Municipal Demarcation Board; Local Government SETA; SALGA: Reports

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT
16 May 2001
MUNICIPAL DEMARCATION BOARD; LOCAL GOVERNMENT SETA; SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION: ANNUAL REPORTS

Chairperson: Mr Y Carrim

Relevant Documents
Municipal Demarcation Board: Draft Annual Report 2000/2001
Municipal Demarcation Board presentation
Local Government, Water and Related Services SETA Report: May 2001
South African Local Government Association presentation

SUMMARY
The Municipal Demarcation Board, The Local Government SETA and the South African Local Government Association made presentations to the portfolio Committee. The aim of the presentations was to enable the Committee to engage with the presenters on reviewing their budgets. However, with the exception of the Demarcation Board the Committee was unable to engage fully with the presenters as their presentations were lacking in different matters. The Local Government SETA had submitted a report but it was lacking in budgetary information. The South African Local Government Association on the other hand was able to provide some budgetary information verbally but a written report was absent.

MINUTES
Municipal Demarcation Board Presentation
Mr Michael Sutcliffe presented an overview of the Board, its functions and issues relating to its budgetary process. The Board had reduced the number of administrative staff since the end of the last local government elections. It had improved employment equity with regards to Black, Coloured and Indian employees but he conceded that the Board should increase the number of women represented on the Board.

The Board is performing similar functions to those it performed in 2000. It was still involved in the determination and redetermination of boundaries especially where split municipalities existed. An important function of the Board was to provide an integrated database on local government information. To this end, a website and chatsite had been set up to make information freely available. In addition, the Board also provided advice to MECs as far as improving capacity is concerned.

Mr Sutcliffe highlighted the fact that the Board had to manage a cut in their budget from R30m in 2000 to R12m in 2001. This decrease resulted because of a failure to submit a budget proposal for 2001. Fixed costs had also increased for 2001 and that the demand for information from the Board had become unmanageable. Mr Sutcliffe expressed the view that the government should follow a more integrated approach. He made the suggestion that duplication of activities by the Department and the Board cease to ensure greater cost effectiveness.

For detail please refer to the attached documents.

Discussion
Mr M Bhabha (Mpumalanga, ANC) stated that the municipalities must have completed their capacity building efforts by the end of July 2001. He asked:
(i) How far are the Board's reports on the capacity of municipalities to proceed ?
(ii) Has an assessment of the capacity of Category B municipalities been done in light of the fact that they were presently performing functions under the jurisdiction of old boundaries?

Mr Sutcliffe responded that they had made recommendations to MECs on the authorisation process. He felt that most of the municipalities should be ready by July 2001. The Board wished to increase the capacity of each of the municipalities.

Ms G Borman (DP) asked who the municipalities should approach for assistance as they reach capacity. Further how many financially viable municipalities are there?

Mr Sutcliffe stated that the municipalities should feel free to contact the Board, the Department, MECs and even the South African Local Government Association (SALGA). He did not know the current number of financially viable municipalities.

Ms C Lobe (ANC) asked the following:
(i) How will the budget reduction affect the Board's work?
(ii) Would the Board in the future have a process to assess the demarcation process that is taking place in the wards? Problems have been arising notwithstanding the credibility of the process.
(iii) What does the Board envisage in terms of its restructuring ? How will this restructuring influence the functioning of the Board in the future?

Mr Sutcliffe responded as follows :
(i) It was difficult to estimate the effect of the budget reduction upon the Board's activities.
(ii) Each ward had to be the same size in order to give effect to the one-person one vote principle. The issue would be fully addressed over the next two years. He personally felt it far simpler if municipalities were allowed to make minor adjustments to their boundaries themselves.
(iii) The restructuring would not impact too greatly on the functioning of the Board and added that it was the department's responsibility to review the performance of the Board.

Mr Sithole (ANC) asked what relationship the Board had with other institutions since this was related to building the capacity of municipalities. Further, did the Board interact with MECs?

Mr Sutcliffe replied that there was a great deal of co-operation with other institutions especially with regards to sharing of information. In terms of legislation, the Board was required to provide information to MECs. He stated that this process was currently very successful.

Mr F Van Deventer (NNP) said that the report referred to 200 consultants and wanted to know what the 200 consultants were used for and what the consultants had cost. Furthermore, had the Board made financial assessments of the demarcated areas since she felt that the areas were not feasible.

Mr Sutcliffe replied that every submission made to the Board had to be technically assessed and that it was necessary to utilise people with different expertise. He contended that the Board's consultancy fees were probably much lower than other institutions.

Mr P Smith (IFP) commented that the Board had recommended improving the capacity of Category C municipalities over that of Category B municipalities. He asked why this was so. Further, the Municipal Systems Act had requirements for municipalities and asked how these requirements would impact upon the lack of capacitated Category B municipalities.

