Division of Powers & Functions of District & Local Councils & Related Financial Issues

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Cooperative Governance and Traditional Affairs

02 April 2001
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Meeting Summary

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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO AND SELECT COMMITTEES: JOINT MEETING
3 April 2001
DIVISION OF POWERS AND FUNCTIONS OF DISTRICT AND LOCAL COUNCILS AND RELATED FINANCIAL ISSUES: BRIEFING

Relevant documents:
Working document: The Division of Powers and Functions between Category B (Local) and Category C (District) Municipalities (Appendix)

Note: The word municipalities and councils are used interchangeably but mean one and the same thing.

Chairpersons: Mr Y Carrim (PC); Mr M Bhabha (SC)

SUMMARY
The committee was briefed on the division of powers and functions of municipalities, especially as they relate to district and local municipalities. Specific reference was made to sections 83 and 84 of the Municipal Structures Act as amended.

A lengthy discussion ensued on subsection 84(3), which deals specifically with authorisations of municipalities to have powers and functions that were originally not allocated to them. Concerns were raised over the capacity of these municipalities to perform these additional powers and functions. The issue of funding emerged as a point of discussion, in particular where from and how is funding to be provided for the performance of these powers and functions.

The Chair commented that the process is not as complex as it seems and remained optimistic that many of the concerns that were raised could be allayed by greater co-operation between the stakeholders.

MINUTES
Department of Provincial and Local Government
The Director-General (DG) of Provincial and Local Government, Mr Zam Titus, stated that what is being presented today is work in progress and all stakeholders should feel free to make inputs. He pointed out that there would be certain issues that he would not be covering, as they must first be discussed in a MinMEC meeting to be held on 10 April 2001. Thereafter he would address the committee on the issues.
Mr Titus stated that the briefing would consist of basically four sections. Dr Michael Sutcliffe, Chairperson of the Municipal Demarcation Board, would deal with two of them.

Background
The DG proceeded with background on the legal framework regulating the division of powers and functions between category B and C municipalities. He made reference to sections 155(3)(c), 229 and 156 of the Constitution, which deal with the division of powers and functions between municipalities.

Mr Titus was more specific on sections 83 and 84 of the Municipal Structures Act (as amended). Section 83 clearly provides that municipalities have the functions and powers assigned to them in terms of the Constitution. More importantly section 84 divides the powers and functions referred to in section 83 between district and local municipalities. Subsection 84(1) lists the functions and powers allocated to district municipalities and subsection 84(2) allocates all the section 83(1) functions and powers to local municipalities, excluding those functions and powers vested in district municipalities in terms of section 84(1).

However, section 84(3) provides for the Minister, after consulting with the relevant line function Minister and the MECs, to authorise a local municipality to perform a function and exercise a power that is mentioned in section 84(1)(b), (1)(c), (1)(d) and (1)(i). It is important to note that the Act does not prescribe any criteria or conditions in terms of which the Minister must exercise this power. In other words, the Minister has an unfettered discretion (except for the consultation requirement) to authorise local municipalities in terms of section 84(3).

Current position
Mr Titus stated that the interim arrangements of authorisations of powers and functions as provided for in section 84 of the Municipal Structures Act was done to maintain the existing status quo. Although it is acknowledged that this situation is not ideal, it has resulted in the uninterrupted provision of services and disruption has been restricted to a minimum. Mr Michael Sutcliffe stated that they have met with MEC's and national departments on issues relating to the provision of water and electricity services.

Workshops were held at district and local councils to help inform them on the implications of moving national functions, ie provision of water and electricity services, to district municipalities. Mr Sutcliffe pointed out that the workshops were useful in that they identified certain problems. The first is that there is a state of uncertainty due to the fact that municipalities are anticipating, and in certain instances insisting, that the division of powers and functions be adjusted in compliance with section 84 of the Structures Act. This resultant uncertainty makes it difficult for municipalities to prepare a proper budget for the long term.

The second problem was that the two-year delay in finalising the authorisations might allow the new officials to entrench the status quo thereby making the allocation of powers and functions in 2002 based on capacity almost impossible.

