Municipal Systems Bill: briefing

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Cooperative Governance and Traditional Affairs

14 September 1999
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PROVINCIAL & LOCAL GOVERNMENT PORTFOLIO COMMITTEE
15 September 1999
MUNICIPAL SYSTEMS BILL: BRIEFING

Documents handed out
Slide presentation on Municipal Systems Act (attached to end of minutes)
The Bill may be viewed in What's New on the
Department's website

SUMMARY
The Deputy Director General, Dr Crispian Olver, briefed the committee on the broad strategy behind the chapters of the Municipal Systems Bill. The Bill has been gazetted and the deadline for public comment is 17 September. The Department will then work around the clock to get the Bill tabled in parliament by 4 October. If this deadline is met preliminary hearings will be held on the 18, 19 and 20 October.

MINUTES
The essence of the briefing is contained in the slide presentation. Dr Olver stressed the need to see the Bill as part of a package of legislation. It follows on from the Municipal Demarcation Act and Municipal Structures Act by regulating the internal workings of local government and providing for its developmental nature. However it is still dependent on the financial measures that will hopefully be tabled later this year. It is through the package as a whole that change will be driven.

The following sections complement the slide presentation:
Chapter 1: Interpretations and definitions
This deals with the definitions involved in the Bill.

Chapter 2: Legal nature of municipalities and internal relationships
This gives a new concept of what a municipality is. It must become more than just a structure of state to ensure public involvement. Minimum requirements of public participation are spelt out in chapter 3.

Chapter 3: Public participation
Public participation will only be limited by the constraints of administration. The idea of ‘Batho Pele’ - the people first - is to be the key principle behind government. The public should be able to demand a certain level of performance from their municipality. Transformation in local government will not be from the top down but instead from the demands of empowered citizens. The Bill provides the mechanisms through which demands can be made. These mechanisms for public participation have importance within all the chapters that follow.

Chapter 4: Municipal functions and powers
This defines the functions and powers of municipalities especially the role of executive authority. As many services are farmed out executive power is often effectively removed from a municipality. Dr Olver illustrated the need to legally define executive power with the example of electricity reticulation. Constitutionally municipalities have executive power over electricity reticulation. However as more than two thirds of electricity is directly provided by ESKOM, who is controlled by a government regulator, executive authority is lost by the municipality. Somebody else has control over setting targets, tariff controls and future plans. It is essential to create a new framework in which municipalities will operate. Chapter four (working with measures in chapter two) also tries to integrate local legislation with national policies and coordinate decentralisation of government operations.

Chapters 1-4 lay the legal basis for the systems laid down in Chapters 5-9.

Chapter 5: Integrated development planning
The aim is to move developmental planning away from a consultant driven process and to fit it to a timeframe that makes sense. This means that Integrated Development Plans (IDPs) should be adopted in the first year of a council’s existence and run for a five year period that corresponds to their period of office. This will make medium term financial planning will be crucial. These five year plans should work with both a bigger and smaller picture. They should reflect the long term vision of the council but also correspond to annual budgets. Basic and broad requirements of IDPs have been set out. Dr Olver stressed that these guidelines were needed if essential services were to be performed.

Chapter 6: Performance management
This reflects the process set out by chapter five and involves the specific reporting requirements to communities. Planning and financial statements must be accessible and have meaning to the person on the street. Mechanisms to improve performance are set out. Further municipalities are forced to question whether they are providing services in the best way at the best price.

Chapter 10: Provincial and national supervision
Relating to chapter six, national and provincial bodies will be given a role within the monitoring of municipal services and performance.

Chapter 7: Local public administration and human resources
This works to get the concept of Batho Pele, already pushed at national and provincial level, pushed at local level. The Public Service and Administration White Paper demanded that basic mechanisms of Batho Pele be put in place at local level. It is therefore possible that the delegations section of the Structures Act could be put into this Bill to aid the extension of Batho Pele into the administration of local government. Dr Olver noted that the clause placing Municipal mangers onto performance contracts (to ensure the people really do come first) would probably be a point of controversy.

