Cross Boundary Municipalities Laws Repeal Bill: adoption, Utrecht Report: adoption

LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE
16 November 2007
CROSS BOUNDARY MUNICIPALITIES LAWS REPEAL BILL: ADOPTION, UTRECHT REPORT: ADOPTION

Chairperson: Mr S Shiceka (Gauteng, ANC)

Documents handed out:
Cross-Boundary Municipalities Laws Repeal And Related Matters Amendment Bill [B 25-2007]
Draft Report of the Select Committee on Local Government and Administration
[available at Committee Reports once published]

Audio recording of meeting

SUMMARY
The Committee deliberated on the Cross-Boundary Municipalities Laws Repeal and Related Matters Amendment Bill. Members sought clarification on the Matatiele situation and the Department of Provincial and Local Government advised that budget allocations had been adjusted to cater for the problems faced, and that the department was doing everything to ensure delivery of services. The problems faced in the Matatiele region were not unique to that region, although they had been highlighted by the controversy over the legislation. Members debated each clause and the majority resolved to approve the Bill. Mr Mzizi (IFP, Gauteng,) and Mr Worth (DA, Free State) cautioned that their silence in the meeting did not mean that they were in agreement, and that they would be contesting it during the debate in the House.

The Committee considered the Committee Report on the intervention into the Utrecht Municipality, which had been done following allegations of mismanagement, maladministration and fraud. The background to the matter was given, and the Report now recommended that the Provincial Executive Council should dedicate human and financial resources to the municipality, the Municipal Manager must conduct a skills audit and financial recovery strategy and that political parties should assist the Municipality in creating unity and conditions conducive to service delivery. It was noted that the time frame for intervention was 180 days. There was some doubt whether the Council had responded to the allegations or if there was a tacit extension of time. Some Members suggested that the Committee should not approve further interventions, but that the MEC should be made accountable. Others suggested that intervention should be allowed, but conditions be imposed. The majority of Members agreed that the intervention continue, with conditions. The Report was therefore adopted, with the necessary amendments in relation to the non-response by the Council, a correction of the reference to election (not appointment) of the Mayor, and a setting out of additional conditions that the National Executive should formulate a programme on how to provide assistance to provinces, that monthly reports on the intervention be provided to the NCOP and that reports on financial assistance by the provinces to the municipalities also be provided.

MINUTES
Cross-Boundary Municipalities Laws Repeal and Related Matters Amendment Bill (the Bill): Deliberations and adoption
The Chairperson stated that the Committee was being asked to adopt the Cross-Boundary Municipalities Laws Repeal and Related Matters Amendment Bill (the Bill). One of the issues raised in regard to this Bill was the issue of resources. He noted the recent incidents in the Matatiele area where the residents had protested against the transfer of Matatiele from the KwaZulu-Natal province to the Eastern Cape Province, mainly through fear that there would be inadequate service delivery due to scarcity of resources in the Eastern Cape Province.

The Chairperson asked the representatives of the Department of Provincial and Local Government (DPLG) whether they had anything to add.

Dr Petra Bouwer, Executive Manager: Compliance, DPLG, stated that he had taken the Committee through the Bill in detail during previous meetings and therefore nothing to add.

Kgoshi L Mokoena (ANC, Limpopo) stated that the nature of the Bill was such that it provided clear details of which areas would fall under which province. He thought there was no need to deliberate every clause again, as there had already been extensive explanation and discussion.

Mr J Le Roux (DA, Eastern Cape) asked whether through the consultation process Members were sure of what the people wanted.

Mr Z Ntuli (ANC, KwaZulu-Natal) noted that under Section 75 of the Constitution of South Africa that the mandate of the provinces was not required as the NCOP made the decision whether to pass the Bill referred to it by the National Assembly.

Kgoshi Mokoena confirmed that the National Assembly had held public consultations on the Bill.

Mr M Mzizi (IFP, Gauteng) stated that the NCOP was not required to consult with the provinces. He stated that the Bill was interrelated with the Constitution Thirteenth Amendment Bill. He noted that his party would vote against both Bills when they came up for debate the following week.

The Committee moved and seconded a motion of desirability.

The Chairperson asked whether the DPLG had checked whether the legislation proposed would be detrimental to the lives of the people in the area, or whether it would have a beneficial effect.

