Section 139 intervention Renosterberg Municipality: Northern Cape briefing

Meeting report

Chairperson’s introduction

The Chairperson said the purpose of the meeting was for the Committee to be briefed by the Northern Cape provincial Department of Cooperative Governance, Human Settlements and Traditional Affairs (COGHSTA) on its decision to invoke section 139(1)(c) of the Constitution, wherein the municipality of Renosterberg would have to be dissolved.

He explained that according to the Constitution, when a provincial government has invoked section 139(1)(c) of the Constitution, it compelled the provincial government to immediately inform the Minister of Cooperative Governance and Traditional Affairs and the National Council of Provinces (NCOP). Within 14 days of the notice being served to the Minister and the NCOP, the intervention had to be approved or disapproved. According to the Constitution, the provincial government was empowered to invoke section 139(1)(c) if it felt that there were exceptional circumstances which warranted the dissolution of the municipality.

The provincial government, the municipality itself, the South African Local Government Association (SALGA), as well as all the stakeholders within the municipality, would be afforded the opportunity to be represented concerning the matter. Once the Committee had listened to all the stakeholders, the submissions before it would be considered with a view to presenting a report to the House. The meeting of the House was scheduled for the following day, where the Committee’s recommendation of whether or not it approved the intervention by the provincial government would be presented. The Committee would engage with submissions so that it was empowered to determine if there were exceptional circumstances present to dissolve the municipality. It was important for the Committee to do this in the interest of ensuring fairness and justice in this instance.

MEC’s introduction

Mr Bentley Vass, Member of the Executive Council (MEC): COGHSTA, Northern Cape, said that the delegation included the Chairperson of the Committee on COGHSTA, SALGA leadership in the province, political party representatives from the provincial legislature, Pixley ka Seme District Municipality and members of the Mayoral Committee. He did not see the local municipality, and he was not sure if they had been invited. There were officials from the Department of COGHSTA present as well.

The Chairperson asked if the unions were present.

MEC Vass responded that the unions had been invited, but he was not sure if they were present.

The Chairperson said it would be established if they were present as the meeting proceeded.

The Chairperson thanked the MEC for assisting by extending invitation to all key stakeholders in the province and municipality to engage with the issues before the Committee.

The MEC and his team would be allowed to present on the reasons why it had decided to dissolve the municipality. It was a very small municipality, and according to the report before the Committee there were a lot of issues, but it was better to hear from the province why the decision had been taken. After this presentation different stakeholders would be afforded the opportunity to address the Committee on the decision.

Reasons for Renosterberg Local Municipality intervention

MEC Vass said it was in government’s interest to ensure that there were stable municipalities which were in a position to render services to communities. Local government was at the forefront of service delivery, and people experienced serious challenges in terms of the lack of basic services to communities. The Renosterberg Local Municipality (RLM) had failed to make sure it delivered credible services to the community.

MEC Vass and the Premier, the Tax Payers Association, as well as members of the community, had been invited by the Council to a meeting about the challenges the municipality faced. The meeting had indicated that there were serious challenges. Members from the provincial legislature had tried to assist the municipality with its challenges by requesting serious documentation so that the facts raised by some of the members of Council and the community members could be investigated. However, there had been no cooperation from the side of the municipality regarding its requests to assist.

A team had been sent in from COGHSTA, the Provincial Treasury, as well as the District Municipality to meet with it and give it the necessary support, without any success. There were a number of other challenges that faced the RLM, such as the failure to appoint senior managers. There was only a Municipal Manager (MM), but no Chief Financial Officer (CFO) and Technical Manager. There were also a number of other vacant positions.

The municipality had failed to hold meetings as outlined by the Municipal Structures Act. It had to have at least one meeting per quarter, but it was operating only in terms of special meetings.

It was clear that in respect of oversight over the municipality, the Council did not play this role to ensure the proper implementation of its decisions. There were electricity challenges, and also unrest from the community which raised a number of issues.

A meeting had been organised with Eskom concerning the Municipality’s outstanding debt of R89 million, which had risen from R1.5 million to R89 million in 10 years.

The community had stated that they were paying the municipality, but the municipality was not paying Eskom. At the meeting with Eskom there were no representatives from the municipality -- not the Mayor, nor the MM.

It was clear that the provincial government was trying to assist the municipality, but it had not cooperated. The presentation would outline further challenges in the municipality. The provincial government wanted to assist the Municipality so that local government could be stabilised and services were rendered to the community. The challenges of the budget, financial recovery plan, and a number of issues would be presented.

One of the issues that were particularly concerning was that the municipality was not paying its third party payments, such as medical aid and Unemployment Insurance Fund (UIF) contributions. It was also not paying the Auditor-General (AG).

