SALGA, CRL Rights Commission & MDB 2023/24 Annual Performance Plans

Meeting report

SALGA 2023/2024 Annual Performance Plan (APP)

Mr Lance Joel, Chief Operations Officer (COO), South African Local Government Association (SALGA), said the programmes that informed its annual performance plan APP were:

• Advocacy and strategic profiling;
• Multisectoral support programme;
• Employment relations and capacity building programme;
• Business and product development; and
• Administration.

Mr Joel said SALGA remained financially dependent on municipalities. Total revenue was projected at R866 million, while the medium-term estimate for 2024/2025 was R904 million. Total expenses were projected at R865.5 million, while the medium-term estimate for 2024/2025 was R903.3 million.

SALGA had looked into alternative revenue-generating opportunities to run independently of municipalities that were financially constrained.

Referring to highlights of the 2022/23 financial year, he said municipalities with disclaimed audit opinions had shown little improvement. 20 municipalities were repeat disclaimers, nine municipalities had moved out of a disclaimed opinion from the previous year, and 22 municipalities had material irregularities.

The core challenge in the 2023/24 financial year was that local governments were inadequately equipped to fulfil their developmental agenda. The causes of the core problem were:

• Poor political leadership capacity and weak administrative management;
• Inefficient and non-integrated local government delivery mechanisms, systems, and processes to enable service delivery;
• Ineffective utilisation of financial resources (poor financial administration) and an inability to collect revenue, and insufficient fiscus allocation; and
• Degenerating infrastructure and non-existent or poor services provided to local communities

[See attached APP for details]

Discussion

Ms H Mkhaliphi (EFF) said SALGA had failed to carry out its constitutional role and mandate, and it was frustrating to see municipalities collapse. Since SALGA had requested financial resources, how would it turn things around? South Africans were experiencing a water crisis, and water outage complaints were often received on water tankers selectively servicing certain wards over others. With SALGA’s internal challenges, how would needy communities be supported?

How would SALGA perform its mandate of regulating the relationship between members and employees in the context of Section 213 of the Amended Labour Relations Act No. 66 of 1995, when it had no intention of resolving the long-standing matter with the South African Local Government Bargaining Council (SALGBC)? She was confused and frustrated with SALGA's role in the SALGBC, and the employees' continuous complaints against one entity. Concerns were not raised because the Committee “was bored,” but because a resolution was needed.

How would the mandate of providing multi-disciplinary support -- specifically financial support to local government -- be achieved when there were complaints about the insufficient allocation of financial resources from the government?

Ms E Spies (DA) asked if a platform existed for municipal entities to work collaboratively on finding solutions to municipal challenges. Upon identifying dysfunctional municipalities, were sessions held on putting together a multi-entity specific municipal support and intervention plan (MSIP) that included the roles of SALGA, the Municipal Infrastructure Support Agency (MISA), etc.? Entities were encouraged not to work in silos.

When municipalities failed to implement their recovery plans, did SALGA have an intervention programme or did it just wait to report the matter in the next APP? The Committee was frustrated because it continuously had the same questions, and SALGA gave the same fruitless answers while still requesting financial resources.

Mr G Mpumza (ANC) said SALGA intended to enhance its original model to address its inadequate influence, bring about changes, and improve the image of local government. What did the enhancement entail in practice?

What was SALGA's position on the Department of Cooperative Governance and Traditional Affairs (COGTA) intention, as per its 2023/24 APP, of assisting the National Treasury to cover Eskom's debt of R400 billion by revoking the supply licences of indebted municipalities?

Given SALGA's financial difficulties, would it achieve its goal of having an agile influence in transforming the local government? Would SALGA's proposed organisational approach tackle the political toxicity which gave rise to malice in local government?

Ms D Direko (ANC) said SALGA's programmes for delivery in the APP showed many progressive programmes that could bring about changes in local government. However, that was not the reality of the municipalities, as they constantly deteriorated. Some of the municipal challenges highlighted had existed for several years and were repetitively mentioned. Based on the presented APP, was SALGA confident that it could improve the state of municipalities? In total, 64 municipalities were considered to be hotspots, and perhaps if SALGA focused on improving a small group of municipalities over a specified timeframe, there would be tangible results. SALGA would then be able to measure its progress and reflect on its efforts and challenges in the next financial year.

