Metsimaholo Municipality section 139 intervention: engagement with internal and external stakeholders

Meeting report

Opening Remarks by the Chairperson
The Chairperson opened the virtual meeting and welcomed the Free State MEC for Cooperative Governance and Traditional Affairs (CoGTA) and the delegation from the Department, as well as representatives from the South African Local Government Association (SALGA) and the internal and external stakeholders from the Metsimaholo Local Municipality to the meeting.

He said that around February 2020, the provincial executive committee (EXCO) of the Free State invoked section 139(1)(b) of the Constitution in Metsimaholo Local Municipality. According to the provincial government, there were persistent problems in the municipality that led to the invocation of the intervention. There are two key stakeholders that must be involved in the invocation of the intervention, one being the Minister of CoGTA and the other being the National Council of Provinces (NCOP). According to the provincial government, the Minister received a notice of the intervention, and the Minister intervened by approving the intervention. The Chairperson said that the NCOP was not convinced that the municipality had followed all the processes, including the timeframes in their invocation of the intervention, and as a result, they did not approve the intervention. In terms of the law, once the NCOP disapproves an intervention, it means that an intervention cannot continue.

He said that the Committee was told that the provincial Executive Council, led by the Premier of the province, met on the 10 December in 2020, where a decision was taken to place Metsimaholo Municipality under the section 139(1)(b) intervention again, and they resolved that that they would re-table the process to the NCOP and the Minister. The NCOP was informed on 23 December 2020, which was okay. “Now we are at the point where we need to take a decision whether we approve the intervention or not”, he said.

He asked the MEC of CoGTA in the Free State to provide a five-minute summary of the reasons that they gave the Committee for the re-tabling of the intervention to Metsimaholo Municipality in order to provide context to the internal and external stakeholders for the purpose of the meeting. He said that any internal and external stakeholders available in the meeting, including political parties and trade unions would be also allowed five minutes to state their position in terms of whether they approve the intervention or not. He added that the Committee would deliberate on its own based on the assessment of the comments from the different stakeholders and then take a decision on whether they approve or disapprove the intervention.

Briefing by the CoGTA MEC
Mr Thembeni Nxangisa, MEC: Free State COGTA, said that in his presentation in the previous week, he made reference to section 160 of the Constitution of the Republic of South Africa, which enjoins that, among other things, a Municipal Council:

makes decisions concerning the exercise of all the powers and the performance of all the functions of the municipality; and

(d) may employ personnel that are necessary for the effective performance of its functions’’

He said that he also made reference to section 56 of the Municipal Systems Act, which expands on the above points by addressing the appointment of managers directly accountable to the Municipal Manager (MM). He added that the Metsimaholo Council, since its election in 2017, has not appointed such managers. To make matters worse, the Municipal Manager was placed on suspension on 03 July 2018 and the municipality has operated for some time with middle managers acting as section 56 managers and even acting Municipal Manager and Accounting Officer.

The municipality’s policy on acting appointments bars the appointment of anyone appointed below the level of senior manager to act as an MM. “Clearly the practice in Metsimaholo was in contravention of the Constitution and at least two very important pieces of legislation, the Systems Act and the Municipal Finance Management Act, including the Municipality’s own policy on acting appointments”, he added.

He said that in trying to resolve the impasse, the Department seconded an official to support the municipality as its acting Municipal Manager, in terms of section 154 of the Constitution, and he was duly appointed by the Executive Mayor for a period of three months from 18 November 2020. His work was made very difficult by some officials who wanted the abnormal practice of appointing people against the municipality’s own policies to continue, even going to the courts, supported by some councillors. A Council meeting on 09 December 2019, which was going to consider, inter alia, a report on the filling of the vacant positions of senior managers, was disrupted. The contract of the official seconded to and subsequently appointed as the acting Municipal Manager came to an end on 17 February 2021.

