Municipal Structures Second Amendment Bill; Division of Powers and Functions; Reconstitution of Municipal Councils: briefing; Co

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Cooperative Governance and Traditional Affairs

29 October 2002
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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
29 October 2002
MUNICIPAL STRUCTURES SECOND AMENDMENT BILL; DIVISION OF POWERS AND FUNCTIONS; RECONSTITUTION OF MUNICIPAL COUNCILS: BRIEFING; COMMITTEE REPORTS ON WOMEN IN LOCAL GOVERNMENT & DISASTER MANAGEMENT CONFERENCES

Chairperson: Mr Y I Carrim (ANC)

Documents handed out:
Draft Municipal Structures Second Amendment Bill
Committee Reports on Women in Local Government & Disaster Management
Presentation on Municipal Structures Second Amendment Bill
Presentation on Reconstitution of Municipal Councils
Presentation on Division of Powers and Functions

SUMMARY
The Committee Reports on the Conference held by Disaster Management Institute and the Conference on Women in Local Government were presented. Concern was raised about the extent to which issues relating specifically to the role played by women were canvassed and the representivity at the summit.

The Municipal Structures Second Amendment Bill aims to clarify when a municipality may change its municipality type and how this affects its office bearers, particularly when it type of municipality changes from executive committee to executive mayoral type. The department took the Committee through a clause-by-clause explanation of Bill.

The discussion on this presentation focused on whether the FFC was consulted and the financial implications imposed by the Bill, the effects of the Bill on the Crossing-the-Floor legislation, how exactly the MEC decides on the municipal types that will operate in the province and the need for criteria to be identified to be used by the MEC in reaching this decision. The extent of the consultation that takes place before the MEC changes from one municipal system to another was also discussed.

The presentation on the Reconstitution of Municipal Councils dealt with the time-frames for reconstitution of municipal councils, and also detailed the procedure to be followed.

During the discussion on the presentation Members posed questions for clarification, such as the consequences if a meeting is not called within seven days after reconstitution, what would happen if a "substantial party" fails to appear at the municipal meeting and whether the current 21 day period has to be observed.

The presentation on the Division of Powers and Functions outlined the legislative background, the current position, the planned inter-departmental process and the factors to be considered here, the implications of the decisions taken and their implementation.

The discussion on this presentation focused on the problems in shifting the provision of certain health services to municipalities because these are already do not possess the necessary funds to meet their mandate, how this process will be handled and the institution responsible for the provision of water and sanitation, and the relationship between the municipalities and the Department of Water Affairs and Forestry here.

MINUTES
Committee Report on Conference held by Disaster Management Institute
Mr B Solo (ANC) summarised the Report, which provides a breakdown of the events that took place on each day of the conference and the input that was made by the various speakers.

Discussion
Ms G Borman (DP) asked Mr Solo whether it was possible to gauge from the discussions at the conference whether there was a feeling that this would be easily implementable, or practical to implement.

Mr Solo replied that the talks did deal significantly with preparation for implementation, and some form of capacity with regard to disaster management services have already been laid out. The discussions looked closely at the establishment of the Disaster Management Centres and a substantial amount of groundwork has already been done here

Report on Women in Local Government
Ms C Lobe (ANC) summarised the Report by stating that the summit focused on capacity building and training, service delivery, partnerships and networking and the way forward.

Discussion
Mr B Kompela (ANC) added that the role of women in local government was discussed, especially with regard to the role to be played in NEPAD, but contended that the conference did not sufficiently confine itself to the South African situation.

Ms Lobe replied that the actual realisation of NEPAD lies with the municipalities because they are the only institutions that can deliver equitable and just services to the public, and if this cannot e effected then NEPAD is merely a "pipe dream".

Mr Borman stated that she has read through the portion of the Report dealing with "Capacity Building and Training", and contended that while some of the issues raised are specifically related to women the rest does seem to pertain to general councillors and not women in particular. Did it seem as though there would be a split between the training to be provided to female and male councillors, and was the costs aspect explored?