The lack of financial resources was a recurring issue in all government departments. Were there municipalities that owed SALGA, as it was partially funded by them? What was the payment arrangement for outstanding balances, and did it work?

SALGA's response

Mr Xola Pakati, Deputy President of SALGA, said the political toxicity in municipalities was above SALGA's comprehension. The problem was the political leadership's lack of political will to resolve challenges at the municipal level. There was an expectation that from its budget, SALGA would provide water and electricity to the same communities and government departments that were unable to pay municipalities. Municipalities were then unable to repay Eskom. SALGA's role in the capacitation of municipalities was an ongoing responsibility that was continuously addressed.

Mr Joel said the assessment performed by SALGA prior to the previous election provided evidence of the work it had performed in building the capacity of councillors over a five-year period. During the candidate identification process of the elections, political parties were requested to elect determined and competent candidates to run as proportional representatives (PR) and ward councillors to solve the municipalities' lack of leadership. The high turnover rate of councillors was a dominant issue because, in the previous election, seven out of ten councillors who benefited from SALGA's integrated councillor induction programme (ICIP) had left. Yet another costly investment had to be made in developing the seven newly appointed councillors through the ICIP and portfolio-based inductions. After the election, significant difficulties were experienced at the political leadership level across numerous municipalities. The system was not assisting SALGA in executing its capacity-building programme.

The South African Local Government Bargaining Council (SALGBC) consisted of SALGA as the employing body, the South African Municipal Workers Union (SAMWU), and the Independent Municipal and Allied Trade Unions (IMATU). He clarified that the SALGBC was not a SALGA structure. The matter had been presented to the SALGBC, where SALGA raised its concerns. A further escalation was made to the Registrar of Labour, who had made pronouncements on the issue. Those pronouncements would be presented to the Committee.

SALGA was not requesting financial resources in its presentation and remained financially dependent on municipalities. Due to municipalities experiencing cash flow constraints, SALGA had looked into alternative revenue-generating opportunities to run independently of municipalities and where feasible, partner and collaborate with other role-players.

When preparing the APP, SALGA consulted extensively and engaged with all role players in local government to maintain its relevance. SALGA was part of COGTA's APP preparation, and had identified areas of potential collaboration where both organisations could perform the same activities in different municipalities to avoid duplication of responsibilities. After the APP finalisation period, both organisations would identify their specific areas of collaboration. The same process would be followed with organisations that had finalised their APPs. SALGA and COGTA both had a technical and political structure, resulting in regular interaction between COGTA's ministry and SALGA's presidency. Those platforms would be used to assess the progress of the two organisations. Similar arrangements would be made with other role players.

The Committee had said that SALGA was performing well as an organisation, but the success did not translate into the municipal space. In the 2023/2024 financial year, the focus would be to ensure that SALGA's success was also reflected in municipalities and local government. Problematic areas within municipalities had been identified and for each target, a certain number of municipalities would be relevantly supported, based on their state.

Certain municipalities were unable to pay membership levies and had entered into payment agreements over a specified period. The majority of municipalities adhered to those agreements.

Mr Mthobeli Kolisa, Acting Chief Executive Officer (CEO), SALGA, said what was seen in local government and municipalities was a result of several factors within municipalities, and those created in the municipal environment. 

It was agreed that municipalities were poorly funded and consequently unable to perform their functions. The agreement at COGTA's local government professionalisation indaba had been a proposal for a new fiscal framework for local government. SALGA continued with that work in its advocacy programme.

SALGA had to make do with the outcome of the elections and the high turnover rate of political candidates. Programme two sought to assist in building the capacity of councillors. That would be done in collaboration with COGTA, MISA, etc. Over the terms, there was an increase in municipalities that did not have a simple majority of a political party, and thus led to coalitions governing them. A framework for managing coalitions was in the pipeline, and such municipalities needed to be regulated. Changes in municipalities would be a consequence of changes in other spheres of government. Additionally, municipalities had multiple weaknesses, and the APP extensively detailed how SALGA would specifically support them, depending on their challenges. Several municipalities would be targeted and progress would be tracked. 