Chapter 8: Municipal services
This explicitly deals with service delivery options and opens up a menu of options in law. It forces the municipality to undertake competitive procurement when arranging service provision. It also separates the service authority from the service provider to ensure that the municipality remains obliged to ensure efficient service delivery.

Chapter 9: Credit control and debt collection
This provides the municipality with very tough measures to ensure credit control. While accepting that some people cannot pay for services these measures hit hard at those than can pay but do not. It is crucial that municipalities can control credit as non-payment is currently undermining the local government system.

Dr Olver concluded by admitting that the Bill is very ambitious in scope and often appears complex. It does set up a wide range of processes but hopefully it can be seen that these processes are inter-linked. Further the bill should give effect to the White Paper on Local Government and provide for a developmental and performance related local government.

Questions
Mr P Smith (IFP): Is it not problematic to define a municipality as including residents? A municipality is a juristic person so does this not leave residents open to being sued if the municipality is?
Response: The Bill explicitly spells out the differences between when a municipality includes residents and when it refers to merely the council and its administration. We have taken very detailed legal advice on this issue.

Mr P Smith (IFP): The Bill seems to greatly prescribe how a local government should run its affairs. What room is left for the initiative of local government?
Mr J Selfe (DP): The drafters of the Bill appear to have redrafted the constitution itself in their attempts to unpack its proscriptions for local government. Do you think that too much has been read into what the Constitution requires of local government?
ANC member: If Batho Pele is to have an impact the Bill itself must be a tool of empowerment, currently it is not.
Mr Y Carrim (committee chairperson, ANC): The Bill is indeed torturous!
Response: In relation to all these comments I believe that the complexities of the Bill must be confronted head on. We are trying to move from a centrally fragmented framework to an integrated one. This must be done and the uneven nature of regulations and timeframes placed on local government must be resolved, very few currently comply with these anyway. We need minimum – and they are only minimum – central regulations that will provide the platform for more detailed regulations and plans that will be done at a municipal level. The Bill aims to be a launching point to enable the localities to run their own affairs. We must ensure a balanced influence for the role of national and provincial regulation on local government. This role will be greatly influenced by the result of the constitutional challenges to the Structures Act. I actually believe that this Bill is very lean on regulations. We have aimed to give objectives whilst allowing Municipalities the choice of how to meet them.
Mr Y Carrim(committee chairperson, ANC): I do not think that you have addressed the issue that the Bill is very complex in itself. The Bill must show the connections between its aims and how it is structured as your presentation did.

It was generally accepted that this would have to be addressed at some point in the future drafting process.

ANC committee member: The package of local government legislation requires the repeal of some Acts, how will this be done?
Response: The Systems Bill will probably repeal some legislation that directly affects it but this is still under discussion. There will also be a general repeal.

Ms G Borman (DP): There is great emphasis on public participation but will the consultation process only slow down the improvements needed in service delivery?
Response: Public participation is expected to be an area of much debate. I had actually anticipated that this would revolve around there being too little! A balance must be found between placing undue legal obligations on a municipality and what the law must state as a minimum requirement. Participation is not going to occur just because it seems like a good thing, pressure from the ground is crucial is good service delivery is to be ensured.


Appendix 1:
MUNICIPAL SYSTEMS BILL
September 1999

LEGISLATION
• Municipal Demarcation Act, 1998
• Municipal Structures Act, 1998
• Municipal Systems Bill (1999)
• Property Rating Bill (1999)
• Public Finance Management (Local Government) Bill (1999)
• Repeal of Local Government Legislation

MUNICIPAL SYSTEMS BILL
• Implements White Paper’s vision of developmental local government
• integrates core municipal systems such as participation, development planning, performance management, public administration, service delivery, financing

CYCLE OF TRANSFORMATION
[Diagram not included]

NEW CONCEPT OF MUNICIPALITY
[Diagram not included]

