clause 21(8) and the interpretation of a 1962 Free State Ordinance that allows the municipality to impose tariffs on farmlands as well. Clarity was sought on the implications of Clause 25 not being complied with and whether the legal representative appointed via Clause 43(a) would be held liable for the costs incurred by the litigation.

MINUTES
Briefing by the Department
Dr Petra Bouwer, Director: Legal Services in the Department of Provincial & Local Government presented an overview of the Bill and the need for its enactment, and led Members through a clause-by-clause breakdown of the Bill.

The new local government dispensation implemented from 5 December 2000 has been experiencing growing pains and there are definite areas for improvement. This has resulted in this Bill taking the form of an "omnibus". It seeks to amend the following laws via largely technical amendments aimed at maintaining the integrity of the text. The Local Government Act, the Remuneration of Public Office Bearers Act, the Municipal Structures Act, the Municipal Systems Act and the Municipal Structures Amendment Act. The last mentioned Act is important because it created a transitional period to facilitate transformation in local government.

As mentioned earlier, the Bill consists largely of technical amendments, save for the following three areas. Firstly, the Municipal Structures Amendment Bill will lapse on 5 December 2002, with the result that the interim allocations between the provincial and local spheres will also lapse. The effect of this is that the Minister of Provincial and Local Government (the Minister) will have to amend the budget in the middle of the year. This would clearly be too disruptive and it was decided to change this date to 13 June 2003. This is one of the more important amendments in the Bill.

The second non-technical amendment is linked to the first and deals with the further regulation of the powers of the Minister to deal with consequences that resulted in the changing of powers of the municipal system. This is done by amending Section 84 of the Municipal Structures Act, in which the powers of the district municipality are set out. The remainder of the powers are left to the local municipality. This amendment allows the Minister to devise regulations dealing with water, sanitation, electricity and health within the municipality, and the MEC would then have the power to make adjustments to matters other than those four. The amendment also allows the Minister to withdraw the regulation to address such consequences.

The third non-technical amendment deals with the validation of the 1993 Cape Property Valuation Ordinance. This is an important amendment because the National Assembly has passed a resolution that this problem has to be attended to, as it affects the Northern Cape, Eastern Cape and Northern Province.

Clause 1
This amendment is important because the present Organised Local Government Act does not reflect the new Constitutional dispensation, but instead still reflects the transitional Constitutional arrangements. This has to be brought up to speed, because those provisions are no longer needed and have to be repealed.

Clause 2
This amendment has to be effected because the current Afrikaans wording of the Remuneration of Public Office Bearers Act translates "Despite" in the English text to mean "not withstanding", whereas the actual intention of the phrase is to mean "Subject to". This thus has to be changed for clarity.

Clause 3
This amendment seeks to validate the circulars released by Western Cape and Gauteng MEC's that regulated the salaries of members of their municipal councils in terms of the Remuneration of Public Office Bearers Act. Should these circulars not be deemed valid, the salaries would amount to unauthorised expenditure.

Clause 4
This clause contains largely technical amendments and the request of the Demarcation Board, and is a good example of the nature of the Bill as a whole that seeks to correct previous technical inconsistencies.

Clause 5
This amendment was introduced at the request of the Demarcation Board who informed the Portfolio Committee on Provincial and Local Government (the Portfolio Committee) that it has been receiving requests from the public for advice on matters related to demarcation. As the Demarcation Act only currently provides that the Demarcation Board is authorised to demarcate municipal boundaries, this amendment would now grant them the power to dispense such advice related to the business of that body.

Clause 6
This amendment reflects a policy aspect, as it was proposed that the current number of board members from fifteen to ten. The reason for this proposal is that the work done by the Demarcation Board has decreased since its large task in 2000.

Clause 7
This amendment clarifies the role of the Minister in finalising the shortlisted council candidates, which then has to be handed over to the President for final approval.

Clause 8
This amendment deals with the adjustments that need to be effected after a municipality has been demarcated. It is aimed at ensuring unity in the community by providing that if all the municipalities affected agree to the redetermination, the Section 26 procedure in the Demarcation Act does not have to be complied with. The amendment further provides that the redetermination would still have to be republished via Section 21 of the Demarcation Act, the public could then still object to the proposed redetermination, and these comments would have to be considered. Thus, even if all agree, those who do not agree with the redetermination would not be without recourse.