Third, there are practical problems such as deciding what happens when departments such as Water Affairs and Forestry hand over water schemes to local government. Who do they give them to, the district or local municipality.

The fourth problem is that most ward boundaries now have more than one delivery agent within its area making it impossible to manage. This divided geographical responsibility would result in conflict in councils and will prevent the use of scarce resources more equitably in a district.

Lastly, the committee realised that officials in municipalities tend to still think like departments. The difficulty is to ensure that every Constitutional function is properly allocated.

The approach adopted by the Department and the Demarcation Board is to allow for incremental transformation. This will allow some capacity to be developed at district council level to absorb the functions to be allocated in 2002.

Determination of capacity by the Municipal Demarcation Board
Dr Sutcliffe stated the issue of capacity is a complex one and needs to be understood. The Board has recently conducted investigations at provincial and local level to:
- update its database in order to be well placed to make recommendations for authorisations to MEC's
- come up with different options for the allocation of powers and functions
- to develop a consensus-based approach

It is also holding discussions with professional agencies, the Department and SALGA on the issue. In applying the conceptual framework and taking into consideration the inputs received from municipalities and provincial governments, the Board developed a set of principles on which to base its recommendations on:
Principle 1 - There should no longer be any geographic split of functions
Principle 2 - If a category C municipality has some capacity it may perform a function for only some of the category Bs in an area but not necessarily all
Principle 3 - Some functions might need to be split with some aspects indicated for partial adjustments - the nature of the adjustment will still be decided.
Principle 4 - Where a function is not performed at all in a district municipality or local municipality it must be assigned to one or more municipalities.

Mr Titus stated the issues they are dealing with are not unforeseen. It is for this reason that the transitional arrangements in the amendments to the Structures Act have been provided for. The problems have been foreseen and are currently being addressed.

The way forward
In conclusion Mr Zam Titus stated that the Department would engage in an ongoing process to monitor and evaluate the authorisation process. He added that interested parties would be apprised of the process as it continues.

For detail on the briefing please refer to the attached document.

Ms Jackie Manche, Deputy Director-General of the Department, briefly dealt with the fiscal powers and functions of municipalities. She stated that in terms of section 229 of the Constitution, a municipality is entitled to revenue generated from property rates, surcharges on fees for services and, if authorised by national legislation, to levies and other taxes. User charges are normally also charged for the provision of services like water and electricity. Municipalities are however not entitled to impose income taxes, value-added taxes, general sales taxes or customs duties.

Chairperson Carrim gave a synopsis of the briefing as he felt that the subject matter was very intense and complex.

He stated that the period 5 December 2000 up until 5 December 2002 is only a transition period for powers and functions of district councils. Provision has been made in law for the powers and functions of district and local councils. If for example a district council could not perform a function, a local council can be authorised to perform it. Mr Carrim pointed out that there are two types of authorisations.
- National authorisations - by the Minister
- Authorisations by MECs after the Demarcation Board had made recommendations to it.

The Chair however emphasised that the original powers and functions would remain. These authorisations are only for the transitional period. After 5 December 2002 municipalities should have the capacities to perform their actual powers and functions. If they still do not have the capacity, the MEC would adjust their powers and functions. Mr Carrim stated that the process is incremental and difficult.

Chairperson Bhabha added that the MEC must see to it that the capacity for municipalities to perform their original powers and functions is in place.

Discussion
Adv P Smith (IFP) asked how the Department deals with the issue of funding where additional functions are allocated to district councils. If they are constrained by budgets, from where does the funding come?

DDG Manche stated that district councils have their own revenue sources. She added that provision is made in the budgets of district councils for the performance of additional functions. This is so because they are included in discussions regarding additional functions.
Mr Titus stated that the PFMA (Public Finance Management Act) provides that the transfer of functions should be accompanied by funds.

Ms G Borman (DP) asked whether district councils meet their obligations. She also asked if it is correct that the Division of Revenue Bill does not make provision for the funding of additional functions of district councils in their equitable share.

DDG Manche stated that district councils have in fact been meeting their obligations. She stated that it is correct that no funding provisions are provided for out of the equitable share in the current Division of Revenue Bill. Ms Manche stated that this does not mean that provision could not be made for it in the equitable shares of district councils in future Bills.