Engagements had been made on regulations that National Treasury issued as part of Eskom and the municipalities' debt write-off process. Trust had been established in National Treasury's mission, but there were important elements that SALGA wanted to engage the National Treasury on. These included the internal conditions placed on municipalities to relinquish their licences to distribute electricity. That needed to be corrected, because the amended Municipal Systems Act, 32 of 2000 guided who should be a service provider (including electricity suppliers). Decisions taken by municipalities should be legal and viable.

Mr Bhekumzi Stofile, President of SALGA, said it had not been SALGA's decision to remove Mr Manyoni as mayor of Mangaung municipality after the municipality had built sound resources and focused on matters that brought transformation and resolution to the community's challenges. His removal had led to the municipality collapsing. It was important to remember that political formation decisions had far-reaching implications for government and a municipality's ability to perform its constitutional duties. A letter requesting interaction with the leadership of the Economic Freedom Fighters (EFF) and the Democratic Alliance (DA) had been dispatched to discuss the situation and the challenges that led to the collapse of municipalities. Through collaborative efforts, leaders of the various parties and government needed to find solutions to the challenges faced. "The elephant was in the room" and everyone was responsible for it. In changing and realising developments in local government, honesty on the leadership's shortfalls was required. SALGA was open to having an open debate on dealing with the weaknesses of local government, which were often ignored.

Follow-up questions

Ms P Xaba-Ntshaba (ANC) said Kimberley, Phokwane, and the Enoch Mgijima local municipalities were struggling and there was political unrest because the local municipalities had poor service delivery. Community members were forced to leave their inhospitable and hazardous homes due to the non-collection of sewage spillages. Were those municipalities included in the APP? The Committee was not taken seriously because local councillors did not address municipal challenges after its visits. 

Ms Mkhaliphi said Mr Stofile’s comment on SALGA not being responsible for the removal of Mr Manyoni as mayor was sarcastic and inappropriate, because the Committee was engaging SALGA on its mandate. She had an issue with “politicians who thought they were there to play.” The goal was to address the state of the local government, which was in “bad taste.” The Committee could not sit back while there were role players who were designated to support local government.

Mr Mpumza said Ms Mkhaliphi should raise her concerns with Mr Stofile privately, because the context in which the matter had been raised was not related to the question he had raised.

The Chairperson said everyone agreed on the presence of challenges that needed to be addressed in local government.

CRL Rights Commission Annual Performance Plan 2023/24

Mr Edward Mafadza, Chief Executive Officer (CEO), Cultural, Religious, and Linguistic (CRL) Rights Commission, invited the chairperson to speak on oversight issues at the National Customary  Initiation Indaba, and sought confirmation of his attendance.

The five programmes that informed the Commission's APP were:

• Administration - Organisation development and support services (AODSS)
• Legal services and conflict resolution
• Public engagement and education
• Research and Policy Development
• Communication, marketing, information technology (IT), and linkages.

Total revenue and expenses were both projected at R47 million in the 2023/24 financial year.

Mr Mafadza said they had received 115 new complaints from 1 April 2022 to 31 March 2023, of which 32 complaints were on religion, 83 on culture, and no cases on language. The unit had already handled and finalised 110 of the total complaints. The target of 80%  had been exceeded, as 95% of the handled cases were achieved in the 2022/23 financial year.

Other highlights included the 30 engagements made nationally with communities, including the Khoisan, and 25 awareness campaigns held on the promotion and protection of cultural, religious, and linguistic rights of communities.

The five-year targets for the CRL were:

• Unqualified audit opinion for each year until 2024/2025.
• Zero fruitless, irregular, and wasteful expenditure.
• 80% of complaints resolved.
• 100% of reviewed Bills that were before Parliament.
• 250 engagement and education programmes conducted with cultural, religious and linguistic communities.
• 20 research reports with recommendations produced.
• 20 reports on communications, marketing, and knowledge management systems.