Clause 9
The original version of Section 22 of the Demarcation Act made sense with regard to wholesale demarcation, and this amendment now does away with the obligatory nature of the power granted to the Minister to determine reasonable time-frames and priorities for determination. It now grants the Minister a discretion to make such redetermination after consultation with the MEC, and the phrase "in consultation" in the present Act has now been deleted. The proposed Subclause 4 provides that the board of the municipality does not have to consult those persons and institutions already consulted under the proposed Subclause 3(b).

Clause 10
This merely contains a consequential amendment.

Clause 11
This is a technical amendment to correct the Afrikaans wording of the Local Government Municipal Structures Act.

Clause 12
This amendment provides that the exemption of a member from Section 21 of the Municipal Structures Act will lapse once that member becomes a full-time councillor.

Clause 13
This deals with the situation in which the MEC dissolves the municipal council in terms of Section 159 of the Constitution, and does not deal with the dissolution initiated by the council itself.

Clause 14
This amendment is merely consequential.

Clause 15
This amendment allows for the appointment of an acting mayor, as proposed by the Portfolio Committee, because the current Section 49 of the Municipal Structures Act does not provide for this position where a deputy mayor has not been appointed.

Clause 16
These are consequential amendments to the Municipal Structures Act.

Clause 17
This amendment corrects a typographical error in the Afrikaans wording of the text of the Municipal Structures Act.

Clause 18
This amendment also aims to correct a typographical error in that Act to allow traditional leaders to now be compensated for put of pocket expenses.

Clause 19
This amendment grants the Minister the power to not only amend technical matters and consequences, but also grants a general power to "regulate the legal, practical and other consequences of such amendment". The proposed Subclause (c) of the amendment then spells out these consequences, whereas these are not laid out in the present provision. The Portfolio Committee decided that the consultation process would have to be made compulsory here as well, because the provision could have far-reaching effects on matters such as the transfer of personnel, contracts and obligations etc.

Clause 20
This amendment aims to maintain the integrity of the text by reflecting the 2000 amendments.

Clause 21
This is an important clause because it deals with the Cape Property Valuation Ordinance 9 (the Ordinance) which was enacted in 1993, but because it affected the budget the Ordinance itself only came into effect on 1 July 1994 to coincide with the next financial year. Yet on 27 April 1994 the Interim Constitution came into operation and kept in place laws and provisions that were in effect before its enactment. Although the Ordinance was a valid law, it had not yet come into effect by that time, and the Cape Province then asked the Department to assist it by effecting these amendments. One of these amendments amends the definition of "local authority" to refer to the interim structure, and also locked the application of the Ordinance into it.

The Department wanted to effect further amendments as well so that the Ordinance would escape Constitutional challenges and only in May 2002 was it discovered that the Ordinance is not kept alive by the Interim Constitution, and this proposed amendment now seeks to keep it alive. Dr Bouwer stated that he had mentioned during the deliberations by the Portfolio Committee that the courts could interpret this in a non-purpose orientated intention, and the proposed amendment provides that the Ordinance is deemed to have been kept in place by Section 229 of the Interim Constitution.

The proposed Subclause 8(a) of the amendment renders the Ordinance operational from 27 April 1994, and Subclause 8(b) includes all new municipal entities which are not included in the current Section 93 of the Municipal Structures Act.

Clauses 22 to 26
These amendments are aimed at clarifying matters.

Clauses 27 to 31
These amendments are consequential in nature.

Clause 32
This amendment is aimed at clarifying matters.

Clause 33
This amendment corrects a typographical error in the Afrikaans version of Schedule 2 of the Municipal Structures Act.

Clause 34
This amendment provides that the candidate that will hold the office will be determined by a lot, should the two candidates receive the same number of votes.

Clause 35
This amendment has been included because the Portfolio Committee proposed that the term "municipal service" be removed, and the High Court has defined it to refer only to a service that impacts tariffs. This case has been taken on appeal.

Clause 36
This amendment was proposed by the Portfolio Committee and allows the Minister to approve any sub-delegation, because the current provision grants this power to the MEC.

Clause 37
This amendment is aimed at altering the appeal procedure.

Clause 38
This amendment seeks to ensure a better developed system of administration.

Clause 39
This amendment provides for the general power of a municipality to levy fees and tariffs, and sets out the procedure and requirements in this regard.

Clause 40
This is a consequential amendment.

