Matatiele Local Municipality: Service Delivery, Population, Status: Department briefings

PROVINCIAL AND LOCAL GOVERNMENT & JUSTICE PORTFOLIO COMMITTEES
11 September 2007
MATATIELE LOCAL MUNICIPALITY: SERVICE DELIVERY, POPULATION, STATUS: DEPARTMENT BRIEFINGS

Chairperson: Mr S Tsenoli (ANC)

Documents handed out:
Service Delivery Briefing
Presentation on population figures in the Matatiele area
Matatiele Local Municipality Status Report: service delivery[Part 1] & [Part 2]
Annexure A
Comparison of Public Investment between kwaZuluNatal & Eastern Cape province[Part 1]&[Part 2]

Audio recording of meeting

SUMMARY
The two Committees were briefed by the Department of Provincial and Local Government on a number of issues relating to Matatiele. A report was tabled, containing statistics obtained from different sources, focusing mainly on issues raised in the public submissions, and explaining the spending and allocations both to Matatiele Municipality and the provinces. It was noted that the population of Matatiele was around 195 000, and it covered 44.72 square kilometres. Matatiele town dominated the regional economy. Most of the area consisted of privately owned commercial farms. Matatiele municipality had an allocation of R10 million in the last year but had spent only R6.9 million. However, it had several projects still in the planning phase, when spending would not occur, and it had addressed backlogs in sanitation and water, and was building a community centre, roads and stormwater drains. An engineer had been deployed to the area to speed up development. An indigent policy was in place. The budget had increased to take account of the increased population resulting from the re-alignment. The Equitable Share had also increased, and the Municipal Systems Grant had been increased, with the delays in the last year having been explained and a business plan now being put in place. Matatiele had previously been largely dependent on the Municipal Infrastructure Grant, but it was trying to exercise financial management, had consistently prepared and tabled budgets and had submitted annual financial statements on time to the Auditor General. The Department was supporting all cross border municipalities through Project Consolidate. This included infrastructure and institutional support, as well as Councillor training. The positions of Municipal Manager and CFO had been filled and other vacancies were being advertised. Statistics were given for clinics, household services, social welfare grants and support by the Eastern Cape to the Municipality. Details of spending across all the provinces, which provided both actual figures and comparisons between Eastern Cape and KZN, and comparisons with the rest of the country, were tabled. There was not a great divergence in provincial spending between Eastern Cape and KZN.

Questions raised by members related to the number of councillors, and the basis on which they were determined, the role of the Independent Electoral Commission, slow delivery of services, access to information, the service delivery by other departments, the demographic profiles and the benefits from the programmes. The Committee commented that better information must be given to local residents, and noted that services delivery plans were aligned with the Eastern Cape. The Bills would be voted on later in the week, with the two Committees sitting together but only voting on their relevant Bill.

MINUTES
Briefings by Department of Provincial and Local Government (DPLG)
The Chairperson indicated that the legislation was based on issues of service delivery, and it was important for the Committees to get an update, when considering the Bills.

Mr Myron Peter, Executive Manager: Local Government Administrative Systems, DPLG, indicated that Annexure A to the Status Report contained information on the Municipal Infrastructure grant (MIG) allocations. Appendix 1 contained information extracted from the recent publication of the provincial expenditure review. This included spending trends and non-financial information on a wide range of function of the provincial government, and some highlights of spending by both Kwazulu Natal (KZN) and Eastern Cape. Appendix 2 contained a list of social grant pay-points in the Matatiele areas.

Mr Peter said that this report contained statistics obtained from different sources over the past four to five months. Some of it formed part of a larger report on cross boundaries that went to Cabinet. It was complemented by recent information from the Provinces and the various units in the Department. The Department had tried to focus on issues referred to in the public submissions. Many of the comments had dealt with cultural issues and ties, but some had also touched on service delivery, including education, hospitals and clinics.