It was clear that the decision had been taken based on this assessment as the provincial government. The correct procedure had been followed in terms of its approach to ensure that it assisted the municipality.

Presentation

Adv Mogami Manyeneng, Acting Chief Director: Cooperative Governance, COGHSTA, said that the MEC had covered the background, and indicated what the provincial government had done to assist the municipality.

The provincial government had requested the Provincial Executive Council (PEC) to:

• Approve the intervention by dissolving the Municipal Council;
• Impose a financial recovery plan;
• Authorise the MEC to appoint an Administrator;
• Authorise the MEC to facilitate the election of a new Municipal Council and designate the Administrator to convene the first meeting after the Council had been elected; and
• Authorize the MEC and the finance department to conclude all the necessary formalities related to the intervention.

 

The community concerns, as raised by the MEC, were outlined.

Constitutional matters

The communication from the office was with respect to three issues -- the constitutional imperatives, the procedural matters and the substantive matters of the intervention. The provincial government indicated that it was intervening on the basis of section 139 (1)(c) and 139 (5) of the Constitution. Only clauses that were applicable to the municipality were used. Section 139 (5) (b) was utilized, as the municipality had failed to meet its financial obligations.

Procedural matters

Once the provincial government had made a resolution, it had to inform important stakeholders immediately, and the MEC had done this on 24 August. The provincial government had gone over and above to identify important stakeholders, which it had informed. The Constitution did not prescribe that the Minister of Finance be informed, but it had felt that this was a Constitutional drafting error and the Minister of Finance had been accordingly informed, and this had been written into the legislation.

Adv Manyeneng said the MEC had made three important interventions. When cooperation was not forthcoming from the municipality, and having observed the issues that the MEC and Premier had heard from the community, the MEC had issued a directive to the municipality. The directive had requested the municipality to take specific actions, such as holding a Council meeting to deal with specific issues instead of meddling in issues that were irrelevant for the purpose of the community and municipality’s interest. This letter was dated 10 July. The municipality had not called a Council meeting in this regard to ensure that in the spirit of cooperative governance, it had done what was prescribed by the MEC.

There were serious allegations that the MM had increased his salary without following due process. The directive issued by the MEC was not a statutory directive. The MEC had gone a step ahead and issued a statutory request for information according to section 106(1). This measure was not ordinarily used, as the MEC did not request information through this measure, as it was a far reaching legislative measure. The MEC had used the measure because there had been no cooperation from the municipality.

There were allegations from Councillors that Councillors were involved in supply chain management. The MEC had to conduct an investigation into the matter, but this could be done only once the municipality provided the necessary information. There had been no response from the municipality to the section 106(1) statutory request.

Adv Manyeneng said that there had been “after effect” letters which the municipality had generated after 13 July to pretend as if it had responded to the MEC. The system and provincial records showed that such information had not been received. The letters had appeared this morning in an attempt to show that the municipality had attempted to respond to the MEC.

The MEC had gone further to ask why the municipality had not requested the provincial government to intervene, but there had been no response to this letter. It was a position that the municipality had taken with the provincial government. The municipality was undermining the provincial government, but it had also emerged that the municipality was doing the same to the legislature.

The MM had proudly indicated to Eskom, on behalf of the Council, that he “cannot intelligently rely on a provincial government” whose action “qualifies as subversion, sabotage and undermining” to “guide Renosterberg out of a crisis.” The MM had been appointed on 1 January 2020, and did not know about the efforts the provincial government in regard to Renosterberg, but had castigated the provincial government.

Adv Manyeneng said the provincial government believed the reason why the municipality had not been appointing senior managers was because the MM was the advisor to the Municipal Council, and had surrounded himself with third party consultants. This was why the municipality was taking so long to appoint senior managers, because the MM relied heavily on third party consultants who, he said, were addressing matters in the municipality.

Following this, the MEC had approached the PEC on 20 August for intervention by dissolving the Municipal Council of RLM, and this had been approved by the PEC. The intervention had not yet taken place, as it was subject to the approval of the Minister and the NCOP.

Substantive matters

Adv Manyeneng said there were substantive matters on which the request to dissolve the municipality was based. The municipality had failed to appoint senior managers. The MM had also been appointed as the acting chief financial officer (CFO) and Acting Director: Corporate Services, which meant there was no separation of powers. The municipality had held nine Special Council meetings, despite having a schedule, and the resolutions taken at these meetings were not in the interests of the municipality and community.

Governance

The Council had agreed with the MM that its councillors had not been remunerated properly. A consultant was then appointed, and it had not used the municipal experts appointed by National Treasury to determine the implication of this short coming. It had come to the provincial government’s knowledge that councillors had each received R150 000, but this still had to be verified.