Mr M Bhabha (ANC, Mpumalanga) asked if it is possible to segregate power in such a way so that a trading service portion can be allocated to a particular category of municipality. For example shifting planning and co-ordination to a category B municipality. How is this going to be done?

DDG Manche stated that where trading services are concerned a category C municipality could levy a charge on a category B municipality for performing these functions.

Rev A Goosen (ANC) asked if local governments are committed to the powers and functions that are to be allocated to them. He additionally asked if the decisions that are to be taken at the Minmec meeting on the 10 April 2001 would filter down to them.

Mr Titus stated that as far as powers and functions of municipalities are concerned, processes are under way for interaction with departments. He added that they would be elaborating on their proposals for co-ordination as they emerge. Mr Titus emphasised that there is interaction and co-ordination as SALGA would be present at the meeting.

Chairperson Bhabha asked when should the IDPs (Integrated Development Plans) by municipalities be ready. He also asked if there is a mechanism to link interim IDPs with final IDPs in a manner that would allow the handing over of power to take place. Mr Bhabha felt this would allow budgets to be set and place a compulsion on the performance of these functions, as they are included in the IDP. He wished that transfer of power should therefore be provided for in the IDP.

DDG Manche stated that interim IDPs had to be completed by 31 March 2001. She added that the interim IDPs merely consolidate what is already provided for. It is a rough draft and no consultative processes have as yet been entered into. It does however assist municipalities in drawing up their budgets. Once this process is complete they can draft the final IDP. Provision for powers and functions can thus still be made in the final IDPs.

Mr A Lyle (ANC) felt it incorrect that a district municipality does the planning and a local municipality has to perform the functions.

Ms Manche stated that this does not necessarily have to be the case. There are various possibilities that exist. Ms Manche pointed out they have to consider the revenue mechanisms that exist between category B and C municipalities. A framework needs to be developed on how functions are to be allocated and how they are to be funded.

Mr Phillip Van Reyneveld of the Financial Fiscal Commission (FFC) stated that funds should be allocated to the service authority. It is the service authority's responsibility to see to it that the function is fulfilled. The FFC thus recommend that funding should go to the service authority.

Mr Bhabha felt their recommendation would depend on the capacity of the service authority. What happens if the service authority is unable to accept and distribute the funding?

Mr Smith stated that as far as the division of powers and functions of district and local municipalities are concerned, the Constitution does not make it incumbent on them to perform it. He therefore suggests that a proper framework be set up for funds to follow functions.

Mr Titus stated that we are talking about people that have been elected into office by the public. If they refuse to perform functions then they would have to account to the public as to the basis of their refusal.

Mr Van Reyneveld stated that the persons who do the actual functions should get the funding. The funding should be allocated to the person who sees to it that the actual service has been delivered. The FFC is of the opinion that the funds should go to the service authority but getting the funds actually to them is a problem.

DDG Manche and Mr Sutcliffe declined to give their views.

Ms Borman stated that the whole transitional issue seems complicated. She asked if the provinces are going to be involved in monitoring the process to get the programmes off the ground. Ms Borman also asked how the problem of accessing funding is to be addressed.

Mr Sutcliffe stated that the problem does not always lie with funding, in many instances municipalities merely have to be re-organised.

Mr Titus stated that provinces have to play a monitoring role. He added that MECs are on top of things.

Mr Sithole (ANC) was concerned how people were going to perceive this transition. Especially authorising municipalities to perform functions they were originally not authorised to perform.

The Chair stated there are many practical challenges in implementing this system. He felt that the issues are not as complex as they seem and that the Structures Act inclusive of the amendments deals with the issues adequately. The Chair highlighted certain issues that need to be addressed in detail at their next meeting.

Much discussion must still be engaged in on the issue of authorisations and the implementation of powers and functions. Mr Carrim emphasised that the committee must be given specifics on the capacity building plans and programmes that the Department is to be engaged in.

The Chair on the whole would like to see greater co-operation and co-ordination on the issues mentioned above by the various stakeholders ie the Department, SALGA, FFC, and the National Treasury.