Mr Peter noted that the Constitutional Court ruling was handed down on 18 August 2006, calling upon government to rectify the procedural defects in the passing of the Constitution Twelfth Amendment Act and boundary re-allocations. This resulted in the Constitution Thirteenth Amendment Bill (the Bill) and the Cross Boundary Municipalities Laws Repeal and Related Matters Amendment Bill (the CB Bill). Public participation was necessary for this process.

The total population of Matatiele was around 195 000, and it covered 44.72 square kilometres. Matatiele town dominated the regional economy. Unemployment figures were around 13%. Most of the area consisted of privately owned commercial farms.

The previous government had offered two libraries, nineteen schools, police stations, one provincial hospital, one mobile and one municipal clinic. The social grants were paid at post office and hall. None of the other departments had offices in the area. There was little service delivery

Ms Thiesa Janse van Rensburg, Manager: MIG Project Registration, noted that the allocations were deposited directly into the accounts of municipalities and the objective was to eradicate backlogs and give basic service delivery. The Matatiele municipality had an allocation of R10.1 million last year, and had only spent 6.9 million. It clearly did not have capacity to spend. From April, nothing of the 2007/08 financial year had been spent. The MTEF allocation had increased significantly, from R11.9 for this year to R16.05 million in 2009/10. The municipal infrastructure grant (MIG) could be used in three ways. It would cover residential areas, including water reticulation, sanitation, water for households and roads. Public facilities would include community halls and sports. The grant could also be used for business enterprise infrastructure development and support. The MIG was a combination of the previous Municipality grant, plus water and sanitation and roads grants.

In the 2005/06 year the municipality had received the funds through the Sizonke District Municipality, when it still fell within KZN. Alfred Nzo District Municipality also had some projects in the areas. In January an engineer was deployed in the area, and there was an increase in work done from January to April. He left in May and the expenditure dropped again. Department of Public Service and Administration (DPSA) had deployed an engineer to the area in July, and projects were moving again. The MIG grant allowed a slice of the grant to be used for Project Management, but the municipality had no unit, nor a project manager. A position for a technical manager had been advertised, but no appointment was yet made.

Eight of the MIG funded projects were completed by Sisonke District Municipality, and these were valued at R23.1 million. Alfred Nzo was currently implementing 6 projects, which were included in the main report. Apparently a few were into construction. They represented 17.91 million. The municipality was constructing further projects, amounting to R75 million, but most were still in the design stage. Once the projects were into construction the Municipality could start spending the funds. The backlog position was set out, comparing the 2005/06 and 2006/07 years. Backlogs in water and sanitation had been addressed to some degree. Due to many people having moved in to the area, there was an increase in electricity backlogs to 2 021 needing services. Achieving full access to electricity by 2010 was possible, but there were several challenges, including insufficient programme funding, the need to build infrastructure in the rural areas, and the need to increase municipal capacity without impacting on service delivery. Efforts were being made to assist the municipality. It was pointed out that the MIG could not be used for electricity, and it was between municipality, Eskom and the Department of Minerals and Energy to sort the situation out. The types of projects being implemented at the moment included access roads and storm waters, about six projects for roads alone, the Maluti Civic Centre (in design), about another five roads projects in design. The Municipality was not at this stage addressing water and sanitation backlogs. Electricity in the rural areas was provided by Eskom and the reticulation of electricity in the towns was the responsibility of the district municipality.

Mr Peter tabled the statistics (in the main report) for free basic services. The municipality had an indigent policy in place, and about 180 000 indigent households were included in this municipality, with about 4 3 51 being reflected on the register. Water and sanitation was provided, 814 households received free basic refuse removal, about 459 received free basic electricity from the municipality, and 304 received it from Eskom. Solar energy was being used in 1002 households. Free water was supplied by the district.

Mr William Ramphele, Senior Manager: Municipal Finance Monitoring, DPLG, noted that the budget had increased, from R46 million in 2005/06, to R84 million (35% increase) in 2006/07. The 2007/08 budget was about 168 million, to ensure that the population inherited was taken care of. . The operating budget was previously 83%, so only 17% was going to service delivery. That had changed in the 2007/08 year.

