Manguang Metro Municipality section 139 intervention

Meeting report

Chairperson's opening remarks

The Chairperson requested that the briefings focus on key issues affecting the Mangaung municipality. The Mangaung Municipality was a high level municipality. The Minister had invoked s 139(5) (a) and (c) of the Constitution in relation to Mangaung municipality in 2019. Section 139(5) was invoked when the provincial government was of the view that the municipality had serious financial problems and was in financial distress, or was unable to pay its creditors or fulfil its financial obligations. It was also invoked when a municipality was unable to develop its own recovery plan. The municipality needed to demonstrate how its financial distress would be stabilised.

He said in 2020 the Committee had visited the Free State and other municipalities, and had made a report. In November last year, there was new leadership elected by the people of Mangaung. There had been a lot of bad media coverage on the Mangaung Municipality -- water issues, litigation issues, and the establishment of a new metro police in that municipality. The Committee had to deliberate on the background of that municipality.

MEC's report

Mr Mxolisi Dukwana, Free State Member of the Executive Council (MEC):  Cooperative Governance and Traditional Affairs, said there were three phases to the stabilisation process -- the rescue, stabilisation and sustainability phases -- which would be discussed in the presentation. He needed to raise a few key issues on the attitude that the Executive Council had developed in engaging with the municipality, especially in view of what was happening in the Mangaung Municipality. The recent developments in the metro, such as the Metro Police and the court action and appointments, the council meeting held on 26 January, and the impact of the council resolutions, would be the issues he would talk about.

He referred to the establishment of the Metro Police and the process that was adopted as far back as 2012 by the municipality and the comprehensive process that was followed to secure the necessary approvals from all relevant authorities, such as the South African Police Service (SAPS). Approvals had been granted subject to ‘suspensive’ conditions such as the number of members in the Metro Police, the expenditure that could be incurred for operations etc.

He said that in 2020, the MEC for Police, Roads and Transport in the province had given the municipality approval to commence with the process of establishing the Metro Police. This was duly gazetted in the preparation of the budget 2021 financial year. The budget for public safety was shifted to the Metro Police to allow for the establishment process. The understanding then was that there would be no additional costs to be incurred, meaning the funds provided then would be kept as such and that the establishment process would be phased in throughout the medium term revenue and expenditure framework. The preliminary process involved the procurement of critical items for the launch as well as the refurbishment of several buildings, branding of equipment and recruitment of personnel.

In the replacement and recruitment of personnel, general council policies were not followed, amongst which was the fact that personnel was appointed without the necessary authorisation by the acting City Manager and the lead EXCO representative. The discrepancy came to the attention of the Acting City Manager, as well as the Treasury in the province. Given the serious allegations the municipality would be faced with, National Treasury had written a letter to the acting City Manager advising that the process of establishing of the Metro Police should be suspended, subject to certain conditions being met, amongst which was a detailed and comprehensive report on the entire process.

On the eve of the launching, the Premier, the MEC himself and the team from the metro had met, and after engagement with the labour unions as well, it had become clear that the processes of the Local Labour Forum LLF had also not been followed through. The union was not happy with what was happening and as a collective, there was an agreement that the launch would not go on until the processes that the union and others were not happy with, were followed to the letter. They had given themselves time for the process to go through the weekend, and all the people involved needed to deal with the matter accordingly, but unfortunately, on the day immediately after the meeting, the Member of the Mayoral Committee (MMC) responsible had gone ahead with the demonstration of the fleet and everything, indicating that it was not necessary for the launch but they were going ahead. This had created a lot of challenges for them, which led to the Deputy President, when visiting the province, directing that they had to address those challenges.

Agreements were reached on the processes that needed to be followed up. These issues created more challenges for them, and were part of what they needed to deal with. All appointments that were supposed to be for the Metro Police were to be rescinded by court order, and all decisions made in relation to the establishment of the Metro Police were to be reversed. Traffic officers who had been elected had to revert to their original positions etc.

The court action on appointments was initiated by the City Manager and filed on 27 October 2021, the matter was heard on 30 November, and the judgment was delivered on 15 December. The Municipality lost the case on the technicality revolving around the appointment of the acting City Manager, in the sense that although the locus standi of the Municipal Manager was under question, in actual fact when he filed the papers on 27 October he was the acting City Manager duly appointed by the council.