Clause 41
This amendment alters Section 77 of the Municipal Systems Act by now requiring the municipality to review both internal and external mechanisms through which municipal services are provided.

Clause 42
This amendment requires the Minister, after consultation with the Minister of Finance, to devise regulations or guidelines because the matters dealt with could have sectoral impact, and thus that particular Cabinet member has to be consulted.

Clause 43
This amendment aims to clarify matters by providing legal representation for councillors for acts committed during in the scope of doing their business.

Clause 44
This amendment does not contain any substantive changes, but merely clarifies the role played by the Registrar of Deeds here. The proposed Subparagraph (b)(1A) provides that a clearance certificate would be valid for a period of 120 days when an amount naturally becomes due. This arose from the difficulties encountered by the Department of Housing in transferring the RDP houses, and it requested assistance from the State in collecting the amount outstanding. That Department proposed that those first-time house owners be exempted, and the provision now reads that a clearance certificate is not needed.

The proviso contained in the proposed Subclause 4 provides that the municipality can still take legal steps to recover these funds from first-time home owners, but it would only be allowed to do this with regard to debts accumulated two years before the transfer of the property.

Clause 45
This amendment clarifies the fact that a councillor may not be in arrears with the payment of his/her municipal rates for a period longer than three months.

Clause 46
This amendment provides that the provinces may also draft legislation here.

Clause 47
This amendment provides that the transitional period is now extended to the end of the financial year.

Clause 48
This amendment repeals specific provisions dealing with clearance certificates under the current legislation contained in the Schedule of the Bill, and the National Assembly asked whether it is authorised to repeal those laws because they include matters of provincial competence. It was informed that it would be possible to do so.

Discussion
Kgoshi M Mokoena (ANC) [Limpopo] referred to the clause dealing with the board, and asked whether board members will in fact consider the public comments on the deemed demarcation.

Dr Bouwer responded that this matter was discussed at length and the Demarcation Board drafted a provision that placed a significant burden on the individual, and it is difficult for anyone other than an association or institution to put this before the board. This matter was then settled and the provision was amended to allow any individual to approach the board with regard to the boundary demarcation.

Secondly, Kgoshi Mokoena sought clarity on the precise meaning of the phrase "out of pocket expenses".

Dr Bouwer replied that this refers to actual expenses and does not refer to allowances. This is an accepted legal term, and makes it clear that the municipality would have to pay these expenses, as the provincial government is responsible for paying the actual salary.

Ms C Botha (DP) [Free State] asked for the reason for the inclusion of the phrase "one or more administrators" in Clause 13.

Dr Bouwer responded that this is wide enough to enable the Department to cover all its bases, because a situation could arise in which a team of councillors could be needed to address a specific matter.

Ms Botha asked whether it has ever been necessary to send in more than one councillor.

Ms Jackie Manche, the Deputy Director-General (DDG), replied that this has not occurred in the past but it could possibly occur in future, and the amendment is aimed at accommodating this possibility.

Dr Bouwer added that Section 159 of the Constitution could still be relied on. No South African municipality has to date initiated its own dissolution.

The Chair suggested that the concern has always been that if only one councillor is relied on, this could lead to some sort of bias, and for this reason the inclusion of "one or more administrators" is welcomed because it strikes an important balance here.

Secondly, Ms Botha referred to the clause that reduces the number of board councillors, but this amendment could mean that municipalities could "lose out on provincial representation".

Dr Bouwer replied that even with the current setting there are measures in place to provide this, and thus the clause is not really necessary. Yet the Demarcation Board contended that when the number of members of the council are decided, it wanted provincial representation at this level as well. But this number was originally larger because groundwork needed to be done, but now that this has been done it is proposed that the number be reduced because that many members are no longer needed. There are councillors at provincial and MEC level, and the current amount is therefore not necessary.

Thirdly, Ms Botha referred to Clause 21(8) and informed Members that Free State municipalities are relying on a 1962 Ordinance which provides that the municipality may impose charges and levy rates and taxes on property within its jurisdiction, to now impose such levies on farmlands as well. Those municipalities argue that "municipality" includes farmlands, yet those farmers are contending that the original intention of that Ordinance was never to include farmlands. What is the actual interpretation of that term?