The sale of immovable property had also been observed, and a Council member had tabled it himself at a meeting, which was against procedure, as items had to be tabled by the accounting officer of the municipality. Perhaps the sale of immovable property was an acceptable approach to alleviate financial pressures, but this had to be done within the prescribed financial models and legislation.

The municipality did not have a Public Accounts Committee or a Disciplinary Board, and had failed to adopt a financial recovery plan. The National Treasury had been to the municipality 2018, but the municipality had disregarded them – it had failed to accept support from the National Treasury

Adv Manyeneng said the municipality was also unable to meet its financial obligations, and third parties had not been paid. He had a letter from the MM dated 2 July, which stated that when one employee passed away the pension fund had not paid out, and the municipality took the responsibility to pay the deceased’s family. Pension funds were not supposed to be paid by the municipality directly. This was unlawful and irregular expenditure.

The recovery plan used by the municipality was not part of the financial recovery plan determined by the Provincial and National Treasury. The municipality was also failing to address the Eskom issue, as it had infrastructure challenges and was not following the MEC’s recommendations.

The Chairperson said he would give the Advocate more time, but he must not repeat information.

Adv Manyeneng said the slides on observed governance matters and administrative matters contained information that had already been covered.

Financial misconduct and mismanagement

The instances of financial misconduct and mismanagement were outlined. Section 71 reports were not tabled before the Municipal Council, and irregular expenditure was not reported, amongst others.

Adv Manyeneng said that for these reasons the provincial government requested that the Committee concur with the proposed intervention by the PEC.

The Chairperson said the submission had been comprehensive, and had given a sense of what the provincial government was saying.

Discussion

Mr S Mfayela (IFP, KwaZulu-Natal) said that the presentation was perfect, but the municipality had to be present to concur with it. He wanted to know what the main reason was for the Municipality not attending the meeting. The municipality’s take on the matter had to be heard.

Ms C Visser (DA, North West) said she had carried out extensive research about the situation in Renosterberg.

The Chairperson said that he wanted questions based on the presentation, and that there would be an opportunity after this submission to raise other matters.

Ms Visser said that the document she had prepared was in line with presentation. She asked if she could discuss this.

The Chairperson responded that he was strictly requesting questions of clarity regarding the presentation.

Mr E Mthethwa (ANC, KZN) asked if the third party payments that were not paid over were deducted from employees’ salaries. Were there charges against the MM for misusing his powers for personal gain?

Ms M Bartlett (ANC, Northern Cape) said the Mayor not attending the meeting appeared to be undermining, but she would reserve the matter for the discussion.

Ms Visser asked if the MEC was aware of a notice of dispute in terms of the Governmental Relations Framework Act had just been served on the MEC, and therefore the intervention had been halted.

Department’s response

MEC Vass said the municipality had been invited, and in his view there was no reason why it could not attend. It was not the first time that the municipality had failed to attend meetings. A few days ago, there had been an invitation from the provincial legislature inviting the municipality as part of an oversight visit, but it had failed to attend the meeting. Last week, it had also been invited to attend a meeting on the District Development Model. It was clear that there was no participation from the municipality’s side to address its challenges together with the provincial government.

The matter of third party payments was why part of intervention included the Special Investigating Unit (SIU) and other relevant authorities having to investigate matters in the municipality. There were a number of issues that required the attention of investigators.

The absence of the Mayor would be looked into.

In response to Ms Visser, he said that he had received no communication that the investigation and processes had been halted.

Adv Manyeneng, in response to Mr Mthethwa, said no charges had been laid against the MM.  Part of the Mayor’s responsibility was to ensure that cases of financial misconduct were reported, but nothing had been reported.

Mr Mthethwa interjected, and said that he wanted to ask a question. He was trying to find out whether the money had been deducted from employees but had not reached the third parties, or if it had not been deducted from employees.

Adv Manyeneng responded that the money had been deducted from employees’ salaries, but was not transferred over to the third parties.

The Chairperson said that the presentation had been received from the Department and the Committee had asked clarity seeking questions.

Mr K Motsamai (EFF, Gauteng) spoke in the vernacular (1:05:09)

The Chairperson said that it was a good question, and it would be addressed. The presentation had been received and clarified. The stakeholders were now invited to comment on the presentation and the intervention. He asked if there was anyone from the municipality present in the virtual meeting. He said the municipality had two political parties, with four ANC members and three DA members. There was no indication of the municipality being present in the meeting.

Provincial legislature and councillors’ comments

The Chairperson invited the provincial legislature to comment.

Mr Johannes Oliphant interjected, and said that he was a councillor from the municipality.

The Chairperson asked how many councillors were present.

Mr Oliphant said that there were two ANC councillors from the municipality present.

The Chairperson said that the two councillors would be allowed three minutes each to speak.