Just before the elections last year, it became apparent to the Department that the municipal council was going to the last sitting before the elections, and advised that the municipality ensure that before rising they appointed an acting City Manager or extend the period of the acting City Manager, as his period of acting was ending on the last day of October, just before the elections which were supposed to take place on 4 November. The lack of leadership in the municipal council resulted in this matter not being dealt with as it was supposed to be and left the Department with the option that even though the authority was that of the municipality, the law did not anticipate that there would be a council that would be irresponsible in exercising its responsibility. The municipality had had no permanent City Manager for a period longer than a year, which did not move the leadership of the council to ensure such was effected. This was also the case when the council had to deal with the matter and resolve it, and they had chosen to decide that it was not necessary to appoint the City Manager at the time they were going into the elections.

The Department had taken it upon themselves, with the lead person in the intervention team, to ensure that they extended the period of acting City Manager. The authority did not rest with the Department, but the Municipal Council could not act at the time, and the Department could not allow there to be a municipality without an acting City Manager. The municipality would have gone 21 days without an acting City Manager, and that was the reason behind the decision made by the Department to extend the period of acting with the understanding that when the council was constituted, they would condone or reject the decision of appointment. In the subsequent sittings, after the council was established, the appointment of the acting City Manager was condoned.

He said the court had found that Mr Sello More, the City Manager at the time, was not appointed correctly, and the court decision led to a number of other issues that had resulted in the council sitting because of request from two of its members and the Speaker allowing this to take place. This had led to COGTA taking the matter to court because the Department felt that the Metro Council had acted wrongfully and needed to correct what was happening. That matter had resulted in the decision that was taken by the court at the time, which indicated that the person appointed at the time could not continue doing his responsibilities, and advised the council to sit and appoint an acting person. The first sitting had not materialised because they had received advice that they should not do so because they would have contravened the court order. There had been a meeting, and the current acting City Manager was appointed.

What the Department saw in the municipality was concerning, because of the ongoing bickering that was causing challenges in the municipality. There was a challenge with the leadership in the municipality and the way in which things were being dealt. The Department suggested that the municipality should appoint competent individuals, so the council had gone ahead and appointed the current acting City Manager when they knew that at the month-end, many of the heads of department and the acting City Manager’s contracts would be coming to an end. The Department had written to the municipality a long time ago that these posts should be advertised, and that none of the contracts would be extended.

The Department had tried many ways to intervene, but this had proved difficult. The provincial division had taken a step to engage at the national level regarding the intervention that was needed. A team from National Treasury and COGTA had spent a lot of time interviewing all those who were concerned from COGTA in the province, the provincial treasury, the office of the mayor, the office of the speaker, the council whip, as well as labour and all those they needed to consult. The Department was waiting on the report and recommendations on the report to be served before the Executive Council so that the necessary processes could be followed.

The Chairperson asked if there could be a report on the financials of the municipality and asked that there be a response to section 139(5)(a) and (c) invoked by the Free State provincial government.   

Administrator's report

Mr Thomas Mkaza, Manguang Metro Municipality (MMM) administrator, said that in 2018 the municipality had sat down with National Treasury and crafted a voluntary financial recovery plan. However, the plan was never implemented, and as a result, this had led to the current intervention which was invoked in December 2019, which was intended to take approximately three years to complete in the rescue, stabilisation and sustainability phases.

Among the metro's challenges were:

• Water losses of roughly 41%;
• Aging infrastructure not able to carry sewage;
• The funds for roads were not enough, and more funds were needed;
• Governance was lacking, with some of the Committees not meeting;
• The discipline of management was not impressive; and
• This political instability had caused administrative paralysis and a further deterioration in service delivery

The report could be sent by 21 March.

 Discussion

The Chairperson asked why the report was not available when they knew they would be presenting.

Mr Mxolisi Siyonzana, Executive Mayor of Mangaung, said the MMC of the Treasury was meant to present, but had not been informed of the meeting, nor had the chairperson of the Municipal Public Accounts Committee (MPAC).

The Chairperson asked why they were not invited to address the issues of finance, as the Executive Mayor was supposed to use his discretion as to who had to be present at the meeting to assist in providing the information needed. It could not be the problem of the Committee that the MMC had not been invited.