Ms Lobe responded that when the training of male and female councillors at local government level was discussed it discovered that they do not receive the same training, and a strategy has to be developed to address the training needs of women. This is not aimed at encouraging a split between the two, but instead recognises the need for a strategy detailing the training to be received by female councillors. The costs implications were discussed, and the money that will be spent in this regard is considered well spent because it seeks to redress historic conditions.

Mr Doman (NNP) stated that the last paragraph entitled "Conclusion" states that the summit was "indeed fully representative", yet he disagrees because the Western Cape was only represented by four members. He stated that he agrees with the recommendation in the Report that the progress made be taken to the provinces. Furthermore, only sixteen members of the executive were present, and it is interesting to note that it was learnt that 80% of the mayors in Eastern Cape districts are male, whereas 80% of the Speakers are female. The conference went well.

Ms Lobe replied that although only six men attended the conference it was accepted that all provinces were represented, and provincial workshops are needed to canvass these issues further because every municipality was not covered. Representivity is subjective, because those attending the conference are of the opinion that women in all the provinces were reached, and those Members of Parliament involved in the workshop have to ensure the results of the conference reach the municipalities.

Ms R Southgate (ACDP) asked whether poverty alleviation or eradication was discussed at all, because she was at the summit but only National Assembly and NCOP Members were present, yet the budget has to be filtered all the way down to the municipalities. It seems that it was driven by consultants and not the community, because the local government sphere should have been represented.

Ms Lobe replied that one of the core themes was poverty eradication and this was therefore focused on, and this was important especially if one considers that the majority of the poor are female. This has to be taken into account in effective transformation, and one of the IDP objectives is to address poverty and gender equality. It would perhaps be beneficial to provide Members with copies of all the documentation handed out at the summit.

The Chair suggested that this matter should have been debated in the House, and informed Members that he will be delivering a report on Public-Private Partnerships during next week and copies of this can be made available to Members. The study group will be visiting the provinces in the following clusters: Mpumalanga, Gauteng and Limpopo, Free State, Kwazulu-Natal and Eastern Cape and the Northern Cape, Western Cape and North West Provinces. These visits will take place from 19 to 27 January 2003, and Members should ideally not visit their own provinces so that they can get a feel of the other provinces. This has to take place because this Committee has only spent R24 000 of its allocated budget for this year, and if it does not spend the rest those funds would be forfeited. This Committee will also be sitting with the Finance Portfolio Committee from 18 to 27 November to finalise the Municipal Finance Management Bill.

Presentation on Municipal Structures Second Amendment Bill
Ms Jackie Manche, Deputy Director General: Institutional Reform and Support (the DDG), informed Members that the presentation would be brief and informal and conducted the presentation on the Bill (see document attached) which outlined the need for the Bill, its aims and the content of the each clause in the Bill.

Discussion
Ms Borman asked whether the Financial Fiscal Commission (FFC) was also consulted on this Bill for comment, because it does have financial implications when changing from an executive mayoral to an executive committee municipal system.

The DDG replied that the FFC has not yet been approached, because the Bill does not deal with the fiscal or the revenue-raising powers of the municipality per se.

The Chair contended that it is true that the FFC does have a role to play regarding fiscal powers but it cannot be called for comment on every matter involving financial cost because, should this be the case, all legislation with even a minor financial effect would first have to be examined by the FFC. This is not the actual role of the FFC.

The DDG stated that the Department is of the understanding that only matters relating to the powers of municipalities have to be submitted to the FFC, yet this Bill does not strictly deal with the powers of municipalities and rather deals with the structure of the institution. It has very little to do with the powers of municipalities.

Dr Petra Bouwer, Director: Legal Services in the Department of Provincial & Local Government (the Department), added that there are two areas in which the FFC plays a role. The first is Section 229 of the Constitution dealing with the enactment of national legislation aimed at regulating municipal taxes, and the second relates to Section 9 of the Municipal Systems Act which creates new powers, functions and duties for municipalities. Yet this Bill contains purely technical amendments of broader principle.