The EXCO invoked section 139(1)(b) of the Constitution in the affairs of the Metsimaholo Local Municipality in its meeting of 11 February 2020, and on 20 February 2020, the Department went to the Metsimaholo Local Municipality to communicate the EXCO resolution of 11 February 2020. Communication with the NCOP, the Minister and the Free State Legislature was signed on 25 February 2020 and dispatched to the different stakeholders. He requested the Committee to note that even the section 139 was contested by some within the Municipal Council and its administration, and in that regard, the Department approached the Free State High Court to set aside the Council meeting that took place after they had communicated the EXCO resolution to the municipal council and its resolutions. The High Court ruled in favour of the Department and declared the municipality duly under administration at the end of August 2020. In October 2020, the Free State NCOP delegation invited the Department and the leadership of the municipality to make a presentation before them. The NCOP delegation was unanimous on the need for the Department to expedite the appointment of the senior managers and to resolve the protracted legal matter between the municipality and the municipal manager.

Although the appointment of senior managers was one of the substantive matters of the intervention, in November 2020, the intervention team prepared a roadmap for the appointment of the senior managers for consideration by the Municipal Council. When the Municipal Council refused to cooperate on this matter, the intervention team approached the MEC, in line with the terms of reference and particularly, clause (viii) of his appointment letter, which basically gives the EXCO Representative the power to appoint senior managers in such instances. A report was submitted to EXCO on 10 December 2020 for EXCO to, inter alia:

Confirm the intervention in the affairs of the Metsimaholo Local Municipality in terms of s139(1)(b) of the Constitution of the Republic of South Africa (Act 108 0f 1996) as amended;
Mandate the EXCO representative to uplift the suspension of the Municipal Manager; and
Note that the recruitment and selection process for the positions of senior managers has been kick-started.
 
It is on the basis of the first resolution in the above-mentioned bullet that Free State CoGTA is re-tabling the intervention before the Select Committee.

He said that the following issues were raised as substantive matters at the time the municipality was initially placed under intervention on 11 February 2020:
Scheduling of Council meetings, but eventually abandoned;
Vacant positions of senior managers from 31 December 2017 (three positions), 01 June 2018 (one position) and 31st August 2018;
Alleged political interference;
Regression in audit outcomes;
Regression in governance oversight;
Deterioration in systems of internal controls;
High concerns on financial viability; and
Areas of high concerns and possible irregularities

In conclusion, he said that the Department wants to continue the intervention in Metsimaholo Local Municipality at least until October 2021, despite the notable progress in terms of the following:
Council meetings are sitting as scheduled and disposing of matters;
Informal Council meeting convened and sat on 18 May 2021;
Council meeting sat on 31 May 2021 and duly adopted the budget;
The filling of positions of senior managers is at an advanced stage, with some of them beginning with their duties now in June 2021 and others anticipated to start from 01 July 2021;
The suspension of the municipal manager from 03 August 2018, with full pay, was uplifted with effect from 08 January 2021; and
The audit outcome is a qualification for the year 2019/2020.

He said that this is to finalise the filling of the vacant senior manager positions, which is already at an advance stage at the moment. He said that the Department is convinced that the other substantive matters can be addressed through the appointment of senior managers. A further progress report, as promised, will be submitted to all stakeholders, including the Select Committee. 

Input by internal and external stakeholders
The Chairperson invited the internal and external stakeholders to state their positions on the re-tabling of the intervention, starting with political parties and the Trade Unions.

Mr April Motaung, representing Economic Freedom Fighters (EFF) in Metsimaholo Municipality, said that their position is that they are rejecting the section 139(1)(b) intervention. He said that the intervention came into the municipality overnight, and as councillors, they rejected it because the MEC started by seconding an official as a Municipal Manager without the approval of a council resolution. “We indicated to the MEC that what he was doing was not in line with the laws applicable for local government and instead of correcting the mess that he had done, he tabled the section 139 intervention”, he said. He added that they requested the MEC to point them to any municipality in the Free State that was assisted by the section 139 intervention. The MEC failed to explain the reasons to invoke the intervention to the Council of Metsimaholo.