Dr Bouwer noted that the institutional support was required to support service by the province. The two provinces of KwaZulu-Natal and Eastern Cape had signed a memorandum of understanding to continue service delivery to areas that fell within their boundaries before the transfer, up until the end of the financial year 31 March 2007. He stated that adjustments were made to the budgets of these provinces to ensure that municipalities benefited from better service delivery. He noted that in the Matatiele Municipality a total of 123 sanitation projects had been implemented, and financial allocations were increased to benefit the area. He stated that R7,9 billion had been allocated to municipalities around the country to finance service delivery.

Dr Bouwer was of the view that the challenges faced in the Matatiele area were not unique only to this area, but were problems faced by every municipality. The problems had been highlighted by the media as a result of the Constitutional Court challenge to the original Constitution Twelfth Amendment Act and related Cross Border Municipality Act. The issues highlighted were not directly linked to the passing of this Bill that would transfer the area to the Eastern Cape Province. He concluded that the Department was already responding to the concerns of the people in these areas.

Kgoshi Mokoena made a plea to the Department to send a message to the Executive of government that the changes made by legislation should not adversely affect the people of South Africa. He believed that people should be informed that the shifting of areas did not mean that they would be negatively affected. He urged the Department to make it known that these changes would not adversely affect service delivery. He stated that development should be seen in these areas, and that people should enjoy services provided by the municipalities.

Mr Worth noted that people in the Eastern Cape were getting good services. He sought clarification on the issue raised by Dr Bouwer that financial support had been disbursed to municipalities. He was of the view that legislation required that the provinces retain moneys disbursed until 1 July of every year.

Mr Mzizi stated that there was a fear that the transfer of municipalities from provinces with more resources to provinces with less resources would lead to decline in service delivery. He stated that if people could be convinced that this would not be the case then there would be no problem. 

Mr Ntuli stated that a substantial share of financial support came from the National budget to provinces. He was of the view that there was a need to strengthen municipalities.

The Chairperson noted that the Committee should make a follow-up on the issue of service delivery. He stated that interactions with the DPLG should be ongoing to identify where the problems lay. He noted that resources varied with respect to each province. This should not be allowed to affect service delivery.

Dr Bouwer stated that the budgets had been aligned to cater for the changes brought about by the Bill. He confirmed to Mr Worth that there had been financial support given in terms of the Division of Revenue Act. The National Treasury had inserted a standard clause to anticipate changes in legislation. He stated that the concerns raised by the Committee had been noted and that the Department would continue engaging with the Committee on these and other issues.

The Chairperson then took the Committee through the Bill clause by clause. Members were in agreement with all the clauses of the Bill, and read out the mandates given to them by their provinces to pass the Bill.

Mr Mzizi and Mr Worth stated that their not raising objections at this stage must not be construed as acceptance of the Bill, and they would raise issues of contestation during the debate.

The Chairperson noted that the majority of the Committee had supported the Bill and the principle that at all structures and systems should be put in place to ensure that Matatiele fell under the Eastern Cape Province. The Bill would therefore be referred for debate to the House.
 
Utrecht Report: Adoption
The Chairperson noted that the report on the Utrecht municipality was to be debated the following week and that the Committee was required to adopt it before then. He gave a brief overview of the report to the members, noting that a draft had been made available the day before. He stated that Utrecht Municipality had seven Councillors. The Democratic Alliance and the Inkatha Freedom Party in alliance elected the mayor. The MEC was petitioned to initiate investigations on the management of the municipality. Investigations were conducted focusing on allegations of mismanagement, maladministration and fraud. The Mayor was asked to step down pending investigations.

A visit to the Municipality by some of the Committee members highlighted the serious problems faced in this municipality as outlined in the report. The Committee was faced with opposition from the IFP and DA on grounds that the intervention was unconstitutional. There were complaints also that the intervention brought about deterioration of service delivery. The Committee members had met with the Acting Municipal Manager who raised some issues. The Chairperson highlighted some of the findings of the Committee. These included payment of salaries to ghost workers, tension in the Council as a result of friction between the IFP and DA, lack of policies put in place by the council, non-submission of financial statements to the Auditor General, harassment of employees, unskilled managers, inability of municipality to collect revenue and unpaid wages.

The Committee had made the following recommendations:
-The Provincial Executive Council must dedicate human and financial resources to the municipality on a short, medium and long term basis
-The Municipal Manager must conduct a skills audit.
-Political Parties in the National Council of Provinces should assist the Municipality in creating unity and conditions conducive for service delivery
-The Municipal Manager must embark on and initiate a financial recovery strategy to broaden the tax base.

Discussion
Mr Ntuli sought to clarify that the Acting Mayor was not appointed but that he was elected through a democratic process.