The Equitable Share dealt with operational costs and basic services, such as water, sanitation, refuse and electricity. It was unconditional, so the municipality could decide what it could allocate and where. This had increased by 112%, and was at R18 million in 2006/07, to reflect the change of population. In 2007/08 it would increase to R32 million.

The Municipal Systems Improvement Grant (MSIG) was provided to try to implement the systems required by the Municipal Systems Act, including management reviews and other policies. The amount allocated totalled R734 million, although only 77% was spent in 2006/07. Another allocation had been made, but there was a necessity for a business plan to deal with the balance. Delays had been explained.

Mr Ramphele noted that the DPLG analysed the grants, and compared them to the total capital budget. Matatiele had been largely dependent on the MIG, rather than using their own funding. That was beginning to change as the municipality had begun to make investments. The operating grant (usually the equitable share) dependency was around 27%, (compared with the ideal of 20%). DPLG had stressed to Matatiele that it needed to start containing costs, especially salary costs, which should be below 30% of total cost. Matatiele had been one of the municipalities that was trying to exercise financial management. It had consistently prepared and tabled budgets in terms of the Municipal Finance Management Act (MFMA). A key governance issues was around the Annual Financial Statements, which had also been timeously submitted to the Auditor General. It had received an unqualified audit in 2004/05, but a qualified one in 2005/06. The qualifications related to the conversion to Generally Recognised Accounting Practices (GRAP) and some lack of controls.

Mr Peter noted that the Department had been making efforts, through Project Consolidate, to support Matatiele. This had included technical support, mostly infrastructure and institutional support, as well as Integrated Development Planning (IDP) and Local Economic Development Support (LEDS). All cross boundary municipalities would get more technical support. DPLG would be deploying engineers. In regard to Councillor development, there were now 48 councillors, of whom 21 were old, and 27 were new. The councillors needed more training through the Municipal Leadership and Development Programme. The IDP had been adopted and had a good rating from the Department. There was a strategy for LEDS. The Provincial Department had successful interaction with the ward committees and traditional leaders, community development workers, business and the municipality. It had deployed 15 community development workers. Matatiele had filled the positions for Municipal Manager and CFO. The Municipal Demarcation Board had done some ratings, and both these posts were held by people with experience. There were vacancies in community services, technical services administration and corporate services. Current projects were ongoing, with focus on schools, housing, access roads and community centres.

Mr Peter then tabled figures relating to services in Matatiele. The number of households having weekly refuse removals was above the national average. The percentage of households with access to piped water in dwellings was 51%, compared to the country average of 32.8%. The percentage of households with connected sewerage was 64.61%, compared to the national average of 49.08%. It had 55.2% electrification, below the national average of 69%.

Mr Peter noted that public submissions on the Bill had raised the question of clinics. There were two fixed clinics, one mobile clinic and 48 community health workers. A new hospital was planned. The utilisation rate was quite high. A comment had alleged that the hospital was falling apart. The statistics proved that there was 82% bed utilisation, peri-natal mortality was 3%, and the budget allocation was R46 million. DPLG's assessment was that the hospital was functioning as expected, and the reports did not indicate a serious cause for concern.

With regard to social welfare grants, comments were also made that these were inadequate. The South African Social Services Agency had reported that there were 124 pension pay-points, of which 4 were at community halls, and 5 in churches, and the remaining were at private owned, government buildings, or open spaces.

There were also recent reports from Eastern Cape showing that the province had given support to the municipality in the areas of ICT (valued at R1 million, 60% complete), financial statements, policy development, the asset register, linking to good financial management support, ward committees, and in the area of institutional performance management systems. For 2007/08 R138 000 had been targeted for development of bylaws.

Mr Peter said that DPLG had a good picture of where matters were and where they would move.

Mr Peter then tabled details of spending across all the provinces, which provided both actual figures and comparisons between Eastern Cape and KZN, and comparisons with the rest of the country. The latest review showed that Eastern Cape and other provinces were catching up on social services and infrastructure spending.