Mr Oliphant welcomed the presentation, and said he agreed with it. It was a true reflection, and he supported the municipality being placed under administration. With the appointment of the MM in 2020, he had been very excited because the municipality would be taken to the next level, because it had been without senior managers for a long time. However, to his surprise, the MM had come and divided the people of Renosterberg. The sole responsibility of the municipality was to render services to the community.

The Chairperson asked how Mr Oliphant had been informed about the meeting.

Mr Oliphant responded that the sub-regional chairperson had informed him. Neither the current Mayor nor the MM had informed him about the meeting.

The Chairperson gave thanks, and asked the second councilor to speak.

Ms Felicity Jantjies, ANC councillor, said she supported what councillor Oliphant had said.

Ms Visser said there were several people could not connect to the meeting. Councillor Posthumus and Mr I Sileku (DA, Western Cape) could not join, and this was not right, as Members had to participate freely. She requested that the matter be addressed.

The Chairperson that it was a long meeting on the matter, and Members would be afforded the opportunity to engage on the intervention.  There would be engagement on the matter by Members and stakeholders, then Committee would have a discussion after adjourning for a few minutes in order to prepare the report. Nobody was restricted from contributing in the meeting.

Ms Limakatso Koloi, Chairperson of the Committee on COGHSTA, Northern Cape Provincial Legislature, said she aligned herself with the presentation. The MEC had informed the legislature through the Speaker about Renosterberg. The legislature had embarked on an oversight visit to municipalities, based on their audit outcomes. Renosterberg was one of the municipalities that had to be engaged on, based on its audit outcomes in respect of its governance and financial management. As the MEC had said, the municipality had not responded to the call of legislature. Neither the Mayor nor the MM had responded, and there had been no one to liaise with in order to carry out the oversight. This meant that the letter sent by the MEC was in order, and that the municipality was dysfunctional.

She had thought the municipality had been undermining only the legislature, but it was shocking that it was not adhering to the call of the NCOP as well. The Committee on COGHSTA had had a joint oversight meeting with the Standing Committee on Public Accounts (SCOPA) about oversight in the municipalities. As Chairperson of the Committee on COGHSTA, she agreed with presentation.

The Chairperson asked if there were more comments from the legislature.

Ms Fawzia Rhoda (DA), Northern Cape Legislature, said she represented the DA and sat on SCOPA as well. The legislature had just come out of a process of joint committee oversight with SCOPA and COGHSTA concerning the audit outcomes of municipalities.

A very real concern was that the issues presented by COGHSTA related to all municipalities, as there was only one district municipality that had a clean audit. The issues raised as reasons for invoking 139 were relevant to all municipalities with bad audit outcomes.

There was a process for invoking section 139, and the legislature had to be part of this process. At the last meeting, as reported by Ms Koloi, the municipality had not presented itself. There was “minagting” (contempt) that had taken place. The legislature had then decided it would present itself physically in terms of oversight for the municipality, but this had not happened. She felt that its duties and responsibilities in terms of oversight and accountability had been circumvented when this process went directly to the NCOP.

The Chairperson said that Ms Rhoda must not misinterpret the law. She had been given the opportunity to address the Committee on her view of the matter at hand, and she should not talk about other municipalities. The provincial government had the right to refer the matter to the Minister and the NCOP. There was no legislation that stated that the Provincial Legislature had to be consulted first.

Ms Rhoda noted what the Chairperson had said. She said it was worrisome that the presentation had included information that was unverified. A critical decision had to be made based on the presentation, and unverified information being mentioned was worrisome.  She asked if there could be engagement on whether the matter could be brought back to the province. She asked for clarity on the statement by Ms Visser about the issuing of an interdict.

The Chairperson said that the process would not go back to provincial legislature, as it was in the NCOP. The intervention would be approved or disapproved, but not sent back to the Provincial Legislature.  He said SALGA would be allowed to address the Committee next.

Mr Shadrack Tlhaole (EFF), Northern Cape Legislature, asked to speak.

The Chairperson apologised for not giving him a chance to speak.

Mr Tlhaole said that he welcomed the intervention by the provincial government that the municipality be dissolved. As much as he agreed, he requested that it be taken into consideration that the issues in the municipalities emanated from the past three decades. The problem had begun in the third administration.

The EFF wished that although the national government had to intervene, it would consider how best to intervene financially to assist this municipality, which had been in crisis for the past 15 years. Even if the municipality was dissolved, it would need intervention as a collective from the state. The municipality needed serious intervention.  

Mr Danie Coetzee (FF+), Northern Cape Legislature, said that his party fully supported the intervention, and was glad that it was happening.

SALGA Presentation

The SALGA representative said the Association welcomed the opportunity provided by the NCOP to engage on the issues of RLM, and that it appreciated all the efforts undertaken to assist the municipality.