Dr Bouwer replied that this is an important matter. It has to be noted that the current setup allows for wall-to-wall municipalities, and it therefore has jurisdiction over property that falls outside its boundaries. Should the property fall within its jurisdiction the municipality would have the necessary jurisdiction to impose levies and creates taxes, and can impose these on either the land or on both the land and the improvements made, but the base would have to be uniform. The municipality's power to do this derives from the Constitution itself, and states categorically that the municipality must have wall-to-wall property, but because there is currently no national legislation specifically addressing the concern raised by Ms Botha, the municipality is able to rely successfully on the old 1962 Ordinance.

Fourthly, Ms Botha referred to Clause 25 and asked what would happen should the municipal manager not inform the chief electoral officer, and this is important because it could affect the election.

Ms Manche responded that this amendment was proposed by the IEC, as it contended that it was not being informed of changes being effected "on the ground". This proposed amendment then requires the municipal manager to inform the IEC, because it currently operates in a vacuum here and this in turn "makes the IEC's life difficult".

Dr Bouwer added that this effectively creates two levels of management because the municipal management would be held accountable if they did not act in accordance with their contract, and an external mechanism is now also introduced to enforce compliance.

Fifthly, Ms Botha contended that she was under the impression that the word "supplement" in Clause 26 means the same as "increase", because the former seems to include the latter.

Dr Bouwer replied that this reflects the current wording in the Act and is aimed at covering all possibilities, so that the Department can cover all its bases.

Ms Botha asked who would have to be informed of any changes.

Ms Manche replied that the chief electoral officer would have to be informed because s/he "would have to do the necessary", as s/he manages the process.

The Chair asked who would have to be notified should the municipal manager also be involved as the chief electoral officer.

Dr Bouwer responded that there can only be one chief electoral officer and therefore the electoral officer at municipal level cannot be a manager, and management in Pretoria would then still have to be informed.

Ms Botha referred to Clause 43(a) and the possible situation in which a councillor or employee could be found guilty and damages are awarded for negligence, and asked whether the legal representative would be held liable for the costs incurred.

Dr Bouwer replied that there is a distinction between private and criminal law, and this clause deals with private law and the awarding of damages when the employer is held vicariously liable for the actions of the councillor or employee. Here the employer would be cited as the first respondent in the litigation proceedings, and the individual councillor would be sued as the second respondent. In practice the criminal aspect would be pursued when a claim for damages has already been awarded, and this clause envisages that at the institution of criminal proceedings is the councillor now able to acquire legal representation. This is confirmed by the references to an inquiry or inquest in the proposed paragraph (b) of the amendment.

Furthermore, Ms Botha asked what steps would be taken in Clause 45 should the councillor in fact be in arrears.

Dr Bouwer responded that this is included as part of the Code of Conduct, and it could even provide for the councillor to be expelled. An example is contained in Item 14 of the Code of Conduct.

Kgoshi Mokoena asked whether the phrase "any act' in Clause 43 amounts to a "blank cheque", and asked for clarity on the situation should the councillor act in good faith. Would s/he still be held liable here?

Dr Bouwer replied that the provision does not mean "any act" but limits the acts to those committed during the scope of the councillor's duty. This is a very well developed area of South African law, and there are several rules applicable here which the courts do interpret.

The meeting was adjourned.

Appendix 1:
Addendum to proposed amendments
CLAUSE 14

1. On page 8, from line 33, to omit subsection (3) and to substitute:
(3) If the mayor is absent or not available and the municipality does not have a

deputy mayor, or the deputy mayor is also absent or not available -

(a) the member of the executive committee designated thereto in writing by the mayor acts as mayor; or

(b) a councillor elected by the members of the executive committee from amongst themselves acts as mayor if the mayor has not designated a member thereto or if the designated member is absent or not available.".

CLAUSE 15

1. On page 8, from line 46, to omit subsection (7), and to substitute:

'(7) If the executive mayor is absent or not available and the municipality does not have a deputy executive mayor, or the deputy executive mayor is also absent or not available, the council must designate a councillor to act as executive mayor.

LONG TITLE

1. On page 2, in the fifth line, after "technical corrections;" to insert the following:

to further regulate the functions and the work programme of the Board;

2. On page 2, from the eleventh line, to omit "where a particular municipality does not have a deputy mayor or a deputy executive mayor".

3. On page 2, in the sixteenth line, after "certain power", to insert the following:

to validate the Property Valuation Ordinance, 1993 (Cape), and provide for other technical arrangements connected thereto;