Mr Sutcliffe replied that one third of Category B municipalities lacked capacity hence the department was focussing upon Category B municipalities. The Board was addressing the impact of the Municipal Systems Act requirements upon the incapacitated Category B municipalities.

Mr J Ngubeni (ANC) referred to the Board's website and information base and asked whether the information was easily and freely available.

Mr Sucliffe replied that the Board made all its information freely available and that the Board encouraged municipalities to use the information.

Mr Bhabha asked if rural and urban renewal strategies relied solely upon the capacities of National and Local departments. Would demarcation reoccur in the short or long term since wards were constantly changing? What were the Board's plans in light of the flux amongst the wards?

Mr Sutcliffe stated that National and Provincial departments were not the only institutions providing capacity. The goal was to make municipalities administratively sustainable rather than financially viable. The National Treasury and the Department had a strategy in place to make municipalities sustainable. He added that ward boundaries were contemplated every five years with elections and hence it would not be possible to change boundaries at present.

Local Government, Water and Related Services SETA presentation
The SETA Chairperson, Mr J Mohlahla, made the presentation to the Committee. Mr Mohlahla said that the organisation as formed in March 2000 in terms of the Skills Development Act and that the focus of the SETA was on skills development and training. The presentation focused on SETA's structure, staff placement, developmental policies and future plans.

From the presentation it was clear that the SETA was still in the infancy of its formation since many staff vacancies had not yet been filled and neither had their performance deadlines been met. This was attributed to the SETA's lack of capacity.

Mr Mohlahla stated that R 3 911 550.00 was paid as levies by employees in the local government sector. This revenue had been allocated to the various municipal categories as follows : A: 10%, B: 15%, C: 20% and D: 5%.

The SETA has also received donor funding for a variety of projects. Spending on projects is monitored by provincial Committees who work in tandem with the project managers.

Discussion
Mr A Lyle (ANC) asked why the work skills plan was going to be evaluated by the CEO and wanted to know whether the CEO had the skills to perform this function. Further, Mr Lyle asked whether councilors of municipalities who did not make contributions to the levy fund, would also receive training. Mr Lyle continued by asking why training in financial management had been placed in abeyance and how SETA had spent the
R9m that had been allocated to them by the Department?

Mr Mohlahla replied that the department of Labour was assisting the CEO. Mr Mohlahla stated that it was not that the SETA did not want to give training in financial management but that it lacked the capacity to do so. Mr Mohlahla stated that the R9m was to be included in the budget for the period 2001-2002.

Ms Lobe referred to the report stating that SETA had from December 2000 to date trained 7000 people. Ms Lobe asked whether SETA had a mechanism to assess whether those who had received training had learnt something practical from the training. Ms Lobe also asked what was being done about the gender imbalances in municipalities and highlighted that less than 10% of top management in municipalities consisted of women employees.

Mr Mohlahla stated that the SETA was addressing the issue of training women and that the Board was attempting to solve the problem by engaging with various role players. Mr Mohlahla added that SALGA had a plan in place to capacitate women in municipalities.

Mr Bhabha expressed his view that the levels of training for municipal councilors had not been satisfactory. Mr Bhabha also highlighted that the proliferation of consultants in municipalities was an additional problem.

Mr Mohlahla stated that the SETA was attempting to avoid the unnecessary employment of consultants.

Ms Borman commented that SETA's report focused heavily on their future plans but failed to mention their previous achievements or current activities.

Mr Sithole expressed the view that SETA's overall responsibility was capacity building and hence SETA's programmes should be targeted towards people requiring the relevant training. Mr Sithole asked what impact the new legislation had upon their programmes.

Mr Mohlahla stated that the impact of legislation was tremendously difficult since most councilors had not been exposed to the legislative requirements of government before.

Mr F Van Deventer stated that a new approach was needed to train municipal councilors and suggested that experienced persons should work alongside those needing training.

Mr Lyle (ANC) said that Mr Van Deventer's recommendation would be disastrous since it implied that previous white councilors with experience would be allowed back into municipalities to train black councilors. Mr Lyle was strongly against this proposal.

Mr Bhabha stated that he believed Mr Van Deventer was suggesting a mentoring programme and pointed out that in many instances top positions were vacated and never filled.

Mr Carrim stated that he did not expect all the questions to be answered, as this was not the aim of a budget review.

The Chair acknowledged that SETA was a new structure and stated that the Committee was sympathetic to them. However, the Chair added that training was too large a task to be soley SETA's responsibility and indicated that the Department, SALGA and the Demarcation Board should be involved in the training processes. The Chair stated that it was difficult to evaluate SETA given the nature of it's presentation and intimated that the report itself did not contain enough information for the Committee to properly evaluate SETA's performance. Mr Carrim stated that SETA would have to appear before the Committee again when the required information was available.