Ms Southgate referred to the clauses dealing with changing the type of municipality and its relation to the crossing-of-the-floor legislation, and asked how soon they would be allowed to change. Furthermore, how often would the municipality be able to change its municipal system?

The Chair stated that this is a cause of concern for him as well because, although it does not amount to crossing-of-the-floor, it could be seen to have been motivated by that law, and it could also be interpreted to not be limited to that window period. Although the Bill allows municipalities to change their structure this can surely not be read to mean that they can change at free will, but instead they should change because of a problem or weakness in its executive management. In this regard the executive committee municipal system is preferred, because the criticism levelled against the mayoral municipal system is that it allows the mayor to use the municipal council to insulate himself from change in the system. Yet Members were informed that the mayor is in any event not directly elected and his/her position is thus not inordinate and the Committee was also informed that the mayoral system is being used on a test bases, and should it prove too problematic it can be replaced with another system. Would it also be possible for the municipality to change from the executive committee system to the mayoral system?

Mr Doman contended that the executive committee would in any event function under the mayor and can therefore be removed at any time, yet this would not occur automatically because the MEC would have to apply his/her mind to the matter and follow the proper process.

Dr Bouwer responded to these concerns by stating that the Constitution itself provides that legislation has to be devised to direct this matter, and the provincial legislation first has to be amended with regard to the menu of types of municipality that may be used in the province.

The Chair agreed with Dr Bouwer but contended that the MEC would determine the type of municipal system and, although it was stated that s/he would be guided by regulations devised by the Minister of Provincial and Local Government (the Minister), this arrangement could be challenged as being unconstitutional. A framework is needed here within which the MEC can use criteria in deciding which municipal type should be employed in the province, because the MEC can currently "do as he wants". It has been explained that there is a menu of municipal types the MEC can choose from, but this menu could then also simply list all three types from which the MEC can choose, and this is a problem. This is open to many possibilities, and while it is not desirable to be too restrictive here, it is equally undesirable to be too open-ended.

Dr Bouwer replied that this was done in the Local Government: Municipal Structures Act (the Act), but those provisions were struck down by the Constitutional Court.

Mr Doman stated that the problem here is that the members of the municipal executive have the right to occupy those positions for the full term until the next general election, yet the Bill seeks to take away this right by ending their term prematurely when changing from one municipal system to the next.

Dr Bouwer responded that the clauses in the Bill follow the sequence in the Act as Section 45 deals with the election of a municipal council, and also provides that when changing from a mayoral municipal council to an executive municipal council, the new members of the executive council have to be chosen within fourteen days of the date of change. Section 47 of the Act provides for the changing from an executive municipal council to a mayoral type. This structure is reflected in the order in which the clauses appear in te Bill.

The Chair proposed that the terms "collective executive" and "mayoral executive" be used to refer to the executive municipal type and mayoral municipal type, respectively.

The DDG stated that Dr Bouwer was merely stating that the Bill details the trigger mechanisms that are needed to appoint the collective executive.

Mr Doman stated that the problem here is that these committees currently only meet on a quarterly basis, and if the members are aware that the purpose of the meeting is to change the power arrangement, they would merely postpone the meeting.

The Chair stated that the MEC would first have to decide whether the municipal system can be changed from a municipal to a collective executive.

Dr Bouwer stated that this would kick in from the date stipulated in the Section 12 notice.

Mr E Magashule (ANC) asked whether the municipality would be able to submit recommendations to the MEC.

The Chair answered in the affirmative, as this consultation has to take place.

Dr Bouwer added that the municipality can make such recommendations at any time, but it is up to the MEC as the proper political functionary to implement the decision

Dr Bouwer was asked to whether Clause 1 deals with the changing from a mayoral to a collective executive, whereas Clause 2 provides for the changing from a collective to a mayoral executive.

