Cross-Boundary Municipalities Bill; Municipal Systems Bill: discussion

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE; LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE: JOINT MEETING
9 June 2000
CROSS-BOUNDARY MUNICIPALITIES BILL; MUNICIPAL SYSTEMS BILL

Documents Handed Out:
Local Government: Cross Boundary Municipalities Bill
Local Government: Municipal Systems Bill
Chapter Three: Public Participation. A response by the Department of Provincial and Local Government to the submissions made during the public hearings hosted by the Portfolio Committee

SUMMARY
The committee reviewed the Cross-Boundary Municipalities Bill and the Municipal Systems Bill with the assistance of the Department of Local and Provincial Government.

Questions of clarity were asked regarding the Cross-Boundary Municipalities Bill. The committee was critical of the Schedule section as not being user-friendly. There was some confusion in understanding the technical implications of the Bill. The committee will seek clarification from the Municipal Demarcation Board.

Members also reviewed the Definitions section of the Municipal Systems Bill. Debate centered around the definitions of community, financially sustainable, and ratepayer. The committee felt the definitions were inadequate for a variety of reasons. They were unable to come to a consensus on how the terms should be defined.

MINUTES
Cross-Boundary Municipalities Bill
The Chairperson indicated that this bill will be fast tracked through Parliament and should be finalised by both Houses by 22 June 2000.

Mr Zam Titus, Director-General of the Department of Provincial and Local Government, said the Bill is the result of the Municipal Demarcation Board wanting certain municipal areas to extend across provincial boundaries. To give effect to this, section 155(6A) of the Constitution requires national legislation authorising the respective MECs to establish a municipality within that municipal area. The Bill seeks to provide the required authorisation.

Mr Titus outlined the three categories for cross border municipalities.
· category one: municipalities have local councils,
· category two: municipalities have metropolitan councils, and
· category three: municipalities have district councils.

The Department prepared pro forma resolutions for the affected MECs who have to establish such cross-boundary municipalities. All affected provinces, with the exception of KwaZulu Natal and Eastern Cape, approved the resolutions. KwaZulu Natal and Eastern Cape have not been able to reach agreement yet

Mr Titus continued by saying that once this legislation was passed by Parliament, the Municipal Demarcation Board would not be able to redefine the boundaries of cross-boundary municipalities. Only an Act of parliament could effect such change.

Mr Titus reviewed the three sections of the Bill:

Preamble
The preamble, which is self explanatory, provides the background to the bill.

Establishment Clauses
Clause 1 authorises the MECs responsible for local government in the affected provinces to establish cross-boundary municipalities.

Clause 2 contains the short title.

Schedule
The schedule contains the areas where cross-boundary municipalities should be established. These areas have been tentatively demarcated and still require approval by Parliament. Once approved, the MECs for local government may establish such municipalities.

Discussion
Members indicated that the schedule should be more user-friendly to allow for easier reading and understanding. Also, the schedule reflected a cross-boundary municipal area in KwaZulu Natal and Eastern Cape. The department responded that reference to the above provinces has been deleted in the amended schedule. With regard to making the schedule more user-friendly, the department undertook to convey the sentiments of the committee to the Municipal Demarcation Board.

There was also concern about the amended Schedule that had to be published for comment, and allowing 30 days for such comment. It was asked if the Municipal Demarcation Board were to affect further changes after the Bill was passed, would an amended Bill need to be passed. The department responded that the amended Schedule contains technical amendments and that the boundaries had been finalised. The Board thus would not amend the schedule again.

Questions were raised around the number of voters affected by the cross-boundary municipal areas and what the effect would be on the provinces if the municipalities remained in the provinces where they currently were. The Chairperson noted that these questions must be directed to Dr Sutcliffe of the Municipal Demarcation Board.

Municipal Systems Bill
Ms Jackie Manche, the Acting Deputy Director General, said the Municipal Systems Bill is the third piece of legislation to give effect to the Local Government White Paper. The first two pieces of legislation were the Municipal Demarcation Act and Municipal Structures Act. These Acts deal with the institutional and jurisdictional aspects of the local government transformation process. The Municipal Systems Bill focuses primarily on the internal systems and administration of the municipality. Its intention is to establish the basic principles and mechanisms that give effect to the collective vision of developmental government.