Mr Mohlahla contended that SETA's presentation was perhaps not clear on the issues which the Committee wanted to engage in and stressed that SETA needed to restrategise so that in future it could engage meaningfully with the Committee.

Many of the questions posed to SETA by the Committee remained unanswered.

South African Local Government Association presentation
Rev Mkhetswa (Chairperson) and Mr Thabo Mokwena (CEO) presented to the Committee. Rev Mkhetswa set out the structure and activities of the Association.

Mr Mokwena elaborated on some of the activities mentioned by the Chairperson. He highlighted that SALGA was actively engaged in looking after the needs of employees during the transformation of municipalities to ensure that workers were committed to the process.

Mr Mokwena described how during the December 2000 elections, SALGA conducted voter education to councilors and municipality staff. SALGA is currently running capacity building programmes in municipalities and is also involved in policy development processes including the municipal transport policy and water policy.

Mr Mokwena stated that SALGA had engaged with Parliament and other government structures on a regular basis. In terms of SALGA's performance and mandate, the Department had conducted a study on the impact of the transformation process upon the Department. The results indicated that SALGA's mandate would have to be reviewed in light of the restructuring process. SALGA therefore suggested that the government make R5m available for the restructuring and reorganising of SALGA's current structure. Mr Mokwena felt personally that these allocations should not form part of the usual equitable share allocations given to SALGA.

Mr Mokwena explained that SALGA did have a budget review report but that it was not printed in time for the meeting. He stated that this bidget report would be available to the Committee as soon as possible.

Discussion
Ms Borman (DP) stated that it was difficult to assess SALGA's budgetary performance if the committee was without it's report. Ms Borman asked to what extent SALGA was involved in the training of councilors.

Mr Mokwena responded that SALGA's financial year coincided with the municipalities and that he would forward the report to the Committee as soon as possible. He asserted that there was no co-ordination of training taking place. SALGA had scaled down its training due to SETA's formation and training function. Mr Mokwena emphasised that SALGA was merely involved in the co-ordination of training and not the delivery of it.

Rev A Goosen (ANC) highlighted that transformation was a corporate activity and wanted to know how SALGA was assisting with transformation at local government level. He also asked how SALGA had monitored local government since 2000 and asked if SALGA had experienced any difficulties.

Mr Mokwena replied that the roles of various persons at local government level in the transformation process had been reconsidered.

Mr Bhabha (Mpumalanga, ANC) asked whether SALGA relied on contributions from local government associations how much money was required from associations to implement SALGA's programmes. Mr Bhabha also asked whether SALGA was satisfied with the functioning of local government associations.

Mr Mokwena stated that the participation of SALGA in the legislative process was not satisfactory but that achieving this was difficult because SALGA did not currently have a Parliamentary liaison. He added that the strength of provincial associations varied in strength from province to province and that SALGA was auditing the capacities of some of the associations.

Mr Smith (IFP) asked the value of SALGA's expenditures and how these expenditures related to SALGA's structure. He also asked for an organogram of SALGA's staff complement to accompany the budget report.

Mr Mokwena replied that figures on expenditure would be forwarded to the Committee and expressed that it was SALGA's wish to be audited by the Auditor-General. In the past private auditing firms have audited SALGA.

Mr Sithole (ANC) asked when SALGA intervenes as a local government representative in assisting ailing municipalities.

Mr Soloman (ANC) asked if SALGA had an early warning system to warn them when municipalities experienced difficulties.

Mr E Magashule (ANC) asked what role SALGA played in the delivery of basic services.

Mr Mokwena stated that SALGA provided technical information to municipalities to assist them in providing services such as water and electricity by 1 July 2001.

Mr Lyle (ANC) stated that in the past MEC's had failed to co-operate with local governments and wanted to know how the situation was different now.

Mr Mokwena stated that in the past SALGA had experienced problems but were working to solvethem. Mr Mokwena highlighted that the problems varied from province to province.

The Chair asked the following questions:
(i) Does SALGA implement a local government transformation plan taking into account other stakeholders?
(ii) Is the allocation of R15m adequate for SALGA?
The Chair stated that the issue of Councilor's salaries was a sensitive issue. The perception is that if councilors are paid by the national government then Councilor's would not be accountable to the local public. He added that the Committee would like to see greater participation by SALGA in the legislative process.

Many of the questions remained unanswered.

The Chair commented that the National Treasury should assist statutory bodies in coming up with a format to draft their reports in the future.

The meeting was adjourned.