It was crucial that interventions and support plans were not vague, open ended and misdirected, but ensured that there were clear and precise objectives and purposes on how the Provincial Government aimed to address the situation at the municipality. SALGA was happy to provide the necessary support to the both the province and members of the municipalities.

SALGA had a short presentation which it wanted to present. The presentation would outline the background of Renosterberg, SALGA’s suggested approach and recommendations.

According to the Municipal Finance Management Act (MFMA), SALGA had to be consulted prior to finalisation of a financial recovery plan; receive quarterly progress reports on the Intervention; and make representations to the NCOP when considering the Interventions in the case of mandatory provincial interventions arising from financial crises in municipalities. The representative informed the Committee that the MEC had informed SALGA about the meeting, and that she had also attended a meeting.

Engagements between Renosterberg and COGHSTA

SALGA had made several attempts to meet with the Renosterberg leadership. It was supposed to have met with the municipality, but due to the ill-health of the MM, the meeting could not take place.

On 26 July, SALGA had received an e-mail from COGHSTA on Section 106 (1) for information, and (3) motivation to NCOP. There had not been an engagement with COGHSTA, beside the e-mail that was sent on 26 July.

SALGA’s position on the intervention

There had been serious allegations of service delivery and governance challenges, but SALGA had been unable to confirm or deny the allegations.

SALGA’s position was to see the fulfilment of the objects of local government.

The questions to be answered in taking the decision to dissolve or not to dissolve Renosterberg Council were whether it would advance the provision of democratic and accountable government, the provision of services, and the promotion of social and economic development for the people of RLM.

Impact of the decision to dissolve RLM

In implementing a Section 139 (5) intervention, a two-stage process had to be followed:

1. The imposition of a financial recovery plan must be developed in terms of national legislation (MFMA);
2. The implementation of the financial recovery plan had to be implemented by the municipality or dissolution of the council, or the assumption of the responsibility by the province.

In order to meet the objectives of local government, the following basic actions were necessary:

• Development of a clear, concise and detailed financial recovery plan should be developed;
• Clear and elaborate terms of reference for the appointment of the Administrator, together with a team of experts. It was very important that a team be deployed;
• The team to be appointed must possess the necessary expertise, experience and qualifications to assume responsibility for the implementation of the financial recovery plan;
• Regular and structured reports on the implementation of the intervention must be provided;
• Peaceful by-elections and the reconstitution of a new municipal Council must be convened. 

Approach to support municipalities

An approach created by SALGA to support the municipalities was outlined. The model included the development of an early warning sign system, municipal ongoing self-assessment, ongoing monitoring at the national and provincial level, and targeted support which was monitored as well.

Recommendations

SALGA recommended that the Committee resolve to:

• Place the fulfilment of the objects of local government at the centre of taking a decision to approve or disapprove the PEC decision to dissolve the Renosterberg Council;
• Should the decision to dissolve be supported, it would be critical for the necessary actions as outlined herein to be executed.
• SALGA proposed the approach to municipal support and interventions, as outlined.

Discussion

The Chairperson welcomed the SALGA presentation. He asked if there was any organisation that had been left out the submissions. A DA councillor still had to comment, but he had connectivity issues.

Mr Sileku said that he had had connectivity issues, and wanted to ask questions.

The Chairperson said that Mr Sileku would be allowed to ask a few specific questions, and then there would be a discussion.

Mr Sileku said that according to the presentation, there had not been correspondence from the RLM. However, there had been correspondence.  There had been correspondence between the office of the MEC and the Acting Director, the office of the MM and the Mayor. There was correspondence from the MM to the MEC on 2, 7, 10 and 21 July. From the Mayor to the MEC, there had been correspondence on 13, 24 and 29 July. Was the MEC saying that all this correspondence had never reached his office?

How long would it take to determine if this intervention was not working? What scientific process or formula did the province use to determine that the only way to assist the municipality was to dissolve it? It was almost as if someone was retaliating, and that there was a power play between the MEC and Council.

The issue of political instability had not been included in the presentation -- the MEC had had to provide a background on the matter. Who was the previous Mayor? Who was the current Mayor, and what had actually happened?

The Chairperson asked the MEC to respond to Mr Sileku.

MEC’s response

MEC Vass responded on the correspondence from the municipality, and said none of the letters had been received. Some of the letters were not even signed. It was clear that some of the letters had been written in the past few days. When he issued a letter to the municipality and the Mayor requesting why the matter should not be taken to the PEC, based on his assessment that there was a crisis and intervention was needed, there had been no response.

On how long it took and the scientific approach, he said that it was not about a scientific approach, as there were challenges in the Municipality. It was as clear as daylight that there was no willingness from the RLM to cooperate with the provincial government when directives were issued to it.