The Mayor said a presentation had been requested by the Committee, and that there were different offices. The information provided by the MEC had gone back to 2020, including that the municipality was unable to pay Bloem Water. There was the information provided by the Chairperson on the news article regarding problems with the roads infrastructure, service delivery issues, the issue of money the municipality gets as a grant and not being able to use it, and issues of labour and human resources that result in the very high bills, which was a management issue.

Currently, the municipality was able to pay the banks and some other creditors. In terms of collection, as a metro, they were expected to collect at least 85%, and it was currently at 79%. It was true that there were issues of political instability regarding committee meetings, but it was a work in progress. Regarding labour, they would get different letters. A letter had been written by the City Manager, and another by the MMC, which talked about issues of supply chain and labour relations. He had managed to talk to the City Manager as well as the team of the intervention unit to deal with the matter. He had asked for, and received, a report and had advised the MEC about that. The comprehensive report coming later would be given by the acting City Manager. The lack of a permanent City Manager had resulted in instability when it came to progress. He would allow the acting City Manager to give a comprehensive report, and he would follow after him.

Mr Moses Manele, Committee Secretary, said he did not have the City Mayor’s presentation to share with the Members.

The Chairperson asked why the presentation was not available.

The Executive Mayor said he had had an opportunity to speak to the acting City Manager and had indicated what was expected and he had said he was preparing it and the report would be ready.

The Chairperson asked who was in charge of the presentation, and said he did not accept what was happening. The Committee could not be treated like that, and he objected to what had happened. The Mangaung Municipality was one of the top eight municipalities in the country and it should lead by example. It was expected to have a high capacity to perform its functions, and he would not allow the matter to remain the way it was. There was a crisis in the municipality, and all the signs were showing that. Mangaung Municipality was not an exception, and was no different from all the other municipalities.

Ms N Nkosi (ANC, Mpumalanga) said that the Committee felt undermined as the meeting had been meant to sit before, but it had been rescheduled. It was totally unacceptable that the municipality had come to the meeting without any presentation. If the presentations would follow up, what would be their purpose? The presentations should have been provided a long time ago so that the Committee could familiarise itself with them. If the Executive Mayor said the presentation would come after, she did not know what they were thinking about the Committee. Even the excuse made by the Executive Mayor regarding the invitation of the MMC was totally unacceptable. The Executive Mayor was the one leading the municipality, and should know what happened in all the departments, irrespective of the absence of the MMC.

Mr I Sileku (DA, Western Cape) said that having visited Mangaung, one would have expected to see progress after reading the reports and listening to the news. Mangaung was ploughing backwards. The Committee did not want to deal with a situation where there were presentations that were not forwarded to the Members -- how could they make informed decisions to rescue the situation in Mangaung? It was unacceptable. There was no accountability from the Executive Mayor, and no one knew what was expected. The Committee could comment only on the 1 presentation received. He suggested the meeting be postponed, as this was utter disrespect to the Members of Parliament.

Ms C Visser (DA, North West) said all the presentations must be sent, and there must be respect for the Committee’s time.

Mr S Zandamela (EFF, Mpumalanga) said that he was disappointed, especially coming from a mayor who was supposed to be a political head and head of that institution, who could not even account for the people he leads in the municipality. He suggested the Committee needed to meet concerning the events that had transpired today and take a decision.

Mr Mzingisi Nkungwana, acting City Manager, Mangaung, said he had never received an agenda of the meeting. The Executive Mayor had sent him a Whatsapp message saying there was a meeting called by the Committee, and that he needed to prepare himself, but what was meant to be prepared was not communicated. He had made notes to prepare a response on only what had been mentioned in the discussions.

Mr Jimmy Motse, Chairperson, SA Municipal Workers Union (SAMWU), Mangaung, said “you must see what we go through here in Mangaung as labour.” He said what was happening was "nothing." He would have appreciated a contact meeting because they had been expecting to also put their submissions forward so that the Committee could familiarise themselves with what was happening in the municipality. People were “playing poppie huis (doll's house)” in the municipality. He thought that they should also put something forward so that the Committee would go through their submission and compare it to that of the management.

He said the Mangaung house was burning down and the interventions seemed a bit too late. He was concerned that by the next meeting there would not be a municipality of Mangaung as things were deteriorating rapidly -- some of the heads of department (HODs) were leaving, and some were making illegal and ill-informed decisions.  They had met with the COGTA leadership provincially and nationally and were waiting on them to act on dissolving all of the leadership of Mangaung. He agreed to the postponement, saying he was totally dissatisfied. Mangaung needed strong political leadership and administration.