Eastern Cape and KZN carried the biggest schooling burdens. They also carried the largest no-fee policy schools. Eastern Cape had repaired 350 km of roads in the last year and both this province and KZN would increase their road spending. He noted that the learners were more sparsely distributed, and the ratio of learners attending schools was lower than in other provinces. There was little difference between the two provinces in terms of the schooling. In KZN the education budget was fastest growing but the province would take longer to reach the national average. The gaps in funding per learner were narrowing over time. KZN was spending 0.90c per day per learner, compared with R1.17 in Eastern Cape, on child nutrition programmes.

In respect of spending on health, this was 18.2% in Eastern Cape and 10.2 in KZN. In primary health care, Eastern Cape and KZN doctors and nurses had a high workload. The expenditure and cases recorded were tabled.

In terms of social development, 19% of elderly people resided in KZN, and 19% in Eastern Cape. However, they had only 113 old age homes. KZN had more counselling services, with Eastern Cape coming in second. There was a community-based approach in both provinces. In respect of services to children, eastern Cape had 27% of all national Early Childhood Development sites, with KZN having 12%. There was however an inequitable sites-to-child ratio, and that would have to be addressed. Housing was intended to grow by 18.6% in Eastern Cape and 18.9% in KZN. Spending on agriculture and land was predominantly in the rural provinces. The largest share of spending on roads was in Eastern Cape, KZN and Limpopo. Eastern Cape and KZN were spending around 77% of provincial expenditure on social services.

Discussion
Mr L Landers (ANC) noted that there was a population of 194 000. With the incorporation of Maluti, there were now 48 councillors instead of 5 councillors. He asked why there were so many, as each Councillor was representing about 4 000 people.

Dr Petra Bouwer, Executive Manager: Compliance, DPLG, tabled another document reflecting the population figures. He noted that there would be differences in the census figures, as they may have been taken at different times. Before re-alignment, Umzimkhulu had 174 000, Umzimvubu 376 000 and Matatiele 16 000 people. The old Matatiele was small, and had only a plenary council of 5 councillors. With Umzimkhulu being located in KZN, the figures did not change. However, the Umzimvubu realignment had adjusted these figures, and so the reconfigured Matatiele had now risen to 178 000 people. This added on to arguments raised about which part of Matatiele might be re-located, which also raised concerns about cohesion of communities. It also had a bearing on the number of councillors. The Minister had to publish a broad formula for number of councillors in the municipality, which was based not on population figures, but on registered voters. If there was a large proportion of youth, not registered as voters, that would skew the figures. Once the formula was published, the MECs could deviate 20% either side. Once the number of councillors was determined, that set the number of wards, and the Demarcation board would delimit the wards according to the number derived. Therefore the formula was based on voters, not population figures.

Imam G Solomons (ANC) noted that voting was not compulsory, and if there was low voter registration, a municipality could end up with few councillors. He did not understand the logic, and suggested that basing the figures on registered voters could exclude large numbers of voters.

The Chairperson noted that there was a 20% variable, and this would allow the MEC to recognise a possible default.

Dr Bouwer said that this was why institutionally the Independent Electoral Commission (IEC) would try to raise awareness, and to encourage voter registration. Broadly speaking, the whole system of local government was driven on voter registration. Added to that was that the last turnout for voters in the local government elections was very high. The principle of using voters would have to be reviewed across all systems, if it was suggested that this was necessary. It was also linked to wards, as certain numbers of voters must be put together in a ward. This principle could be raised under the White Paper process.

Mr S Swart (ACDP) noted that there was concern with slow delivery of services. He asked about the MIG allocation. Whilst a rosy picture was painted, he noted that the qualified audit report had noted lack of controls. He asked for clarification on the MIG allocation between district and local municipalities. There had been no spending on MIG allocation this year. He asked how this would be addressed. The comments on Annexure 1 noted that an engineer was allocated only until April, that there were vacancies, and that sanitation would have to be quadrupled for the targets to be achieved.