The meeting was adjourned.
Appendix
THE DIVISION OF POWERS AND FUNCTIONS BETWEEN CATEGORY B AND CATEGORY C MUNICIPALITIES

BACKGROUND
The legal framework regulating the division of powers and functions between category B and category C municipalities may be summarised as follows:

- section 155(3)(c) of the Constitution provides that national legislation must, subject to section 229, make provisions for an appropriate division of functions and powers between municipalities, when an area has municipalities of both category B and category C;
- section 229 of the Constitution which sets out the fiscal functions and powers of municipalities and provides for an appropriate division of fiscal functions and powers where two municipalities have the same fiscal powers;
- section 156 of the Constitution provides that a municipality has the executive authority and the right to administer the local government matters listed in Part B of Schedule 4 and Part B of Schedule 5.
- Chapter 5 of the Municipal Structures Act (MSA), which deals with the functions and powers of municipalities, the division of those powers and functions between district and local municipalities and then the adjustment of the division of functions and powers:
- Section 83 of the MSA clearly provides that all municipalities have the functions and powers assigned to them in terms of section 156 and 229 of the Constitution.
- Section 84 of the MSA (as amended) divides the functions and powers referred to in section 83 between district and local municipalities. Subsection (1) of Section 84 contains a list of the functions and powers allocated to district municipalities and subsection (2) allocates all the section 83(1) functions and powers to local municipalities, excluding those functions and powers vested in district municipalities in terms of Section 84 (1).

1.2 More specifically section 84 (as amended) allocates the following functions to district councils:

a) Integrated development-planning for the district municipality as a whole, including a framework for integrated development plans of all municipalities in the area of the district municipality.
b) Potable water supply systems.
c) Bulk supply of electricity which includes for the purposes of such supply. the transmission, distribution and, where applicable, the generation of electricity.
Domestic waste-water and sewage disposal systems.


e) Solid waste disposal, in so far as it relates to-
(i) the determination of a waste disposal strategy:
(ii) the regulation of waste disposal;
(iii) the establishment, operation and control of waste disposal sites, bulk waste transfer facilities and waste disposal facilities for more than one local municipality in the district.
f) Municipal roads which form an integral part of a road transport system for the area of the district municipality as a whole.
g) Regulation of passenger transport services,
h) Municipal airports serving the area of the district municipality as whole.
i) Municipal health services.
j) Fire fighting services serving the area of the district municipality as a whole, which includes—
(i) planning, co-ordination and regulation of fire services;
(ii) specialised fire fighting services such as mountain, veld and chemical fire services;
(iii) co-ordination of the standardisation of infrastructure, vehicles, equipment and procedures;
(iv) training of fire officers.
k) The establishment, conduct and control of fresh produce markets and abattoirs serving the area of a major proportion of the municipalities in the district.
l) The establishment, conduct and control of cemeteries and crematoria serving the area of a major proportion of the municipalities in the district.
m) Promotion of local tourism for the area of the district municipality.
n) Municipal public works relating to any of the above functions or any other functions assigned to the district municipality.
o) The receipt, allocation and, if applicable, the distribution of grants made to the district municipality.
p) The imposition and collection of taxes, levies and duties as related to the above functions or as may be assigned to the district municipality in terms of national legislation.

1.3 The Minister may, after consulting the relevant line function Minister and the MEC's, authorise a local municipality to perform a function and exercise a power mentioned in section:
84(1)(b) - potable water supply systems;
84(1)(c) - bulk supply of electricity which includes for the purposes of such supply, the transmission, distribution and where applicable the generation of electricity;
84(1)(d) - domestic waste- water and sewage disposal systems; and
84(1) (i) - municipal health services.

1.4 It is important to note that the Act does not prescribe any criteria or conditions in terms of which the Minister must exercise this power. In other words the Minister has an unfettered discretion (except for the consultation requirement) to authorise local municipalities in terms of section 84(3). The Minister's is not subject to a recommendation from the MDB in exercising his power. The Minister has, though, requested that the Board to make its recommendations to him.