Challenges

Mr Mafadza highlighted the organisation's challenges, and said that the CRL continued to operate under a very tight budget and needed financial resources to start satellite offices in some provinces.

[See attached APP for more details]

Discussion

Mr I Groenewald (FF+) recalled that he had previously said that the CRL should have a programme that looked into the history of all South African languages. Was that programme still in the pipeline? He committed to starting that programme by inviting the CRL to learn about the history of Afrikaans at the Voortrekker Monument.

Ms Mkhaliphi asked for clarity on how the CRL would prioritise the capacity building of the CRL community councils, and how it would equip them to advocate for CRL rights issues at a local level. The CRL had previously played a meaningful role in taking action against churches that subjected congregants to bizarre activities. However, it was still unknown locally, even though a promise had been made that it would be visible. The CRL could lessen xenophobia and related attacks locally by establishing preventative measures.

Mr Mpumza asked for clarity on the specific location of the CRL. There were severe cultural disputes between traditional leaders and the community in villages located in the Winnie Madikizela-Mandela municipality. To what extent was the CRL involved in resolving violent disputes, and what procedures were followed? 

CRL's response

The CRL responded that the programme that looked into the history of languages was underway. The origin of the languages needed to be established to resuscitate them. The CRL had previously interacted with the Suid Afrikaanse Taalbond, and wanted to strengthen its engagement with them. He accepted the invitation to the Voortrekker Monument, and emphasised the importance of that visit.

The CRL had about 300 community councils in South Africa that needed to be capacitated through its education programme unit to support and guide its mandate. The CRL had taken the initiative to increase its visibility locally through community radio stations, the media, and visiting rural areas. It had visited five provincial executive committees of traditional and Khoisan leaders and discussed collaborating with them in efforts to reach the communities.

Municipal Demarcation Board Strategic Plan and Annual Performance Plan 2023/24

Mr Thabo Manyoni, Chairperson, Municipal Demarcation Board (MDB), said the board had a newly appointed CEO who came into office on 1 March. He expressed his excitement at that appointment, and said the MDB would maintain its performance as seen in the APP and obtain a clean audit outcome. The current board of the MDB would reach the end of its term in 2024.

Establishing a presence in all the provinces was challenging due to the lack of financial resources. However, the MDB was looking into collaborating with other structures to seek available spaces and the required infrastructure to meet that goal. It needed to establish its presence in a manner in which its independence was not compromised. That eliminated any potential collaboration with related parties. It had intensified its redetermination consultations provincially. To resolve the issue of having a minimal provincial presence, the MDB met with provincial Members of Executive Councils (MECs) to discuss redetermination processes. Visits with the MECs of COGTA in North West, Limpopo, and Mpumalanga have already taken place.

Mr Aluwani Ramagadza, Chief Operations Officer (COO), MDB,  said the purpose of the presentation was to present to the Committee the MDB's strategic plan for the fiscal years 2020 to 2025; the APP for the 2023/24 financial year; the budget allocation of the institution; and the impact of limited financial resources.

Programmes supporting the implementation of the strategy were:

• Administration.
• Demarcation and spatial transformation excellence.
• Research, spatial information, and intelligence development.
• Stakeholder engagement and communication.

The medium-term revenue and expense estimates were both R74 million in the 2023/24 financial year.

The following main deliverables were achieved in the fourth quarter:

• Unqualified audit opinion with no findings (clean audit) from the Auditor-General of South Africa (AGSA) for the 2021/22 financial year;
• Section 26, 21, and 21(5) legal notices published in terms of the Municipal Demarcation Act (MDA) published for class one redeterminations;
• Section 26 legal notices published in terms of the MDA for class two to four redeterminations;
• 11 576 voting districts analysed to determine split communities;
• Two research reports were produced, and two research reports were presented at the South African Association of Public Administration and Management (SAAPAM) conference.

The four main priorities in the 2023/24 financial year were organisational excellence, well-defined municipal spaces, improved access to research and spatial information, and improved public and stakeholder participation.