Ms Manche stated there had been some discussion in the Department surrounding numerous terms in the Definitions section of the Bill. Primarily, concern centered on establishing more definitive and lucid phrasing for "resident" and "ratepayer". The Department was also unsure that the definition of "development" adequately captured all that it was intended to include.

Under advisement of the Chair, the committee reviewed all terms under the Definitions clause.

Category
The committee agreed this definition was straight forward and in line with 155(1) of the Constitution.

Community
The Chair stated that those who made submissions deemed this definition very problematic. The submissions indicated that the definition should acknowledge gender, organised structures of civil society, and general individuals.

Mr Smith (IFP) argued that "community" should be made very distinct from the definitions of "ratepayer" and "resident". He felt the inclusion of stakeholders in the definition was wrong, since communities were more defined by geographical terms. Mr Selfe (DP) added that including stakeholders in the definition might create legal difficulties in the future.

Ms Manche agreed with the Democratic Party, stating that community needed to imply a perception of belonging to a geographical area, but also that it needed to illustrate there was a common sharing of values among its members.

The ANC stated the definition must also acknowledge that municipalities consist of numerous communities, and that individuals could be members of more than one community. Mr Smith suggested that the definition be excluded from the Bill.

The Chair admitted that the definition had to incorporate both the generality of the term, as well as include mention of the distinct groups that comprise it. He noted that section 152 (1)(e) of the Constitution made reference to community organisations being included as part of the community, and said that this definition should maintain similarity.

It was suggested that all references to community within the Bill should be reviewed, and that a definition be constructed specific to this Bill.

Delegating authority
Ms Manche stated that delegating authority refers to a delegation of a power or duty by a municipal council, or another structure. This term is applicable to Chapter 7: Local Public Administration and Human Resources.

The Chair asked for clarity on the difference between functionary and official. Ms Manche replied that the Municipal Systems Bill dealt mainly with officials, whereas the Municipal Structures Act dealt specifically with functionaries. Functionaries were defined as individuals who hold statutory responsibilities. Mr Selfe added that it was necessary to look at the definition of functionary in context of Chapter 4 of the Municipal Structures Act, 1998, since any person appointed to a position not listed therein would be considered an official.

The Chair also asked for clarification between power and duty. Ms Manche replied that power was derived from authority. Power was specific to authority that had been entrusted upon an official, whereas duty refers to the basic values and principles of governing, as was outlined in section 195 of the Constitution.

Delegation
The committee agreed to pass over this definition, until it was determined how it would be affected by the Public Finance Management Act.

Development
Mr Smith was concerned that mention of the National Environmental Management Act, 1998 in subclause (b) restricted the scope of subclause (a). The Chair felt the definition was appropriate, but asked the Department to investigate the matter.

Environmentally sustainable
Ms Manche stated this definition related to provisional services of municipalities being performed in a manner that had no negative effect on the environment. The definition will be cross-referenced to be brought in line with other environmental legislation.

Executive authority
Mr Smith was confused as to why the definition only made reference to 156(1) of the Constitution, and not the entire clause. Section 156 deals with powers and functions of municipalities. The committee agreed that reference should be made to the entire clause.

Financially sustainable
Ms Manche stated that the three aims of providing a municipal service in terms of financial sustainability were:
· to ensure revenues from those services cover the cost of operating and maintaining the service.
· to ensure a reasonable surplus, or surplus, in the case of a business enterprise
· to ensure the municipality generates sufficient capital requirements for the performance of the service.

Ms Manche said the Department had attempted to incorporate all the ideas put forth from the submissions.

Mr Smith noted that, as the definition was stated, it seemed to imply that every service provided by the municipality must comply with both (a) and (b). He said this was contradictory, since (a) allows for budgeted subsidies, while (b) requires that a profit be shown.

Ms Manche responded that the intention was that municipalities would be able to operate and maintain services in conjunction with each other. The example was given that it was common that municipalities receive subsidies to provide sanitation services, but that municipalities often reaped a financial surplus from providing electricity. The intention is that municipalities will be able to subsidise those services that required funding, by those services that generated a surplus.

Mr Smith still felt it was problematic, since the term referred to a municipal service and not municipal services in general. He argued that the current wording implies that every service must adhere to (a), (b), (c), and (d). Ms Manche admitted that the wording may not be correct, but that the intention of the clause was correct.

Concern was also raised as to the political question surrounding "the ability and willingness of residents to pay for the service". It was decided further discussion was needed.

The meeting was adjourned.