He said that it is not true that Council meetings were not sitting because Metsimaholo is a multi-party Council, and government as well as the MEC refuse to accept the nature of the municipality. He said that it is not true that council meetings are not attended, as the Council debates every day on issues that are in the best interest of the people of Metsimaholo.

Mr MJ Kekana, representing the Forum for Service Delivery (F4SD), said that they reject the section 139 intervention in Metsimaholo because there are less than 120 days before the elections, and that will deny the current council that is sitting to wrap up its affairs and help the municipality in transitioning to the new administration. He said that since the reinstatement of the Municipal Manager there is stability in the municipality and the MEC rightfully said that there are improvements, with the municipality also receiving a qualified audit report. They do not see the need for an intervention in the municipality, as the improvements are visible. He added that in the municipality, they have the PMS, whereby the political parties meet and discuss the issues that arise in the municipality, which is why there is stability. He said that the acting Municipal Managers and Administrators that were brought in are the ones that caused problems in the municipality because they worked against the Council and everyone in order to serve their selfish interests.

Mr Lebohang Semonyo, representing the South African Communist Party (SACP), said that what Mr Motaung and Mr Kekana said is not true. He said that the council meetings stopped sitting because of the EFF in several occasions. He added that the EFF did not attend council meetings for a period of six months and nothing was done about that. The report was brought to Council and Council expected the report to have been served in the office of the MEC to indicate that the councillors did not attend council meetings without even handing in an apology. He said that things are definitely not normal in the municipality. He said that the EFF Councillors have been illegally issuing sites at Mooidraai, as the decision of Council did not allow them to do so. They entered the municipality and attacked the workers of the municipality claiming that the municipality does not have a Council. He said that the SACP support the intervention.

Mr Theo du Toit, representing the Freedom Front Plus (FF+), said that he rejected the intervention right from the beginning and the MEC told him that he has made up his mind that he is putting the municipality under the intervention. He said that his argument was that everybody in the municipality is just doing their bit and is doing their work as per their job descriptions and that they do not need intervention from government or section 139 administrators. He said that two administrators were placed in Sasolburg and the Municipal Manager was reinstated and then there were no directors, which was the doing of the ANC. He added that the R27 million, which was not spent by the administrators, was sent back to the government; the municipality is currently in a downward spiral that is second to none.

Mr Jack Malindi, representing the African Independent Congress (AIC), said that in the beginning of 2018 to 2019, the municipality had a major challenge in that council meetings were not taking place and for that reason, the municipality was failing to provide service delivery. He said that they sober-mindedly asked for provincial intervention in the municipality because of the challenges that they were facing. He said that the problems in the municipality were not solved through the initial intervention as they had hoped, and the provincial government should have solved the issues and left the municipality to deal with its own problems. They were here to appoint the senior managers and they have not done that. He said that the provincial intervention was needed before and it failed.

Mr Vuyo Mashiya, representing the Metsimaholo Community Association (MCA), said that the Council of Metsimaholo in the year 2019 requested support from provincial government. It is the Council resolution that led to the move by the province to send a person who was going to assist in terms of capacity enhancement in the municipality. In the process, it happened that for the support that was requested from the province, some measures were taken by certain political parties to ensure that the support function does not get to see the light of day, which ultimately then led to a number of problems, including failure to appoint directors and failure for expenditure on municipal infrastructure grants, etc. There was also the issue of the nonattendance of council meetings. The intervention happened in 2020, and the municipality is now at the stage where it is at the completion of the appointment of senior managers; the MCA feels that for the intervention to come in, it must have been as a result of failure by Council to meet certain executive obligations. He said that the MCA are in support of the intervention with the particular imperative of ensuring that senior managers are appointed and once that particular process is done and whatever other imperative is done, it should be then that the provincial department can then step back.