Mr Ramagadza highlighted the five-year targets for MDB. These were:

• Maturity level five achieved by 2025.
• Municipal boundary redetermination proposals considered by 2025.
• Research and spatial information accessible to stakeholders and the public by 2025.
• 80 public participation, education, and awareness events activated/supported.

He said the challenges faced by the MDB were that it remained significantly resource-constrained, unable to expand its footprint in different regions of the country and grow its research processes. The 2023/24 financial year required significant funding to expand and intensify its stakeholder management, communication, public participation, and formal investigations. Municipal boundary amendments would always leave some members of the public dissatisfied and this may lead to unrest in some areas. The MDB continuously recorded those areas and made the National Joint Operational and Intelligence Structure (NATJOINTS) aware of possible unrest during its public engagements.

[See attached APP for more details]

Discussion

Ms Mkhaliphi said that she did not know how to sympathise with MDB’s lack of financial resources, as that was a common challenge across all departments and their entities. She recalled that she had previously raised a “burning issue” about Ward 52, which had not yet been addressed. She was disappointed that contrary to the resolution taken by the Committee, a delegate was not sent to listen to the concerns of Ward 52. It was surprising to see that while the MDB failed to perform its duties, it usually called out the security cluster to carry out its responsibilities during political unrest. It appeared to the Committee that the MDB was merely “brushing things off” when it had previously committed to addressing the issue in Ward 52. She emphasised that the Committee raised issues expressed by communities, and did not do so merely because it was bored.

She asked for an update on the consultations, since the due date had been 31 March 2022. She recalled that she had read on social media that the MDB was heading to North West, and asked how it advertised its consultations on determining or re-determining boundaries.

Mr Groenewald asked if a redetermination form was submitted to the MDB for the demarcation of Rustenburg and its surrounding municipalities. If so, where had it come from? Was it possible for the MDB to make the form accessible for the Committee to assess the reasoning behind the redetermination of the  boundaries? How was the MDB planning on consulting almost two million people affected by the demarcation?

Ms Spies said she was concerned about the MDB's decision to publish the North West redetermination notice in the Daily Sun newspaper. Section 26 of the Local Government: Municipal Demarcation Act, no. 27 of 1998 (MDA) had not been met because the Daily Sun was not a North West specific publication, and its distribution did not penetrate all the affected areas. How did this publication proceed? It was also not a publication that enjoyed popular readership across all socio-economic demographics, which was a concern, as the notice should have reached all individuals. Why were other publications applicable to the demographics in the area overlooked?

It was difficult to access some maps published on the MDB website, such as map 801 in the JB Marks municipality redetermination set of maps. The omitted map was a significant redetermination, splitting JB Marks and two other municipalities. She asked for assistance in acquiring that map.

The MDB needed to be more proactive in determining preventative steps for hotspots in the redetermination and delimitation process. She requested that contentious redetermination proposals, possibly triggering political unrest, be presented to the Committee in the future.

All municipalities, except for uMngeni municipality, with proposed amalgamations (e.g. uMgungundlovu) struggled financially and had severe service delivery problems. Was it in the best interests of residents to force the amalgamation of well-performing with underperforming municipalities? What criteria had the MDB used in suggesting the amalgamation of uMngeni with several failed municipalities?

Mr Mpumza asked the MDB to send the Committee its categories for redetermining municipal boundaries in the 2023/2024 financial year. Were local or established media used to issue notices on objections to the communities? To what extent did the MDB consider objections to submissions made by the communities or individuals? Had the Dr Beyers Naude municipality sent redetermination submissions after its unsuccessful amalgamation?

MDB's response

Mr Manyoni apologised for the delay in addressing the concerns and challenges in Ward 52. He assured the Committee that he would immediately follow up on the matter after the meeting because he had previously sent a delegate to address those concerns. He did not want the board to appear to be dismissing the concerns of the Committee. Even communities that directly raised their concerns with the MDB were further invited to their offices.

Oversight by the Committee was welcomed, as it brought about a common understanding between interested parties. Unfortunately, for safety reasons, the MDB was unable to provide the public with the names and details of the applicants who applied for redeterminations unless compelled to do so by the law. Its independence in dealing with redetermination applications had been upheld in refraining from providing such information. Generally, publicised applications were from communities and interested parties and not the MDB, although the law allowed for that.