Mr Mzizi noted that the IFP had requested further documentation on the grievances raised by other parties. He noted that the party was also awaiting the response of Mayor Msibi. He was of the view that the three parties represented in the Municipality; namely the ANC, IFP and DA should be educating people about politics. He stated that the Councillors should be informed that the management of municipalities was intended to benefit not themselves, but the people. He stated that the Acting Mayor was forewarned to attend meetings arising from the intervention. He stated that the Committee should act swiftly to address the concerns of the municipality.

Mr A Moseki (ANC, North West) was of the view that the municipality was in a state of anarchy. He said that the municipality comprised of people who were previously disadvantaged and that it was sad that there were allegations that the DA was promoting division.

Mr Moseki asked whether the issue raised by the Chairperson that the municipality was hand-picking employees from the streets was ongoing.

The Chairperson noted that this was happening before the intervention.

Mr Moseki asked what the time frame of the intervention would be, and what would happen when the period of intervention ended.

Kgoshi Mokoena noted that the Council required that the intervention be for a period of 180 days. Once the intervention period lapsed the Council would resumes control over the municipality.

The Chairperson noted that interventions must be done more quickly to allow systems to be put in place, to ensure the smooth running of the municipality. He noted that the MEC had raised issues of maladministration from the findings of their investigations. The Mayor and principal management were asked to excuse themselves to ensure that the staff could raise their grievances without intimidation. The Council was asked to act on the report. He stated that there was no way, given the attitude of the Council, that it would implement the changes.

Kgoshi Mokoena was concerned about the situation and thought it was high time that the root of the problem be identified. He was of the view that the MEC should perform his duties. He noted that the Committee should not approve any further interventions, given that interventions undertaken in other municipalities did not bring about change. He believed that the MECs should be called to Committee meetings to be accountable for their actions. The municipalities should not be so quick to rush to the NCOP for interventions before engaging with the provinces and the national ministers. He stated that the non-submission of audit reports by municipalities was unacceptable.

The Chairperson noted that the mandate of the Committee was to engage with provinces. He noted that there was a need to develop areas of focus to cater for such serious issues as those in Utrecht. He noted that the Committee had been influenced by the DPLG to look at municipalities, although the main focus should be on provinces.

Mr Worth strongly objected to the comment that the DA was causing division in the Utrecht area. He agreed with other members that service delivery was crucial to the betterment of the lives of South African citizens.

Mr Ntuli noted that the municipality was traditionally poor naturally. It had no capacity to collect levies, the district failed to give reports, and the demarcation was not viable as it was done to protect the interests of commercial farmers. He stated that this intervention was a blessing to the municipality and he hoped there would be change.

The Chairperson noted that there was need to review all municipalities and identify which officials were accountable.

Mr Mzizi believed that this Committee should not be used as a mouth piece. He felt that the Committee should not endorse any further interventions before quelling the fire in the municipality. He commented on the salary levels of some councillors in some municipalities.

Mr Ntuli requested that some amendments be made to the report. He stated that the municipality had been given 21 days to respond to the report of the MEC, and he felt that it should be specifically noted in the Committee’s report that the municipality did not respond. It should be corrected that the mayor was elected, and not appointed, on Page 4 of the report.

Mr Mzizi wished to clarify the question of 21 days. He stated that Councilor Mabaso had noted that the notice was drafted in a language they did not understand. The Council had replied to the MEC that they needed to acquire the services of a legal advisor to interpret what was required. The MEC acknowledged receipt of the letter. It was not clear whether that acknowledgement of receipt in fact could be construed as an extension of the period to reply.

Kgoshi Mokoena noted that the NCOP required intervention for a limited period. He noted that the intervention should only be allowed on condition that a programme was formulated on how to assist the provinces. His own province would only agree to intervention on condition that monthly reports on the progress of the municipality were forwarded, and also on condition that the Committee received reports on what the province had done in terms of financial support for the municipality.

Kgoshi Mokoena noted Section 100 of the Constitution, dealing with interventions.

The Chairperson noted that there were two suggestions raised by Mr Mzizi and Mr Mokoena. One was that the intervention should be disapproved and that the Committee should try to quell the problems of the Municipality. The other was that the intervention should continue with the conditions laid out.

Members were all in agreement that the intervention should continue with conditions put in place.

The report was adopted, with the necessary amendments and recommendations as discussed in regard to the non-response by the municipality, the election (not appointment) of the mayor, and the conditions, namely that the National Executive should formulate a programme on how to provide assistance to provinces, that monthly reports on the intervention be provided to the NCOP and that reports on financial assistance by the provinces to the municipalities also be provided.

The meeting was adjourned.