Ms Mathabo Leeto, Chairperson, South African Local Government Association (SALGA), Free State, said the meeting should be postponed, but as SAMWU had mentioned previously, she wondered what was going to happen between now and the next meeting because at a political level there seemed to be instability because there was no unity. Councillors were divided and recently there had been suspensions. The deployed member who had just spoken had been reliably informed that he was also suspended while being seconded for intervention. If the meeting would be postponed, then it should reconvene as soon as possible because the municipality was on the verge of collapsing.

Chairperson's comments

The Chairperson said he was unhappy with the development. They had to ensure that the Committee worked together with the municipality to resolve the problems affecting Mangaung. What had happened in the meeting was exactly what was being written in newspaper reports about the Mangaung municipality. The municipality was a cause of concern to the Committee. The national government had advised the provincial government to invoke section 139(5)(a) and (c) of the Constitution because of the persistent problems in the municipality. The provincial government had done so around December 2019. There had been a big discussion on whether the notice had been served in relation to the invocation of s 139(5) of the Constitution. Be that as it may, the Committee had interacted with the municipality and the National Council of Provinces (NCOP) had approved the intervention. Subsequent to that approval they had visited the municipality and the NCOP had reported that there were serious problems that needed attention. He had thought that with the ushering in of a new council, the situation would be okay. The council was only four months old, but was characterised by so many problems which showed that the situation was far from improving and in fact had worsened.

He said the municipal managers, heads of departments, city managers and the entire municipal situation had to fully explain why the process of the establishment of the Metro Police had been started in the manner in which it was started. There needed to be an explanation that should include the appointments and commitments that had been made that had resulted in the expenditures incurred, despite there being no improvements made.  The municipality made totally fruitless expenditure because it was money that was going down the drain without any accountability, and therefore without any consequences for those who were responsible.

Because the municipality’s actions were all over the media, the current situation was "extremely boring." The concern of the Committee was to ensure that the municipality was stable. The Committee felt vindicated. He thanked the Members who were present on a Friday, because they had honoured the commitment of engaging with the Mangaung municipality. The meeting had been intended to take place on Tuesday, having been communicated with all the parties a week previously. The documents should be sent, and if not there would be strong action taken because the Committee needed to prepare themselves, as they took their job very seriously. If the municipality did not take their jobs seriously, the Committee certainly took their jobs seriously, and wanted to prepare to engage with the municipality in a fruitful way that inspired confidence so that the current problems could be resolved. The meeting had been postponed so that the municipality could prepare, but to the disappointment of the Committee, the situation had stayed the same.

Analysing the situation, the problems seemed much deeper and worse than they appeared. The meeting needed to be postponed to next week, and even if it took place very late in the evening, it needed to happen and the Committee would intervene. If the Provincial Government was going to fail to intervene decisively in the way it was expected to intervene, the Committee had the power to recommend to the Minister to invoke s 139(7) of the Constitution, which stipulated that if the Provincial Government was unable or disabled to perform its functions to intervene in a municipality’s functions that were deteriorating, such as this municipality, the Minister would have to take the measure of recommending its dissolution as part of resolving the problems in the municipality. This was a decision that the Committee would not take lightly, but at the same time, it was something that could be done, considering the best interests of the people of Mangaung, who expect service delivery. In the best interests of their welfare aspirations, and what they wanted to see happen in the Mangaung municipality, he warned that the Committee would take this action "without a blink."

The view of the Committee was that the people elected were "playing marbles" and were playing with their livelihood in not wanting to render the services as committed, so the Committee would have no other option but to make such an intervention. He requested the municipality to be present at the follow-up meeting the following week. All the presentations would be taken afresh, taking into consideration the fact that the MEC for COGTA had already done his part and presented in respect of the situation regarding the municipal manager and the Metro Police. There needed to be a presentation from the Department of Treasury that must entail progress after the invocation of s 139(5) (a) and (c) of the Constitution.