On the change in Mayors, he said that there had been a change in the political leadership, as Councillor Nicholas was now the Mayor, but the RLM would be best to respond on why the mayors had been changed.

Mr Sileku asked that the MEC indicate which of the letters he had received from the letters that he had mentioned.

The Chairperson said the he did not want to entertain the matter, as the letters he was making reference to had not been made available to the Committee. He could not force anyone with due to respect to respond to letters that the Committee was not aware of. The RLM was not present to present these letters itself. It was up to the MEC if he wanted to respond to the question.

MEC Vass said he would check with the Department, and forward the letters to the Member.

Further stakeholder comments

Mr Matt Posthumus (DA), Councillor, said that the RLM had been struggling from 2011, when it had owed Eskom R1.2 million, and there was never an intervention. From 2012 to 2020, there were acting MMs, but the municipality had moved into a position where it could appoint its own MM, and the current MM had been appointed and started working in January 2020.

The MM had come up with an Eskom recovery plan, which had been done by a qualified person in conjunction with some councillors. It was a workable piece of art, but he had been illegally suspended by the then mayor. However, the decision had been rescinded as it had not been done according to the law, as the MM had not been afforded the seven day period to respond. The Mayor had walked into his office and said the caucus had decided he had been suspended.

Four of the councillors had come together and decided that this would create a big legal bill for the municipality, which it could not afford. The decision had then been taken to rescind this decision. There was a motion of no confidence, and a new mayor had been appointed who was up to the challenge, and had done great work since then.

The RSK Consulting firm had been appointed, and it had come up with a financial recovery plan and audited parts of the municipality, the supply chain and the personnel department, but was still busy. A report on the personnel department indicated huge problems.

RSK had been appointed from January to the end of August, and numerous new actions had begun. Council meetings had continued, and work was being done closely with the community. All of the Eskom debt had accumulated before the new MM started, and since then Eskom had been paid in full for the bulk bill for the last three months. This was based on the deal it had with Eskom. The Eskom recovery plan would be rolled out as well, once it negotiated with Eskom.

On the pension fund and third party payments, he said the debt had been accumulated by the previous MM and mayor, who had not played his oversight role. Since the new MM had been appointed, he had had a meeting with the third parties and the Auditor General (AG). The MM had come to an agreement with the third parties to reach a payment plan, but it was still an ongoing process. Huge progress was being made in collaboration with RSK.

The statement sent through to the AG showed an amount paid by the previous acting MMs of R3.7 million to consultants who prepared the statements. The previous acting MMs were not only inadequate, but also misinformed and misleading. Since then, RSK had taken the decision that the MM had made with Mr Jan Hattingh from Treasury, to have all the statements for 2016-2020 completed by the end of October, and sent to Mr Hattingh.

He did not believe that section 139 was the best approach. The municipality wanted to work with COGHSTA, but it wanted to work right. The municipality had risen from the dust, and huge process had been made.

The Chairperson asked how Mr Posthumus knew about meeting, and where the Mayor was.

Mr Posthumus said the Mayor had been invited. but there was no signal in Phillipstown where the Mayor lived. He had been invited and had sent his email address to join.

Mr Oliphant raised a point of order, and said that he was from Phillipstown.

Mr Tlhaole raised a point of order, and said that Mr Oliphant had already been afforded an opportunity to speak. He could raise a point of order, but not address the Committee again.

The Chairperson asked Mr Oliphant if he had addressed the meeting earlier on.

Mr Oliphant responded that he had.

The Chairperson said that if Mr Oliphant had addressed the meeting before he would not get a second chance to speak.

He said that he would open for a brief discussion, which would be included in the report. Thereafter there would be an adjournment, and at 19h45 the report would be presented. He asked if there was any input from the Members.

Discussion

Ms Visser said considering her investigation into the RLM case, she wanted to bring to the Committee’s attention that the reason for this urgent and desperate call for an intervention was exclusively political. The MEC and COGHSTA had been unhelpful since the current term started in 2016, and the rot was decades old. The MEC was guided by fear of exposure of the extraordinary mismanagement on his watch. The new MM was exposing, addressing and fixing the rot, and the MEC was embarrassed and threatened by the progress.

The MEC had prompted the intervention only when the illegal suspension of the MM had failed. The MEC’s next step had been to remove the newly elected Mayor. This attack on democracy and good governance had been attempted with a disregard for fair disciplinary principles. The MEC and ANC colleagues must at all costs hide the rot in the RLM. Having failed to cover it up, he now wanted to use section 139 to fit his nefarious ends.