1.5 Until 5 December 2002, the MEC for local government in a province may (subject to the recommendation of the MDB) authorise a local municipality to perform or exercise, in its area, the following functions and powers or aspects thereof:

84(1)(e) - Solid waste disposal sites in so far as it relates to determination of a waste disposal strategy; the regulation of waste disposal; the establishment, operation and control of waste disposal sites, bulk waste transfer facilities and waste disposal facilities for more than one local municipality in the district.
85(1)(f) - Municipal roads which form an integral part of a road transport system for the area of the district municipality as a whole.
84(1)(g) - Regulation of passenger transport services.
84(1)(h) - Municipal airports serving the area of the district municipality as a whole.
84(1)(j) - Fire fighting services serving the area of the district municipality as a whole including planning, co-ordination and regulation of fire services; specialised fire fighting services such as mountain, veld and chemical fire services; co-ordination of the standardisation of infrastructure, vehicles, equipment and procedures and the training of fire officers.
84(1)(k) - The establishment, conduct and control of fresh produce markets and abattoirs serving the area of a major proportion of the municipalities in the district.
84(1)(l) - The establishment, conduct and control of cemeteries and crematoria serving the area of a major proportion of the municipalities in the district.
84(1)(m) - Promotion of local tourism in the area of the district municipality.
84(1)(n) - Municipal public works relating to any of the above functions or any other functions assigned to the district municipality.

1.6 In addition, the MEC for local government in a province may also, by notice in the Provincial Gazette, authorise a district municipality to perform or exercise, in the area of a local municipality, the functions and powers of a local municipality or aspects thereof (provided for in sections 156 and 229 of the Constitution read with section 84(2) of the MSA).

CURRENT POSITION
In the run-up to the election it was decided that in order to ensure the provision of services was not disrupted and the transfer of staff was kept to a minimum, functions and powers were allocated by the Minister and MECs along the following lines: Category B municipalities would be authorised to perform the functions of TLCs and TRCs and Category C municipalities would be authorised to perform District/Regional Services/Services Council functions. These authorisations have become known as maintaining the status-quo in respect of the four national functions and the other section 84(1) functions (excluding the four national functions) as well as the section 84(2) functions.

The result in having maintained the status-quo in respect of the division of powers and functions between district and local municipalities is that where a disestablished local municipality performed a function (say water) within its area, the newly established local municipality continues to perform that function, but only for the disestablished municipal area. This has resulted in a situation where in areas of certain local municipalities, specific functions (water) are being performed by different entities such as the new local municipality, the new district municipality or a water board.

Although it is acknowledged that this situation is not ideal, it has resulted in the uninterrupted provision of services and disruption has been restricted to a minimum.

A number of problems are presently being experienced with the authorisations. The first is that they have resulted in a state of uncertainty due to the fact that municipalities are anticipating, and in certain instances insisting, that the division of powers and functions be adjusted in compliance with section 84 of the Structures Act. This resultant uncertainty makes it difficult for municipalities to prepare a proper IDP or a budget for the long-term. It also complicates a number of transformation issues such as the finalisation of organograms, and has an adverse effect on the creditworthiness of councils seeking to access private sector funding for capital expenditure. Second, a two year delay in finalising the authorisations might allow the new officials to entrench the status quo thereby making the allocation of powers and functions in 2002 based on capacity almost impossible - two years of cherry picking or systematically under resourcing a function resulting in its collapse. This could be compounded through staff remaining insecure with respect to their futures resulting in unnecessary resignations and low work morale. Third, there are practical problems such as deciding what happens when Departments such as Water Affairs and Forestry hand over water schemes to local government? Who do they give them to: the District or local municipality? The transfer of category B functions currently being performed by provincial government or other agencies would be delayed - or would be done according to the status quo and will thus require unbundling at a later stage. Fourth, most ward boundaries now have more than one delivery agent within its area making it almost impossible to manage. This divided geographical responsibility will certainly result in conflict in councils and will prevent the use of scarce resources more equitably within a district. How also would the equitable share be calculated if there is such a divided geographic responsibility? Equitable share funds inevitably then would not be effectively utilised to serve poor areas. Fifth, there is a need to ensure that all functions are being performed and they must all therefore be allocated.