Mr Jacques Barnard, representing the Democratic Alliance (DA), said that the DA also rejected the intervention. He said that it is not true that the council meetings were not being attended in the municipality, as the MEC had said. He recalled the day in which the MEC went to Metsimaholo to inform the Council about the intervention, where they specifically asked him about the terms of reference, and he could not give them answers. He said that they also asked him whether he notified the NCOP and the Minister of COGTA and he could not answer because the speaker adjourned the meeting before the questions could be answered. “It is untrue what they say about the council meetings, and I think it is a very poor performance from the MEC to ask for another intervention because they did not complete the task which they were set out to do”, he added.

Mr Lucas Fisher, representing the African National Congress (ANC), said that it was the ANC who requested assistance from the MEC in seconding an official to the municipality to provide support. He said that as councillors, they thought that the provincial government would send them an official to assist the municipality where it was lacking, but it turned out differently because the council never thought that the person that was seconded would also become the Municipal Manager. That is where the conflict started and also why there was a case between the Municipal Council and the MEC. He added that it is also contrary that the MEC is said that the Municipal Council appointed middle managers to act as section 56 managers because even today, the administration has appointed the same managers that the municipality were told were unqualified to become section 56 managers. He said that they are not even sure that when under the section 139 intervention, there is no regard for all other laws in the country. He said that the regulations are clear on how to go about appointing senior managers in a municipality and in this process, Municipal Councils and councillors were not involved and not even part of the process of appointing senior managers. He added that they do have a recommendation for the positions and council was supposed to sit last week Friday, but it was called off. Mr Fisher said that they are not sure who should be responsible for appointing senior managers in the municipality, as they were told that they would not be involved at first, but now the problem is being pointed at them to say that they have not appointed the managers. He also added that they support the intervention, nevertheless.

Mr Tiisetso Mahlatsi, representing the South African Municipal Workers’ Union (SAMWU), said that one of the pointers that need to be highlighted when placing a municipality under the section 139(1)(b) intervention is governance, which includes political infighting, conflict in top management, as well as the financial implications and service delivery implications. He said that governance in the municipality remains vulnerable and compromises proper service delivery to communities and the labour stability in any institution. He added that the Metsimaholo Municipality remains fragile because of the political collision and the presence of the section 139 intervention has assisted in creating stability at some point in the municipality. He said that SAMWU believes that it would be too early to withdraw the intervention from the municipality at the moment because there are issues that still need to be addressed, including the filling of senior management vacancies, which need to be prioritized. If the intervention is withdrawn, this will redress all the progress that has been made thus far, and the municipality could possibly go back to the situation it was in back in 2019. The intervention must conclude its work and ensure that there is proper provision of service delivery and that there is capacity in the administration of the municipality. He said that if there is one thing that they would want to highlight from COGTA is that their monitoring process is very weak and causes the intervention to be questionable. The resources that they provide in municipalities that they place under intervention need to improve as well as the reporting intervals, so that they can monitor and ensure progress.

Discussion
The Chairperson asked the Members of the Committee to ask clarity seeking questions from the MEC as well as any of the stakeholders who participated, so that the Committee could be able to make informed decisions during the its deliberation on the intervention.

Ms C Visser (DA, North West) wanted to know about the executive obligations of the municipality and whether it had tabled a budget for the intervention. She also asked if the budget is funded and whether the Asset Register and IDP (Internet Development Planning) as well as other relevant documents were tabled in council. She asked whether they have regular Council meetings and portfolio meetings and if they do not have the meetings; she wanted to know the reasons for that and the political parties that contribute to breaking up or not attending meetings and that are not complying with and statutory obligations.

She asked whether the municipality collects revenue and whether it delivers services to its people. She also wanted to know whether their water and sanitation services are functioning in the municipality, as well as the percentage revenue collection of the municipality. Lastly, she asked if the municipality has any administrative challenges in terms of electricity and other problems.