Ms van Rensburg said that until 2005/06 there was no allocation, except to the district municipalities. The spending was dependent upon the projects in construction. It would take about 18 months to be able to start spending, as in the planning phases there was little spending. The lack of spending did not mean that Matatiele could not deliver, but that it was still planning. It had only received the allocations last year, and expenditure would begin only in the 2007/08 year. The full allocation for 2006/07 had been spent by the District, and R11.6 million of the 07/08 allocation had been spent by the District. The lack of capacity was being addressed by DPLG sending in engineers.

Mr Ramphele noted that apart from the deployment of technicians, the Department had also tried to encourage municipalities to do forward planning, commit for projects up front, and register them now, to circumvent delays. The term of implementation should be within the same financial year.

Ms van Rensburg added that Matatiele was fully committed for the 2007/08 financial year and already R10.5 million committed for the 2008/09 year. Some projects were also registered for 2009/10.

Mr S Mshudulu (ANC) noted that people had raised concerns about service delivery. Information update was a challenge in the Department, and people on the ground were unable to access the information. He noted that the area was dominated by farms, and he suggested that resource allocation must be investigated. Averages in the Treasury report might result in distortions.

Mr Mshudulu noted that the ward committees were expected to represent the very people who were complaining. The information on the ground was that these were not properly working.

Mr Mshudulu noted that there was apparently a 5km radius between clinics. He said that the low figures for the hospitals might reflect that doctors were referring patients elsewhere.

Mr Mshudulu was not sure whether the spending was dependent on the costs; putting infrastructure in a rural as against an urban area differed.

Mr Peter said that the provinces would tend to shift the money allocated. He noted that there would be general issues raised in different parts of the country, as well as specific matters raised for Matatiele.

Ms M Gumede (ANC) noted that there were fourteen pay points in open spaces. She was concerned whether there had been any improvement to that situation. No times were given to the people, who had to queue for hours. She asked what alternatives the department was considering.

Mr Peter noted that this was dealt with by the Social Security Agency, and he had no idea of their plans. Mobile units handled the pay points.

Ms Gumede noted that there were only "two death cases" reported - and she requested clarity.

Mr Peter said that this information had been given in response to an enquiry about statistics, and it related to a particular period. He had not enquired the cause of the deaths, and he would be able to follow it up if needed, and inform the member directly.

Mr M Swathe (DA) asked about the demographic profile. He noted that the population of about 194 000 were using only one hospital and one health clinic. He noted that there had also been complaints.

Mr Swathe asked how many people had benefited from the LED programme.

Mr Peter said that he could not give a figure at the moment, but he could get that information and supply it to the Committee.

Ms L Mashiane (ANC) agreed that the population and the facilities did not appear to be in proportion. There was nothing stated about other departments that could assist - such as the department of Labour, Home Affairs offices, all of which were practical problems to the people in the area.

Mr Peter said that he was not knowledgeable about plans by those departments. There was a common problem around the depth and reach of national departments. Government Communication and Information System (GCIS) and DPSA were busy rolling out the Thusong Centres throughout the country, where different departments would offer services at a central point. Funding was being requested. The DPSA, as part of its rollout on the Single Public Service, had discussed an access strategy, that was closely linked to the Thusong Centres.

Ms Mashiane stressed that the community clearly were not happy with their current situation.

Mr Peter added that public participation was part of the report that the Province had sent, as a consequence of the meeting between the Premiers and the Minister. At that meeting, all premiers committed to reporting on the matters in the implementation protocols. One of the aspects of the protocols was to what extent there had been meetings with and discussion with the communities when the change had to take place. The dynamics would change from time to time. While some of the community might be happy with the interaction, others might be unhappy. The Eastern Cape had made the best effort to deal with the communities to help with the transition.

The Chairperson said that the Demarcation Act required alignment of service delivery. He did not know if there were time frames. There were apparently road shows being done by DPLG to consider master plans for supporting the local government, which would include service delivery plans. He would like to hear from the DPLG about those.

Mr Peter said he had noted that and would plan for reporting.

Ms N Mahlawe (ANC) said that some of the information might not be fully up to date. She asked whether this information presented now should assist the Committee in passing the Bill.

The Chairperson said that DPLG had sourced this information from both provinces and municipalities, and it was accepted that at times the information might not be fully up to date, but this was not the fault of the DPLG. Part of the reason for examining this information was indeed to help the Committees to arrive at their decisions about this Bill.