In the revised presentation, he had departed from the original motivation in a futile attempt to throw this meeting. All of a sudden, the MM was accused of being a former employee of RSK, which was a lie. She had an affidavit “rubbishing” this nonsense. If the MEC could stoop to this kind of lie, how could the Committee rely on any claim…

The Chairperson interjected, and warned Ms Visser against her choice of language, such as “nonsense” and “rubbish”.

Ms Visser withdrew her statement.

She continued that Adv Manyeneng had said that he had received a collection of letters this morning, and perhaps he had not seen the letters, as the MEC had not seen the issues at the RLM before just now. The letters had been sent earlier regularly. She had neither the time nor inclination to waste valuable government time in dismissing the MEC’s accusations.  

She had a document that spoke to every unsubstantiated claim in the MEC’s motivation, and Members could use the document. She would rather dwell on the successes of the first 50 business days of 2020 before the pandemic interrupted the MM’s extraordinary efforts. The successes included two current account payments to Eskom being made, and a comprehensive strategic plan by financial and engineering experts with possible implications for the entire country being developed.

The Chairperson interjected, and said he wanted to give Ms Visser the platform to address the meeting, but the information she was raising was not in the Committee’s possession. This municipality had been afforded the opportunity to address the Committee, most probably about the information she was presenting, but it was not present. She was not a spokesperson of the RLM, but a Member of the Committee. How fair would the process be if the information Ms Visser presented was not available to others, and the municipality was not present to present the information itself? Ms Visser had to bear this in mind when making her submission. He did not know why Ms Visser had this information, and why other Members were not eligible to obtain the information.

Ms Visser said that the information came from letters sent to the MEC, and the questions that she had asked. She had submitted the information and letters to the Committee Secretary to send to Members afterwards, as she had received them late.

The Chairperson asked when she had sent the letters.

Ms Visser said that she had sent the letters late this afternoon -- around 4pm -- when she had received them. An amount of R300 000 had been allocated for the pension fund, to be paid as soon as specific arrangements were reached to make a second similar payment in October in order to reach sufficient liquidity to service this debt regularly, with a view to balancing the account.

The Chairperson interjected and said that with due respect, he was overruling in so far as Ms Visser addressing the Committee on the letters and matters which were getting to the Committee through the backdoor. She had to address the Committee based the presentation made by the MEC or stakeholders in the meeting, and if she did not do this, other Members would be stopped.

Ms Visser said that if she considered everything that had happened at the RLM since 2011 where there were various acting MMs until 2017, there had been regression. She acknowledged that there were problems in RLM, but said they were historic problems. What had the provincial administration done to assist struggling municipalities? Why had it waited so long before it started acting as decisively as it did? Municipalities could not be turned upside down every time with section 139 (1), but not be restored.

The Chairperson asked if there were other comments.

Mr Sileku said that when addressing section 139 interventions, the Committee had to do its best to ensure that the decision it made would benefit the municipality in question. The Committee should never be used by politicians in municipalities and provincial departments to fight factional battles. Whether section 139(1) was working was questioned.

He had asked a specific question about the political leadership in the RLM, but it had not been answered. The province had to be able answer the question. He thought the problems had started because of the political leadership situation. The Council was comprised of four ANC and three DA members, and one comrade had gone against its party. The current Mayor was an ANC member, and had also turned away from his own organisation because of corruption, which had led to a coalition being formed. He expected the intervening authority to inform the Committee about this. He expected it to inform the Committee that there was no common understanding within the ANC in that particular Council, and that was why the situation was what it was.

Ms S Shaikh (ANC, Limpopo) raised a point of order, and said that the Chairperson had cautioned Ms Visser about how she addressed the meeting and the facts she had raised, but similarly Mr Sileku also had to address what had been presented in the meeting. She found it difficult that other information and insinuations were coming forward.

The Chairperson said the point of order was sustained. He cautioned against presenting information that was unknown to the Committee, and asked Mr Sileku to not present such information.

Mr Sileku said if other Members could find the information about the municipality’s history on Google, it was not his responsibility. Whatever he was saying he had Googled himself, such as the information about the change in mayors. He was not insinuating anything -- he was just saying that there had been a change in leadership.

According to the presentation, there was no arrangement between Eskom and the municipality regarding debt, but there was missing information about how much debt there was in each year, and who had been responsible for accumulating the debt. The councillor had said that the municipality had been paying off the current debt for the last three months -- was the provincial government aware of this, and if not, why not?

Why had the Provincial Government skipped section 139(a) and (b), and gone directly to section 139(c)? Invoking section 139 (c) required extreme circumstances, so why were the other interventions being skipped?

He was saying this because he had served in a municipality in the Overberg before, where the provincial government had gone straight to section 139(c) and had been taken to court for doing this. The court had said that invoking this section was the last resort, and that it had to be demonstrated what had it done to support the municipality before this invocation. The Members had not received such reasons from the provincial government.