Dr Bouwer answered in the affirmative, and stated that Clause 1 provides the types of municipal systems, Clause 2 deals with the term of office when changing from a collective to a mayoral executive type, Clause 3 deals with the change from a collective to a mayoral system to force the appointment of an executive mayor and Clause 5 deals with the change from a mayoral to a collective system and the term of office.

Mr Magashule asked whether there is any reason for the change in municipal system, and if the reasons are not accepted by the MEC who would make the ultimate decision?

Dr Bouwer replied that consultation is required, but the MEC makes the final decision.

The Chair contended that this does not seem to be democratic even though the action is in accordance with the enabling legislation, and for this reason the collective municipal system is preferred. The mayoral type also seems to exclude important stakeholders in the community, and it is also so uncertain that it is not certain how it would operate in practise.

Mr Doman stated that he found in practise that if the MEC did not apply his/her mind in making the final decision, the municipality would still have recourse to the courts. It has been found in practise that the mayoral system makes it possible for one individual to become so powerful that s/he even challenges his/her political party dictates and thus poses a great risk. Thus the mayoral system does not seem to work in certain circumstances.

Mr Magashule contended that the financial status of the municipality is affected when changing from a mayoral to a collective type, because the members' status then immediately lowers.

The Chair stated that executive mayors are paid higher salaries, and it does appear that the mayoral type does not work harder and does not operate under as much stress as the collective executive mayor because he delegates many functions to his subordinates. Thus the collective type mayor should be paid more, but the difference in salary is not that substantial.

Mr Doman contended that municipalities have called for the withdrawal of these restrictions for full-time speakers and mayors, and what is the difference between the payment of executive and mayoral types?

The DDG responded that this information could be made available to Members at a later stage.

Ms Borman stated that there is a Constitutional Court case pending for 12 or 14 November 2002 on the representation of a mayoral committee in Orlando, and it could very well affect the current arrangement.

Dr Bouwer replied that this case will be heard on 14 November 2002 but he is not sure when exactly the judgment will be handed down.

Ms Southgate asked what would happen to the members of the collective executive in five years time?

The Chair stated that their term of office would come to an end in 2005, but this matter will be dealt with in greater detail by Dr Bouwer in his presentation.

Reconstitution of Municipal Councils
Dr Bouwer led the Committee through his presentation (see document attached) which detailed the time-frames during which the reconstitution of municipal councils may take place, and also outlined the procedure to be followed in each.

With regard to the first point listed on the slide entitled "Reconstitution Steps" it should be noted that the rule requiring a fourteen day notice to be given of the meeting can be dispensed with here, but this meeting would have to be minuted. Furthermore, full reconstitution of the council does not have to take place at this first meeting, it is only the municipal type that has to be decided here.

Discussion
The Chair stated that this presentation clearly separates the legal requirements from the political forces at play.

A Member (ANC) suggested that these provisions would now override standing orders.

Dr Bouwer replied that the Constitution trumps by-laws in any event, and it was recommended that councillors formally state that these would trump the by-laws.

Ms Lobe asked what the position would be should a meeting not be called within seven days of reconstitution.

Dr Bouwer responded that there are remedies in place, such as court action.

Ms Southgate asked what the position would be should a "substantial party" fail to attend the meeting.

Dr Bouwer replied that Section 156 of the Constitution provides that the Constitution trumps any by-law.


Mr Doman asked whether the mandatory 21 day period first has to transpire before national and provincial members can be redeployed to the local government sphere.

Dr Bouwer replied that he is not sure of the precise manner in which this will be implemented by the national and provincial legislatures, but stated that he understood that exact compliance with the time period is not necessary. This Committee contended that this would allow members to "chop and change", but this is not the position. Local government legislation does not require members to wait for 21 days to elapse, and the General Laws Amendment Bill will be introduced to clarify that this reconstitution can occur as soon as possible, so that members do not have to wait the full 21 days.

