Intervention in King Sabata Dalindyebo Municipality: briefing

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LOCAL GOVERNMENT SELECT COMMITTEE
2 September 2004

INTERVENTION IN KING SABATA DALINDYEBO MUNICIPALITY: BRIEFING

Chairperson: Mr S Shiceka (ANC) [Gauteng]

Relevant document
Letter to Executive Mayor: King Sabata Dalindyebo Municipality
Briefing by Eastern Cape Housing, Local Government and Traditional Affairs MEC

SUMMARY
The Eastern Cape MEC for Housing, Local Government and Traditional Affairs briefed the Committee on the prevailing situation in the KSD Municipality, the legal basis upon which the intervention was based and the pending court cases. He apologised for the late tabling of the monthly report for July 2004, and handed a copy over to the Chair.

During the discussion the Democratic Alliance expressed his concern at the MEC's statement that it was due to political sensitivities that major steps were not taken in the KSD municipality. The MEC was asked to explain how long the unacceptable situation had gone on in the KSD municipality and why the situation was allowed to degenerate, whether the KSD municipal has passed its budget already, whether it was then still necessary to continue with the intervention if the Interim Management Team (IMT) had tranformed the municipality into a well oiled machine and who would administer the the budget process. The Chair suggested that the administrator should comprise the Chief Director, the city manager and the CFO in order to add credibility and authority to the process and that clear terms of reference for the mandate of these officials must be devised.

MINUTES
Introduction by Chairperson
The Chair stated that the purpose of this meeting was to receive a briefing from Mr Kwelita, Eastern Cape MEC: Housing, Local Government and Traditional Affairs, on the situation in the King Sabata Dalindyebo (KSD) Municipality. The briefing should include a progress report on the implementation of the recommendations made. The Department should also report to the Committee on a monthly basis, and the Committee took a dim view when the MEC on one occasion required an extension. This was not the way to build co-operation between two spheres of government. The reasons for the late tabling of the report must also be dealt with in the briefing.

Briefing by MEC
Mr Kwelita conducted the briefing (document attached) which outlined the prevailing situation in the KSD Municipality, the legal basis upon which the intervention was based and the pending court cases.

He stated that further that the monthly report was not submitted for July 2004, and an apology was owed for that oversight. The reason for the delay was the absence of the MEC as well as the director concerned, and he thus took full responsibility. He stated that he had a copy of the report with him and handed it over to the Chair.

Mr Kwelita stated that the last report to be submitted by the provincial government would indicate the progress made in implementing the recommendations. Suffice to say progress has been made, but the coming period would provide a better opportunity to gauge the exact progress made.

Discussion
The Chair stated that a complicating factor was that municipal budgets involved both the executive and legislative function, and this must be considered by the Committee.

Mr Kwelita agreed, and his office was considering the establishment of a team that would ensure community participation in the municipal budget process.

Mr J Le Roux (DA) [Eastern Cape] asked the MEC to explain who won the last municipal election and what the figures were.

Mr Kwelita responded that he did not have the numbers with him, but suffice to say that after the local elections the UDM was in the majority. After the floor-crossing the period that majority was reduced, and was further reduced by the resignation of ward councillors. Even before the local elections the ANC was in the majority in the affected wards. The figures can however be provided.

Mr Le Roux stated that he asked the MEC to indicate when exactly the UDM lost the majority in KSD.

Mr Kwelita replied that it would be difficult to provide dates and details because this was not available at the moment, but it can be supplied to Members at a later date.

Mr Le Roux expressed his concern at the MEC's statement that it was due to political sensitivities that major steps were not taken in the KSD municipality. Actions must be taken in terms of the relevant statute which dealt with such a situation, and political sensitivities must not be allowed to negatively affect service delivery and the community at large.

The Chair asked whether the financial problems were a result of political instability, because if a municipal budget is not approved by the council then there were no fund to operate the municipality.

Adv Momoti, Senior Procedural Officer in the NCOP, asked the MEC to confirm the statement in the briefing document that his office was not considering any pending court action pertaining directly to the intervention.

Mr Kwelita replied in the affirmative, He confirmed that there was no court case.