He cautioned the Committee about making a decision where it found itself in a position such as in the Overberg.

Mr Motsamai addressed the meeting in the vernacular (2:25:30).

The Chairperson said that Mr Motsamai had said that the RLM had to be dissolved because, in his view, there was no municipality. People needed to be given services and the necessary support, and according to the presentations, this was not happening

Ms Shaikh said that Mr Motsamai had summed up the matter. The presentation from the province had been elaborate and comprehensive. It was unfortunate that Members from the DA had not asked relevant questions. The absence of the Mayor was problematic, and there were protocols in place to inform the appropriate channels about the reasons for his absence, therefore there was no reason why the Mayor was absent. She wanted to concur, based on the presentation, that the RLM was clearly dysfunctional and that there were financial, governance and serious service delivery issues that had to be addressed. She supported the intervention.

The Chairperson said that the municipality had been offered an opportunity to represent itself, but had missed the opportunity for it to present its views on the situation and why it should not be dissolved. The information presented by the Members had to go through proper channels and brought to the Committee’s attention by the RLM so that all Members were aware. All the Members were supporting the dissolution of the municipality, except for the DA, and there was always a lack of cooperation from the municipality in terms of engagement with other stakeholders on issues of governance to ensure that it moved forward.

The Chairperson said it was clear that the RLM was in crisis and had serious financial issues. It seemed that it had failed to submit its annual financial statements. He was also not sure when third party payments had come to a halt, and when this had begun was not clear. The RLM had to be present to indicate what the situation was, and its efforts to attend to the issues.

The Chairperson said that when the intervention was determined, the Committee had to be sure that there were extraordinary circumstances which warranted the dissolution of the municipality. It also had to ensure that when the provincial government did this, it was procedurally and substantively fair. These factors would be considered when the process was taken forward to approve or disapprove the intervention. He had requested more time so that the issue could be dealt with extensively.

The meeting would adjourn for 10 minutes, as he would consult with his staff to finalise the report and present it at 19h55.

Report of the Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlement on Consideration on the notice of Intervention in terms of Section 139 (1) (C) and 139 (5) of the Constitution in Renosterberg Local Municipality

 The Chairperson said that he would present the Report on the RLM and at the end of the day. Presenting the recommendation was what was important.

The Chairperson outlined the Report, which was about the consideration of the intervention notice invoked in the RLM in terms of section 139(1) (c) of the Constitution. The main objective of the meeting was to interact with the internal and external stakeholders of the municipality in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(c) of the Constitution.

Various challenges in the RLM, such as the municipal electrical crisis, the failure of intergovernmental cooperation, administration, and financial and service delivery challenges, were outlined in the report. The opinions of various internal and external stakeholders were outlined in the Report as well.

Recommendations

The NCOP approved the invocation of section 139 (1) (c) and 139 (5) of the Constitution in the Renosterberg Local Municipality. The recommendations for the Northern Cape COGHSTA were outlined, such as ensuring the manager positions were filled in the interim; reviewing, rescinding, and amending all Council resolutions, decisions of the MM and terminating all unlawful appointments of consultants in accordance with the applicable legislative framework; the appointment of a Disciplinary Board; the immediate implementation of the adopted discretionary financial recovery plan by National Treasury and the timeous submission of the section 71 reports in terms of the MFMA and the Municipal Budget Reporting Regulations (MBRR), among other recommendations.

Adoption of the Report

The Chairperson asked if there was a mover for the adoption of the Report.

Ms Shaikh moved the adoption of the Report.

Mr Sileku said that it was the DA’s view that it did not support the intervention, as section 139 (a) and (b) had been skipped before invoking section 139 (c), and the provincial government’s prior interventions were not apparent. A poor municipality would challenge the decision and it would go to court, which would affect the people of Renosterberg. It could turn into a situation like Tshwane, where an intervention had been forced without considering the implications.

Ms Shaikh raised a point of order, and said that the Committee was at the point where the Report was being adopted, but Mr Sileku was trying to present a minority view which could be included in the Report, but not now.  She moved the adoption of the Report.

The Chairperson said that he had given Mr Sileku the chance to speak, as he was expressing the view of the DA on the matter. He asked if Mr Sileku still wanted to speak.

Mr Sileku said he still believed no concrete proof had been given to the Committee on whether the MM or Mayor had actually been invited, because their side of the matter had not been heard.

The Chairperson said that the matter could be followed up. He asked if he was correct that the DA did not support the Report.

Mr Sileku said that the Chairperson was correct.

Ms Shaikh moved the adoption of the Report.  

Mr Motsamai seconded the adoption.

The Report was adopted.

The meeting was adjourned.