Dr Bouwer noted that these reports related to the re-configured Matatiele. Therein arose some of the challenges, to consider the comments presented to the two Committees. DPLG had said many times that due to technical reasons the Constitutional Court case was formulated only in regard to Matatiele. What was before the Committee was much wider, dealing with Umzimkhulu, Umzimvubu and other areas. If the comments were that things should stay as they were, this meant the old Matatiele of 16 000 people. Another comment referred to "rural areas" having supported the situation, but there was no reference to which rural areas. If people wanted things to stay as they were, then there was a much larger community affected. A large portion of the report back was related to municipal services, and the newly configured Matatiele was providing that. The location in one province or the other would not change the municipal responsibilities. Mr Peter had examined provincial services, and noted that there was very little difference between the two provinces..

Dr Bouwer said that he had started questioning some of the comments, as to whether they were speaking of the 16 000 who called to return to KZN, or whether this also included a portion of the old Maluti.

Mr William Ramphele noted that the 13% mentioned in the presentation for employment related to the economically active population.

Mr Ramphele noted that access to information would be dealt with as DPLG looked at the results of the road show. Clearly other departments needed to be part of the process. The police stations were differently demarcated. Departments had been encouraged to embrace the former cross-boundary municipalities so they had a better sense of what was going on.

Mr Mshudulu reflected on the commitment. Matatiele had apparently already made commitments on the forward planning. The IDP must be aligned with both the District and Provincial plans. He asked if this was in line with KZN or Eastern Cape.

Ms van Rensburg said that this was in line with the Eastern Cape.

Mr Peter noted that in the initial presentations, it was noted that most of the service delivery issues and concerns raised required an institutional response, with government needing to re-think its approach. Separating the matter of service delivery requiring institutional response was therefore important, but it would apply throughout.

Ms F Chohan (ANC) thanked the Department for a useful briefing. There were certainly some misgivings about the veracity of the information, but it was a starting point. This information would also be fed into the oversight mechanism of the Portfolio Committee. Submissions had been received. Most of them were a "ballot" type of submission, which did not help this process. The Committees had discussed public participation and it was clear that the process should encompass the ability to persuade the Committee one way or the other, based on rational arguments. Simply "yes or no" submissions did not help the Committee to decide. The second category of submissions had raised ethnicity and cultural links, suggesting that there should be a homogeneous province, which was not necessarily persuasive. The third category raised service delivery. Here there were a number of issues that the Committee had to deal with. If the result of the boundary change was that things were falling apart, then clearly the Committee would need to reconsider the change. This presentation had indicated that matters had not fallen apart since the boundary change. The budget allocations and committals indicated that things would improve in future, although it was clear that there were still challenges. Some submissions, although not explicitly stating the problem, indicated that there was unhappiness with education and the amount of provincial spending, and free schooling. Mr Peter's points were therefore very important here. The evidence was that the two provinces were similar in their expenditure on education, with Eastern Cape doing better in some areas. Therefore people were not necessarily being unfairly treated, in the objective sense, and there were no huge disparities apparent from the figures. While it was important to look at the challenges, the Justice Committee noted that the issues raised as concerns were addressed in this presentation, and she expressed appreciation for all the work, which was done at short notice.

The Chairperson said that quality of information was always affected by under-reporting or weak reporting, or timeous distribution of information, and this was why the State Information Technology Agency had to work on inter-operability issues. Accessibility was vital. The security of transactions was also important. He agreed that long lead-times for planning were often not appreciated by people on the ground. Service delivery was the original objective in doing away with cross boundaries. The political issues must be addressed frankly and openly. The Bills would be voted on by the committees in joint session on the afternoon of the 13 September (although only the relevant Members would vote on the relevant Bill). They would also be discussed in the same way in the House on the 20 September; with the Constitution Amendment being dealt with first, followed by the Cross-Boundary Municipalities Laws Repeal and Related Matters Amendment Bill.

The meeting was adjourned.