The approach adopted by DPLG and the MDB is to allow for incremental transformation. This will allow some capacity to be developed at the district council to absorb the functions in 2002, that municipalities without functions will be authorised accordingly, that category B municipalities would have to move out of their comfort zones and begin delivering services to disadvantaged communities.

DETERMINATION OF CAPACITY BY THE MUNICIPAL DEMARCATION BOARD
As indicated in paragraph 1.5 above, the MEC for local government in a province may, subject to the recommendation of the MDB, authorise a local or district municipality to perform or exercise, in its area, the functions and powers listed in section 84(1) and (2) of the Municipal Structures Act, excluding the section 84(3) functions and powers.

3.2 The Board has recently conducted investigations at provincial and local level to: (i) update its database in order to be well placed to make recommendations for authorizations to the MECs; (ii) workshop with district and local municipalities different options for the allocation of functions and powers and (iii) develop a consensus-based approach.

3.3 Part of this process meant the development of a broad conceptual framework for application across all municipalities. This involved dividing all Category B and C municipalities into four categories.

3.4 The four categories were arrived at in the following way:

(a) The Board considered two baseline indices for municipal capacity: (i) a ratio of the number of municipal employees per capita and (ii) municipal income excluding electricity. Each of the indices is ranked accordingly for all category B municipalities:

Income excluding electricity:
1 = > 300million per annum
2 = 100.1 - 300 million per annum
3 = 50.1 - 100 million per annum
4 = 15 - 50 million per annum
5 = 5.1 - 15 million per annum
6 = < 5 million

Employee per capita ratio
1 = 1 - 299
2 = 300 - 599
3 = 600 - 899
4 = 900 - 1499
5 = >1500
6 = No staff

(b) For category C municipalities, each of the following indices were ranked accordingly:

DC Income

1 = > 50 million
2 = 30 - 49
3 = 20 - 29
4 = 10 -19
5 = 5 - 9
6 = < 5 or no income

Employee per capita

1 = < 1000
2 = 1001 - 2000
3 = 2001 - 5000
4 = 5000 - 20000
5 = > 20000
6 = no employees

(c) Following this, district and local municipalities were classified as follows:

Classification 1- High capacity
Classification 2 - Some capacity
Classification 3 - Limited capacity
Classification 4 - Very limited

(d) Once the rankings or classifications were determined, the legal requirements for each municipal function were then applied. This approach resulted in two matrices, outlined below, to guide the assessment of where a municipal function is best undertaken. Each municipality would fall into a particular category in the matrix and the recommended allocation is provided for that position.

The matrices are:

Section 84(1) Possibilities - District Functions

CAPACITY

Category C High

Category C Some

Category C Limited

Category C Very Limited

Category B High*

C level

B and C level

B level

B level

Category B Some

C level

B and C level

B level

B level

Category B Limited

C level

C level

C level

C level

Category B Very Limited

C level

C level

C level

C level

 


*
Aspirant metro excluded - all functions should remain at the B level

Local Municipal Functions

 

Category C High

Category C Some

Category C Limited

Category C Very Limited

Category B High

B level

B level

B level

B level

Category B Some

B level

B level

B level

B level

Category B Limited

C level/B level

C level/B level

Some B and C level

Some B and C level

Category B Very Limited

C level/B level

C level/B level

Some B and C level

Some B and C level


(e) This framework has been applied to each municipality, taking due cognizance of each function that is actually performed in that municipality (based on the data base of the Board).

(f) In this way a national framework is applied in the context of local conditions in a consistent and even-handed way across the entire country.

(g) The recommendations that arise from this process takes cognizance of legal factors such as the MEC being able to issue an authorisation only if:

The district municipality or the local municipality (as the case may be) cannot or does not perform the function or exercise the power in the relevant area.
For any reason, it is necessary to ensure the continued performance of the function or the exercise of the power in that areas.
The Demarcation Board has recommended the authorisation.