Ms Lindiwe Tshongwe, Executive Mayor, Metsimaholo Local Municipality, said that they approved the budget on 31 May 2021 and it is not a funded budget, but they also approved a recovery plan in ensuring that they increase their revenue collection. She said that the municipality has referred back the SDB because they are on the verge of appointing senior managers, as they want to enter into the SDB contract with the newly appointed senior managers in the municipality. She added that the municipality still have a time to appoint the managers as well as approve the SDB, as their budget is starting on the on the 01 July 2021. Lastly, she said that the municipality is sitting at 68% of revenue collection and also adopted the IDP on the 31 May 2021.

Mr I Sileku (DA, Western Cape) asked for clarity on whether the municipality had been doing well before the administrator or if they have been doing well due to the assistance given to them by the administrator. He also asked for clarity about the support team that was seconded by province. He wanted to know the number of people that have been seconded by the provincial department that have been shortlisted for the senior positions.

Responses
Mr Fisher said that the municipality has been doing well since that administration team arrived. There has been some stability unlike before, when there were a lot of arguments and council meetings not sitting. He said that the stability in the municipality is caused by the fact that they have the tools to stabilise the municipality, as they were sidelined before. He added that the meetings that are currently sitting in the municipality are only compliance meetings, budget meetings and other meetings where they are forced to comply by law, but the last ordinary Council sitting was earlier this year, around January or February. He said that the director that formed part of the team that was seconded to the municipality has been shortlisted for the CFO position as well as the current acting CFO.

Mr Kekana said that it is not true that the municipality was not doing well before the administration because all the issues in the municipality started after the administrators came to the municipality. The administrators brought a lot of confusion whereby some of them were administrators then they were Municipal Managers, and some of them developed a lot of interest in the advertised positions. Administrators caused a lot of confusion because a majority of them came to capture the municipality in terms of the appointment of the directors and there is evidence to that, as indicated by Mr Fisher. The Municipal Manager was also doing well until he was suspended, and now that he is back, there is stability again in the municipality.

The Chairperson wanted to know from the MEC whether the allegations that the administrator that provincial CoGTA sent to Metsimaholo later became an acting Municipal Manager are true.

MEC Nxangisa said that it is true that Council appointed the administrator to be the acting Municipal Manager, and this was in October 2019, where Council took a decision after there was a vote of 22 versus 19 and one apology. He said that, at that time, the municipality was not under administration but on the support of section 154.

The Chairperson said that irrespective of the Council decision, that appointment was unlawful.

MEC Nxangisa said it was not unlawful. He added that when an official is offered to a municipality under section 154, the municipality can utilise the person in terms of skills capacity and efficiency to advance and implement its decisions properly. He said that it is not inappropriate that they decided to elect that person as acting Municipal Manager (MM).

The Chairperson said that section 154 means that the provincial government is supporting a municipality and part of that is by giving the municipality resources or seconding officials and strengthening the capacity of a municipality to do its work. As such, provincial government sending an official to assist the municipality, with the official becoming an Accounting Officer, is not permissible”.

MEC Nxangisa said that he does not see any illegality around the issue.

The Chairperson asked the MEC to clarify how this is not illegal, because his understanding of the issue is different.

MEC Nxangisa said that this was not illegal and added that the Council has a right to take the decision as the highest decision-making institution in the municipality. Many municipalities, especially in the Free State, do not even have the capacity to draw special skills; maybe other people do not even favour going to remote areas and in such instances, the provincial department has been able to support people through section 154. If the municipality decides that they would like to use the capacity that they have been given by the provincial department in a different way until the municipality has appointed the right person for that position, it has the right to do so.