He agreed that careful consideration should be made when choosing platforms through which publications and notices were made. The Daily Sun was a dominant publication in that area, so it had been the chosen publication. Going forward, other publications would be considered, but the MDB would be unable to advertise in all of them due to cost constraints. Instead of relying only on newspaper publications, the MDB sent formal notices to Ministers, MECs, chairpersons of the National House of Traditional Leaders (NHTL), speakers of metropolitan municipalities, respective Heads of Departments (HODs), mayors, champions of independent electoral commissions, SALGA, etc. In informing the general public, the MDB published notices in affected areas through existing local publications.

He outlined MDB’s redetermination process as follows:

• Until the end of April, the MDB welcomed favourable and unfavourable written representations.
• In June, it would call for public consultations in affected areas.
• After that process, the board would call on applicants and opposers to motivate their position before formal consideration by the board.

He said it had been observed that the municipal amalgamation process presented several challenges for the well-performing municipalities, such as parity; rate and taxes; valuation roll issues; etc. He advised that the amalgamation process should be approached with some reluctance until those challenges were addressed. For example, the Tshwane municipality was still financially burdened by the costs that came from merging with several municipalities, as the National Treasury had been unable to provide the requested financial resources to support the amalgamation.

Mr Ramagadza recalled that he had interacted with Ms Spies the previous day and committed himself to immediately providing her with the omitted map.

The majority of the recently published proposals had originated externally. The MDB thought it was fair to consider the views of the public before the board could decide on the redetermination proposals. The Municipal Demarcation Act (MDA) referred to the board’s intention to consider the proposals, which meant that it had not yet considered them but intended to do so, hence it had called for a public view. Over and above the MDA and newspaper announcements, the MDB had conducted further campaigns on various radio stations -- Phalaphala FM, Motsweding FM, Munghana Lonene FM, and Setsoto FM -- to invite public participation and consultation ahead of its public meetings. The MDB was also previously interviewed on eNews Channel Africa (eNCA), and was scheduled for another appearance on 24 April, to further invite the public’s participation before the closing date. It had the same build-up approach as the Independent Electoral Commission (IEC) in running its awareness campaigns.

Previously, meetings were held in major towns only, but he assured the Committee that going forward, meetings would also be held in the smaller settlements. Posters around the communities, taxi rank adverts, and social media would be used to increase awareness of Section 26 before public meetings. The same channels would also be used to invite participation during the objection phase to supplement the requirements of the legislation to solely publish in the Government Gazette.

He said that it was important for the MDB to practice fairness constantly. It had been emphasised to stakeholders and community members that their submissions needed to be motivated by the demarcation criteria, which assisted MDB in analysing and comparing against its independent research. The board would consider all objections which met those criteria.

The Msunduzi municipality proposal would still be subjected to the demarcation criteria should it pass the preliminary use and representation phase. Consultations with the public would be held during the public meeting phase. The MDB had introduced a process of formal investigations where stakeholders were summoned to give their representation on the redetermination process. If any concerns arose, the public would be further encouraged to make their submissions during the objection phase. 

Mr Manye Moroka, CEO, MDB, who was newly appointed into his position on 1 March, said that he had noted all the concerns raised. He assured the Committee that the next executive committee (EXCO) sitting would focus on interrogating the entire plan to ensure the redetermination process ran smoothly. The chairperson of MDB had been interviewed on Newsroom that day to explain the determination and delimitation process.

Committee matters

The Chairperson closed the meeting to non-Committee Members, and said if there were unaddressed concerns, the Committee Members would follow up with MDB. The Committee would then compile a report for adoption on 21 April and send it to Parliament for debate.

The Committee agreed on the importance of combining physical and virtual meetings. Members were greatly affected by loadshedding during virtual meetings.

The Finland study tour was not possible, because Finland had an election that would disturb the tour. An alternative country would need to be identified for the tour. A waiting period of six weeks was a lengthy period to receive details on the tour. The Committee secretary would attempt to get the details in a shorter time frame.

The meeting was adjourned.