(h) Consequently, the Board has considered at least the following key questions, which are built into the conceptual framework:

Are all the municipal functions being performed within each district area?
Is the function being performed at a category B or C level?
Where should the function be performed in terms of section 84?
If the performance is currently not compliant with section 84, why not?
What can be done to move toward compliance with the legislation?
What are the consequences of compliance - for example some Category B municipalities rely on Category C functions for resources and a narrowly focussed reassignment of these functions and powers might lead to a collapse of functioning category B municipalities.

Approach taken by the Board:
3.5 In applying the conceptual framework and while tempering it with submissions received from municipalities and provincial governments, the Board developed the following principles to be used in arriving at its recommendations:

Principle 1: That there should no longer be any geographic split of functions ie if a category B performs a functions - it should be for the entire area. This adjustment needs to be made because of the confusion presently where a Category B municipality is responsible for a particular function only in the former TLC areas of the Category B municipality. This creates problems in that a Category B municipality might only have jurisdiction over part of a ward. The Board's view is that where a Category B municipality is able to perform a function it should perform that function for the whole geographic area of the municipality.
Principle 2: That if a Category C municipality has some capacity it may perform a function for only some of the category Bs in an area but not necessarily all.
Principle 3: That some functions might need to be split with some aspects indicated for partial adjustments - the nature of the adjustment will still need to be decided.
Principle 4: That where a function is not performed at all in a District municipality or local municipality it must be assigned to one or more municipalities.
That in the case of Category B municipalities classified by the Municipal Demarcation Board as 'Aspirant Metros' all functions should be allocated to these municipalities.

WAY FORWARD
4.1 'NATIONAL FUNCTIONS'
That the current position for the national functions as set out in paragraph 2 above is retained for the municipal financial year beginning 1 July 2001 in order for
these powers and functions to be precisely defined;
the implications of shifting these powers and functions between Category B and C municipalities to be assessed and quantified; and
the finalisation of a policy framework for the devolution of both general and fiscal powers and functions, thus ensuring an integrated approach.

4.2 PROVINCIAL POWERS AND FUNCTIONS
The powers and functions listed in section 84(1), other than the four "national functions", are to be incrementally adjusted as consultations between the MDB and MECs continue, and in line with a broad, national framework endorsed by the Minister and MECs.

A report in this regard will be presented at the meeting on 10 April 2001.

Proposal

The process of assigning the 'provincial' functions and powers will be done on an incremental basis and will start coming into effect from 1 July 2001.

4.3 DEFINITIONAL ISSUES
Some of the statutory definitions of powers and functions need clarification, particularly in terms of the authority of the different spheres of government vis a vis functions which are assigned to more than one sphere of government. At the same time, such processes to clarify functions and powers will not allow the reopening of policy issues which have already been settled.

Proposal

Within the next eight months, all definitions, whether of municipal powers and functions or those to be devolved to local government must be clearly and explicitly defined.

4.4 TIME FRAMES
A three-phased approach over the short and medium term is proposed as per the table below

Phase

Timeframe

Activity

Phase 1

Dec 2000 - 30 June 2001

Finalise Section 18 authorisations to be implemented as from 1 July 2001. Development of an integrated devolution process and framework. Analysis and assessment of capacity of B&C's, cost study and plan for unbundling budgets, staff and assets.

Phase 2

1 July 2001 - 30 Nov 2002

Finalisation of assessments and plan for reassignment, and implement plan for staff and asset transfers and reassign and devolve if necessary in terms of framework.

Phase 3

1 Dec 2002

On going capacity and performance assessment



4.5 MONITORING AND EVALUATION
The Department of Provincial and Local Government will ensure that there is an ongoing and inclusive process to monitor and evaluate the authorisation process and the development of a framework to adjust functions and powers.

4.6 ROLE OF PARLIAMENT
The devolution and division of powers and functions is an executive function, but because of the significance of the issue, parliament will be continuously consulted once executive consultation processes are completed.

COMMUNICATION
Steps will be taken to ensure that all interested parties are duly apprised of the process so as to ensure that they plan and strategise from an informed perspective.

COORDINATION
At its meeting on 10 April 2001 the MINMEC on Local Government will adopt such resolutions as are necessary to ensure that an integrated approach in the handling of this matter is duly followed by all spheres and other relevant bodies.

 

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