PARTICIPATION IS BASIS FOR CORE SYSTEMS
[Diagram not included]

PUBLIC PARTICIPATION
• Empowered citizens are the drivers of transformation
- involve residents in determining priorities
- enable residents to compare performance with other municipalities and alternative service providers
- allow residents the choice of service provider
- give residents forums to voice grievances
• Develop culture of participatory governance
• establish mechanisms for feedback and participation
• special provisions for disadvantaged
• inform residents of mechanisms
• build capacity to participate
• public admission to meetings

DEFINING EXECUTIVE AUTHORITY
[Diagram not included]

COOPERATIVE GOVERNANCE
• Municipalities must:
- Integrate municipal legislative and executive functions with national and provincial policies and programmes
- participate in organised local government
• Decentralisation coordinated through Minister and MEC
• Prevention of unfunded mandates

DEVELOPMENT PLANNING
• 5 year planning cycle linked to term of office
• IDP provides framework for more detailed sectoral plans
• must adopt plan within 1st year of council’s term
• must adopt process for IDP within 2 months
• MEC monitors and facilitates integration

LINKING PLANNING TO PERFORMANCE
PLANNING
• vision
• needs
• priorities
• objectives
• strategies
• spatial framework
• implementation plan
• financial plan
PERFORMANCE MANAGEMENT
• indicators
• targets
• monitoring
• evaluation
• communication
• change

REPORTING TO COMMUNITY
INTEGRATED DEVELOPMENT PLAN
- sets priorities and objectives of community as basis for performance indicators and targets
ANNUAL REPORT
- analyses performance of previous year
- audited financial statements
- sets targets for coming year

MONITORING & SUPERVISION
• Empowering Council and community
• Provincial monitoring linked to municipality’s own performance system
• Minister to set minimum standards for
- service delivery
- provincial supervision
• Municipal targets must match minimum standards

IMPROVING PERFORMANCE
• Capacity building
• management reform
• technology
• alternative delivery mechanisms
• review IDP

BATHO PELE
• Identify clients
• determine service
• establish current service level
• set target for service level
• determine ways to meet target
• monitor performance and review

PUBLIC ADMINISTRATION
• Culture of public service
• flexibilty and responsiveness
• efficient delegations
• performance contracts
• staff code & establishment
• capacity building & establishment
• code of conduct

SERVICE DELIVERY OPTIONS
• Internal Department
• Municipal business enterprise
• Service delivery agreement with:
- other municipalities
- other organs of state
- private companies
- NGOs or CBOs

SERVICE AUTHORITY
• objectives & targets
• develop strategies
• determine providers
• financial framework
• tariff policy
• monitor & evaluate
• regulation

SERVICE PROVIDER
• operational plan
• performance
• service delivery
• revenue collection
• sustainability
• accountability

COMPETITIVE PROCUREMENT
• For all service delivery agreements with persons other than municipalities
• Options
- prequalification and competitive bidding
- competitive negotiation
- solicitation of competing proposals
- unsolicited proposals
• Minister to regulate selection of process

MUNICIPAL SERVICE DISTRICTS
• Internal service districts
• Multi-jurisdictional service districts
- established by agreement between municipalities
- functional efficiency and economies of scale
- governing body acts as service authority
- agreement determines mechanism for service provision

TARIFF POLICY
• Equity
• access to basic services
• payment linked to consumption
• full economic cost & sustainability
• surcharges or levies
• local economic development
• conservation of scarce resources
• explicit subsidisation of poor

CREDIT CONTROL
• Sound customer management
• proper metering & billing
• credit control policy
• provisions for indigent
• termination of services
• agreements with employers
• by-laws

LEGAL MATTERS
• Notices
• certificates as evidence
• prosecution of offences
• fines & bail
• service of documents
• debt settlement before transfer

BY-LAWS
• Legislative procedures
• subordinate legislation
• publication requirements
• standard draft by-laws
• municipal code


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