Division of Powers and Functions: Ministerial Authorisations and Revocations
The DDG informed Members that this is a fairly lengthy presentation (see document attached), but the first few slides have already been covered in a previous briefing to Members. The presentation detailed the legislative background to the division of powers and functions, the current position, the planned inter-departmental process aimed at resolving this problem, the criteria to be considered and key consideration, the decisions and authorisations taken with regard to health, electricity, water and sanitation and the implications of these decisions and their implementation.

Discussion
Mr Solo stated that it appears that there are still municipalities that operate within the TLC/TBC jurisdictions, and are efforts being made to address this matter to effect the new demarcation?

The DDG responded that these municipalities are performing in terms of the old boundaries, and the point made here is that this is precisely what the authorisations did and created a problem. It is for this reason that the authorisations have to be revoked, and an entirely new system has been devised, and the new category B and C municipalities have now been introduced.

Ms Southgate asked for the timeframes for the implementation of the decisions taken.

Mr Peter Vas, Consultant to the Department, replied that implementation is expected to occur during January to March 2003.

Ms Borman asked if water and sanitation authorisations are permanent, or can they be changed?

The DDG replied that these are permanent decisions made by the Minister.

Secondly, Ms Borman asked the Department to explain the influence of the reports received and, in view of current developments, are amendments envisaged to the Municipal Structures Act? This is an important matter because the B and C municipalities are not delivering properly and are not functioning optimally.

The DDG answered in the negative.

The Chair asked whether there are other reports dealing with the review of the Municipal Structures Act apart from the Leon Report.

The DDG replied that the Department has considered several reports on the substance of the Municipal Structures Act, and the FFC submitted a good report which was considered. The National Treasury and the MDB have also submitted a report which was used during the deliberations with the stakeholders, and one report is not favoured above another.

Rev A Goosen (ANC) contended that the presentation states that additional responsibilities will be placed on the C municipalities, but these municipalities are already suffering from a lack of necessary funds. The only means by which to perform these functions should be the health clinics yet because of the current state primary health care is suffering, and these services as well as certain provincial functions are now to be taken over by the C municipalities, especially in the Eastern Cape. This therefore merely amounts to shifting responsibility from one municipality to another. How then will the C municipalities be able to perform this very important function?


The DDG responded that this is the very reason behind the Department's decision to grant itself more time to consider all the possibilities to be employed at the level of C municipalities, including funding considerations and the property rates scheme for health services. Thus the Department's primary concern is that these are well funded.

Mr Vas added that it was decided to term certain health services "Environmental Health Services" to distinguish these from services provided by Primary Health Care, so that any possible encroachment is avoided.

Ms Lobe asked why some of the responsibility for providing water and sanitation services is not shifted to the B municipalities.

The DDG replied that it was felt that the C municipalities have to be given the authority to ensure these services are provided, but in practice the C municipalities could reach an agreement with the B municipalities to provide these services. This clearly illustrates the difference between the body that provides the service and the body that authorises its provision.

Secondly, Ms Lobe stated that there is a need to build capacity of municipal services, because the slide entitled "Current Position Continued" does not state whether there are any plans to reconcile the general powers to the issue.

The DDG replied that this can be transferred from a B to C municipality, and support measures have also been identified that have to target the municipality when the mayoral position changes.


Mr J Ngubeni (ANC) asked whether there are some facilities that are administered by the provinces, and what has happened to them?

The DDG responded that Environmental Health Services (EHS) are more narrowly defined than Primary Health Services (PHS), because PHS includes services which EHS does not provide.

Ms Vas added that the definition of EHS is to be found in the National Health Bill and includes water issues, air pollution etc. The Department has disagreed with the Department of Health that PHS be provided as a single package and that the "bits and pieces" would not be packed out. But at the end of the day it was decided that the whole PHS package would be given to the provincial government, and the Department of Health plans to move these services down to the municipalities over time.