Mr Sogoni (ANC) [Gauteng] asked the MEC to explain how long the unacceptable situation had gone on in the KSD municipality, and why the situation was allowed to degenerate.

Mr Kwelita agreed that the situation was problematic for some time and the relevant MEC tried a number of directives The MEC chose the intervention in terms of Section 139 of the Constitution because he was cautious of the political sensitivities that would have been caused by more drastic action.

Mr Z Ntuli (ANC) [Kwazulu-Natal] asked whether the KSD municipal has passed its budget already, as there appeared to be uncertainty on this.

Mr Kwelita replied that the budget has not been passed, and his office was considering means of pushing this patter forward. The KSD municipality was asked to provide an interim budget but it exhibited a deficit, and the MEC informed them that that budget would not simply be passed because of the deficit. He stated that since the intervention his office was also responsible for this function.

Kgoshi L Mokoena (ANC) [Limpopo] stated that the question to be decided on was whether the concerns raised by the UDM were legitimate. The ANC was in the majority after the local municipality election and he asked whether it was then still necessary, from the MEC's point of view, to continue with the intervention if the Interim Management Team (IMT) had tranformed the municipality into a well oiled machine.

Adv Momotsi replied that this matter was currently sub judice and he could thus not comment further.

The Chair stated that whether it was sub judice was not the main concern. The province approached the Committee to ask it to agree with its recommendation for an intervention and the Committee now has to take a decision.

Adv Momotsi responded a new concept intervention which did not appear in the Constitution was used, and was called the "limited intervention". This was his first concern. Secondly, the intervention was taken in terms of Section 139(1)(a) and (b) of the Constitution, which did not deal with dissolution and needed approval of the NCOP. Section 139(4) did not require approval of the NCOP as it merely needed to be informed of the revenue generating mechanisms.

The question then was why the Department decided to invoke two different processes, one which required approval of the NCOP and one which did not. Section 139(4) allowed for the dissolution of the municipal council and the appointment of an administrator who would ensure the budget was tasked. The problem with the intervention used was taken in terms of Section 139 which did not provide for an administrator or for the passing of the budget, and it was thus not certain to whom the power vested to pass the budget.

He stated that he believed that the legislature enacted Section 139(4) as a drastic measure to deal with the municipality that failed dismally to pass its budget, and thus allowed for its dissolution.

The Chair stated the he believed the MEC was within his legal rights to prepare a budget for the municipality, as Section 10G of the Local Government Transition Act allowed a province to approve the budget temporarily. The temporary budget must then be approved by the municipal council with or without the opposition.

Mr Sogoni stated that his understanding of the formulation of Section 139(4) was that the provision did not require the dissolution of the municipal council, but merely stipulated it as an possible option. He stated that that he thus agreed with the Chair's proposal.

Mr Kwelita replied that this would be considered.

The Chair sought clarity on how exactly the budget process would be finalised, and who would run the administration.

Mr Kwelita replied that his office decided it would be important for a Chief Director of Local Government to be responsible for this function, and one of the tasks given to that person was to develop a turn around plan. The Chief Director was also tasked with considering the enlisting of specialists to assist, and also to consider the appointment of an administrator. This function should lie with the Department.

The Chair suggested that the administrator should comprise the Chief Director, the city manager and the CFO in order to add credibility and authority to the process. Secondly, clear terms of reference for the mandate of these officials involved in this exercise must be devised so that the successes of the process can be measured at the end of the term. This must then be forwarded to the Committee for consideration. Thirdly, the Committee might visit the KSD municipality on 15-17 September in order to assess the situation and allow the community to perform its tasks.

The Chair stated further that it was an anomaly that the NCOP did not need to be informed of the very drastic dissolution intervention in Section 139(4), and must be corrected in the Constitution.

Mr Sogoni asked why the Integrated Development Programme (IDP) has to be done every year, whereas the strategic plans had to be submitted over a 3 year period.

Secondly, Mr Sogoni sought clarity on the situation spelt out by the Municipal Finance Management Act in such a situation in which the province or local authority cannot pass a municipal budget. This impacted severely on service delivery.

Mr Kwelita thanked the Committee for their input, which sharpened his office's own understanding of the process, and will be taken into consideration.

The meeting was adjourned.

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