The Chairperson said that there is no need to justify on the behalf of the municipality, as the Committee will have an opportunity to deliberate on the matter. He said that he wanted to get clarity from the MEC that an official of the provincial government, who was in the payroll of the provincial government was deployed in the municipality to support the municipality in terms of section 154 of the Constitution, and the municipal council decided through a vote that the person is good enough to become an acting Municipal Manager.

MEC Nxangisa agreed with the Chairperson and said that he understands the situation correctly. He said that he wants to persuade the Chairperson to take it as that it is still support from the provincial department even if they used that person in a different capacity.

The Chairperson wanted to know if it is true that the team that the MEC seconded to the municipality also applied for senior positions in the municipality and if it is true, he wanted to know the number of the officials.

MEC Nxangisa said that it is true and added that it is two of them out of a team of six.

The Chairperson asked for clarity from the ANC representative on how they requested section 154 support from the provincial department and, instead, received a section 139(1) (b) intervention.

Mr Fisher said that there is a letter that came from the MEC instructing them that he is appointing an acting Municipal Manager of the municipality. He said that the way that the MEC explained the issue to the Chairperson is as if it was the council that took the decision, which is not true. He added that there is evidence of the MEC instructing the council to appoint the official as a Municipal Manager of Metsimaholo Local Municipality.

The Chairperson asked for a step-by-step explanation on how they requested section 154 and ended up receiving a section 139(1)(b) intervention.

Mr Fisher said that they requested support and after they received an instruction to appoint the acting Municipal Manager, the MEC then said because they are refusing section 154, he is invoking section 139(1)(b) of the Constitution. Section 139 did not come as an option but rather as a punishment for refusing 154.  

The Chairperson asked if the ANC is happy with section 139.

Mr Fisher said that he is happy with some of the improvements that came with the section 139 intervention, which is why they support it.
 
Mr Thabo Sehlabo, Speaker, Metsimaholo Local Municipality, said that it is true that the municipal council requested support from the MEC and were direct that they need a person that can fill the position of the acting Municipal Manager, because at the time, the municipality did not have directors. In terms of the policy of the municipality, to become an acting Municipal Manager, one has to be one level lower from a director’s position. The MEC responded to the municipality by giving them the official, of which they took the issue to Council, where the vote happened, and 21 Councillors agreed that the official can be the acting MM. He said that the official was not imposed to the Municipal Council and that they voted him as the acting MM.

Mr Semonyo agreed that they made the decision themselves and it was not imposed by the MEC.

Mr Sileku asked for clarity on whether it was before or after the suspension of the Municipal Manager when the acting administrator was appointed as the MM in terms section 154.

Mr Sehlabo said that it was after the Municipal Manager was suspended.

The Chairperson wanted to know whether the official who was seconded to the municipality as an acting MM stopped all his duties as an acting MM when the municipality came under the section 139 intervention.

Mr Sehlabo said that he stopped all his duties as a MM when the one who was suspended was reinstated.

The Chairperson allowed a ten-minute break for the Members; he then allowed the internal and external stakeholders, as well as the MEC and the different delegations, to exit the meeting if they wished to do so, as the Committee was going to deliberate on its own whether they approve or disapprove they intervention.

The meeting was reconvened at 16:00

Committee Deliberations
The Chairperson said that the meeting would resume at 16:30, as the Committee Secretariat did not complete compiling the Committee report. The Committee would deliberate after the Secretariat was done.

Ms N Nkosi (ANC, Mpumalanga) agreed with the Chairperson.

Upon the resumption of the meeting, the Committee Secretariat was struggling with connection due to load shedding and could not upload the Committee report to assist the Committee with the deliberation on the re-tabling of the section 139(1) (b) of the Constitution in the Metsimaholo Local Municipality.

The Chairperson decided that the Committee will continue its deliberation on the matter on Tuesday, after the engagement with KZN, and a decision would be made then on whether the Committee approves or disapproves of the intervention on Metsimaholo Local Municipality.

The meeting was adjourned.