He said this was important, because when the Department had intervened in the way it did, it was because there was a persistent financial deterioration and the municipality could not fulfil its executive obligations from a financial point of view. The Department had seen that the municipality could not reconcile its own finances and did not have a financial recovery plan, and had imposed a financial recovery plan to stabilise the situation. The report of the Auditor-General (AG) could be mentioned, which had indicated how the situation had deteriorated, with issues of corruption in the municipality that had resulted in it being unable to pay Eskom's electricity utility bill, and the fact of the matter was that the section had been imposed because of that. The Committee needed to hear from the provincial treasury what the current situation was, and that situation must speak to figures -- the rands and cents. The municipality needed to provide a presentation on the intervention of s 139(5) of the Constitution in relation to its finances.

He said the report needed to be full and comprehensive on the state of affairs of the municipality. The report must detail the political functions, so that the Committee knew whether the council functioned well or not, what the relationships between the different offices were, and for issues of governance, whether s79 or s80 committees were in place and their functions. They needed information on whether other related committee councils were in place and if they were functional; whether the council was able to sit regularly and what the dates were on which the council was sitting; and whether there was interference from anybody in relation to the appointment of staff or service providers in terms of the supply chain management. The municipality needed to speak on the financial management of council in terms of its budget or adjustment budget regarding its expenditure patterns, collection of revenue, and all related issues to financial management.

Service delivery issues also needed to be addressed. He asked what the municipal projects were and how it implemented these projects, and the problems of water in the area, road infrastructure, including potholes, sewage spillages, housing and other related infrastructure -- all issues pertaining to service delivery must be encapsulated in the report.

The municipality needed to engage the Committee on its relation to the current intervention by the provincial government. SALGA needed to share its experiences with the municipality and whether in its view the municipality was functioning well, and how SALGA was continually strengthening the capacity of the municipality for it to perform its function. What was the view of SALGA on the Mangaung municipality in comparison with other municipalities in Free State? The same was expected from SAMWU, including a report of whether the LLF was functioning and if the unions were consulted on matters of importance. There needed to be a proper relationship between the municipality, administration and the unions.

Mr Z Mkiva (ANC, Eastern Cape) suggested an urgent meeting was needed so that the Committee could make an informed decision, because they were receiving information in sketchy dribs and drabs. As the Chairperson had mentioned, the Mangaung municipality was important because it was a leading municipality and should be leading by example. He said if the leading municipality were to fall apart, it would be easier for the other municipalities to do the same. He advised the Executive Mayor not to rely on other people when he was meant to present to the Committee on what was happening in the municipality so that he could also contribute to resolving certain issues, and so that the Committee could make an informed decision going forward. There should be an objective outline of what was happening on the ground. The mayor needed to give a true picture of what was happening, because the Committee smelled a rat.

Ms Nkosi said that at the meeting next week, she did not expect people to point fingers at one another or be involved in cover-ups, and she wanted no excuses.

Mr Siyonzana, the Executive Mayor, said the confusion was due to the invitation, as it had said nothing about the municipality making a presentation. On Tuesday, when he had called the Chairperson and wanted to know about the meeting, the Chairperson had said the meeting was postponed and indicated that the municipality must just prepare itself. The way the Chairperson had now broken down what was expected, the municipality knew what to expect. He had not undermined the Committee, nor had he intended to do so. The presentations would be ready by Tuesday and would be sent to the Committee, SALGA, and COGTA.

The Chairperson noted the apology, and said there was a standard format used. If a municipality received an invitation, they should know that presentations had to be made, and that they should not appear without preparing anything.

Ms Nomvula Kwalepe, acting Municipal Manager, Mangaung, said there was now a clear picture, and said that the presentation would appear as such.

Ms Mapaseka Nkoane, Executive Deputy Mayor, Mangaung, said she had been informed only at 1pm.

The Chairperson accepted her apology.

Mr Motse suggested a contact meeting, as SAMWU lacked the resources to attend the meeting. Maybe the municipality had thought that it would be a "braai meeting," because even SAMWU knew there would be presentations and had been prepared.

The Chairperson said that he did not mind arranging to come to Mangaung after the meeting next week.

Ms Stefani Lockman-Naidoo, Speaker, Mangaung Metro Municipality, said the municipality was 85% new, and had been plagued with ten years of bad leadership and decision making, so the synopsis would assist it.

The Chairperson said there should be one report coming from the municipality, and everyone could be present in case they wanted to make additions.

The meeting was adjourned.