Mr B Nobunga (ANC) asked what role the Department of Water Affairs and Forestry plays in providing water and sanitation services because these services have now been allocated to a category of municipality to provide, yet it is currently done by that department. How does the work done by that department impact the provision of these services?

The DDG replied that when the Department compiled its report the Department of Water Affairs and Forestry was satisfied with its proposals for the Limpopo, Mpumalanga and North West Provinces, but it has since informed the Department that three provinces are currently experiencing problems in transferring water schemes to the B and C municipalities. These services were then aligned with that department in the three provinces, and a process has now been put in place to transfer those schemes to the municipalities. This will move the provision of these services away from the Department of Water Affairs and Forestry so that it can focus on what it should be doing: developing and implementing policy related to water affairs and forestry. This process will thus change the role of that department.

All efforts will also be made to ensure that that process is well managed and properly funded, and it is also a priority for those services to be transferred in a good state so that the municipalities are not burdened with problems and the transfer of funds.

Mr A Lyle (ANC) contended that it is not totally true that the funds collected from municipal rates are used to provide health services, as stated earlier by the Department, and stated that he is concerned that these funds are not being spent on health services. Furthermore, if this is the case and property rates are used on health services, are the municipalities then compensated for this loss in revenue?

The DDG replied that it is not true because the funds are received wither from the provincial government or from the rates account, but if municipal rates funds are being used by the C municipality it will be compensated. The property rates collected by the B municipality could then be handed over to the C municipality, and it is therefore important to align the general powers with the final powers.


A general power has to be formulated here, and the functions first have to be identified before the necessary funds can be allocated. For this reason the Department recommends that the same policy not be implemented throughout South Africa but that each municipality be looked at individually, including its levy and rates revenues and equitable share allocation.

The Chair stated that he is satisfied with the extent of the consultation process as indicated in the presentation, and he is sure that it was meaningful consultation.

The DDG responded the consultation process "took forever" and people were really listened to, and the FFC were vocal about keeping health services at C level.


Secondly, the Chair contended that the diagnostic studies done are good, but Parliament does not know of the quality of these studies and whether they are in fact value for money.

Thirdly, the Chair stated that he agrees that the decisions taken have to be permanent so that certainty is ensured, but these members have to fill those positions for five to eight years without knowing how it will pan out. He is thus concerned that no strategy has been put in place for the next ten to fifteen years to deal with one municipal model as opposed to the others.

The DDG responded that the Department has created a developmental local government institution, and the intention is to develop the district councils so that they have the necessary capacity to function properly and serve their communities. If this is not currently the case then it would be unrealistic to ensure the development of the requisite capacity at C level over the next few years to enable it to achieve its objectives. The next ten years planned for once the necessary capacity is developed.

Furthermore, a developmental local government is one of the most important spheres of government, and it also means that it future other functions could be assigned to the local government sphere, such as housing. This has an important role to play in the vision of local government, and it makes sense that all development should take place at this level.

Ms Southgate asked whether any support mechanisms have been put in place to ensure this.

The DDG replied that such mechanisms include the Masimbambane project which is a joint initiative with the Department of Water Affairs and Forestry, the PIMS centres in the district municipalities, a management team project with a fund of R160m and a R100m Municipal Schemes Improvement Grant.

Rev Goosen asked what would happen in the interim if municipalities are only to take over the provision of certain services in 2004.

The DDG responded that the Department has inherited a troubled dispensation, and the C municipalities could provide these services from revenue or subsidies received from other sources. There are thus different funding arrangements available to those municipalities and it is difficult to arrive at a policy that accommodates the whole country, because municipalities differ.

The provincial clinics will continue to function as they currently are, and the country will see the changes when the Department of Health packages the whole service, with regard to the relationship between the functioning of local government and the B and C municipalities. The necessary funding will then follow. The existing clinics will continue to run and will still be funded by the province.

The Chair contended that the public education aspect as listed in the slide entitled "Implementing the Decisions" is vital.

There were no further questions or comments and the meeting was adjourned.

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