Nelson Mandela Bay Metropolitan Municipality on COVID-19 response plans

Cooperative Governance and Traditional Affairs

18 June 2020


Meeting Summary

Video: Portfolio Committee on Cooperative Governance and Traditional Affairs, 18 June 2020
Audio: Nelson Mandela Bay Metropolitan Municipality on COVID-19 response plan

The Nelson Mandela Bay Municipality (NMBM) presented its Covid-19 response plans to the Portfolio Committee on Cooperative Governance and Traditional Affairs. The municipality had the highest number of infections in the Eastern Cape province. In addition to being the Covid-19 hotspot in the province, the municipality was also facing the consequences of a severe drought.

The municipality said it expected a reduction in revenue collection from the residents, and that this would have a negative impact on the delivery of services. It described the approach it was implementing to deal with the impact of the pandemic. The short, medium and long-term plans to combat the city’s water crisis were also discussed, and the assistance required from provincial and national governments were discussed.

The municipality argued that while the Constitution reserved various functions for the concurrent competence of national and provincial governments, the COVID-19 pandemic had revealed a need to devolve such functions as health, social development and human settlements to municipalities.  During the pandemic, NMBM had been compelled to go beyond its mandate and outside to perform such functions as the provision of shelter to the homeless -- functions that were unfunded mandates, and which exposed it to risks of material audit queries.

The Committee raised concern at the various leadership and political challenges facing the municipality. The municipality had an Acting Executive Mayor and an acting municipal manager. The Committee wanted to know when these leadership issues would finally be resolved. Members also asked for in-depth details as to where temporary houses were being built, and where the chemical toilets and water standpipes were located, and where protective equipment was being distributed. The municipality had also received around R233 million in disaster relief assistance due to the drought, and was encouraged by the Committee not to underspend by the end of the financial year.

The Minister of Cooperative Governance and Traditional Affairs said that the President was sending out a delegation of Ministers and Deputy Ministers to support different district municipalities, to support them in their response to the Covid-19 pandemic.

Meeting report

The Chairperson welcomed the delegation from the Department of Cooperative Governance and Traditional Affairs (COGTA) and the administration from the Nelson Mandela Bay Metropolitan Municipality. The Committee was in the process of concluding meetings with all the cities that had been declared Covid-19 hotspots under the Disaster Management Act. It appreciated the work the municipality was doing in keeping people informed about the Covid-19 cases through the municipal website. It was clear that it was hard at work combating the coronavirus through the work they were doing on their website, where there was a dedicated Covid-19 webpage which detailed the work of the Disaster Management Advisory Forum in coordinating the local responses to the pandemic. The Committee commended the municipality on this achievement, as no other city was doing the same.

On the webpage, there was information educating people on the need for masks, social distancing, contact tracing and other measures to raise the level of awareness on the pandemic. The Chairperson also observed the WhatsApp emergency contacts, support centre and the hotline that were all on the website. The website was informative and needed, due to the fact that the municipality was a Covid-19 hotspot within the Eastern Cape province.

She said it was dismaying to note the incidents of stigmatisation against people and families who had tested positive for Covid-19. If the leadership in the municipality did not do anything to decrease the stigmatisation of people who were tested positive, it would hinder contact tracing efforts as people would not come forward due to fear of stigmatisation. The Committee encouraged the municipality leadership to intensify its public education and awareness campaigns.

The Committee also noted the severity of the ongoing drought which had precipitated a serious water crisis in the metro. There was a backlog of 15 000 reported water leaks across the metro. On a monthly basis, the metro lost 33% of its water consumption due to water leaks. This was unfortunate due to the increased need for water usage during the Covid-19 pandemic.

Another concern was the leadership challenges within the municipality arising from the vacancy of the Executive Mayor. The municipality also had an acting Municipal Manager. How long had that position been vacant? The Minister had also sent correspondence to the municipality urging them to resolve their leadership issues. The Committee wanted an assurance from the municipality that they would be addressing the water shortages and leaderships vacancies. At the end of the meeting, the Minister and Deputy Minister would be allowed to give their input on the state of the municipality.

Nelson Mandela Bay Metropolitan Municipality on its COVID-19 response plan

Mr Thsonono Buyeye, Acting Executive Mayor, said that the spread of Covid-19 in the city was a serious issue. The City was concerned, as it was the epicentre of the Covid-19 cases in the Eastern Cape province. The National Lockdown, that was pronounced by the President, had afforded the municipality an opportunity to put systems in place to make sure that it was prepared for a spike in Covid-19 cases. It was facing a number of challenges. He had been personally been affected by Covid-19 and was currently under isolation. One of the mayoral drivers that he had been working with on a daily basis had died due to the virus. Two other drivers that he had been in contact with had also tested positive for Covid-19. The presentation was a brief outline of the municipality’s plan to respond to the outbreak of Covid-19. 

Mr Shane Brown, Head: Disaster Management Forum, NMBM, presented the municipality’s Covid-19 response plans to the Committee. The outline of the presentation included the municipality’s context for Covid-19, and the multi-sectoral plan for the metro. The short, medium and long-term plans in combating the water crisis were discussed. The revenue collection trends and the economic recovery plans were also part of the presentation. Finally, the assistance required from the provincial and national governments was discussed. The presentation stated that the Covid-19 pandemic had added a burden on to an already water-scarce municipality.

The maps in the presentation showed a direct relationship between the incidence of Covid-19 cases and areas of poverty in Nelson Mandela Bay. Traditionally, the Municipality and the Province had spent the majority of its capital funding on projects that serviced the poorest areas of the City. It was these areas where the COVID-19 outbreak was manifesting the most. Future capital budgets were also biased towards these areas.

No budget had been prepared for COVID-19 in the 2019/20 adjustment budget. The municipality had approached National Treasury for reprioritisations of the Urban Settlements Development Grant (USDG), and authority had been granted to re-prioritise an amount of R231 million of the grant to respond to COVID-19. Covid-19 lockdown regulations, coupled with the impact of the lockdown on the entire economy, had necessitated a total review of the draft budget and service delivery projects and programmes to match the collection rate, which had been lowered to 84% currently.

Based on the plan that had been submitted to National Treasury for reprioritisation of the USDG, the following progress had been made:

  • 500 chemical toilets and water standpipes had been provided, giving access to water and sanitation to households.
  • Service providers had been appointed and were busy with the installation of precast toilets to 2 000 households across the metro.
  • 40 temporary shelters had been provided to vulnerable elderly community members, with a corresponding appointment of home helpers through the Expanded Public Works Programme (EPWP). 
  • 15 water tankers had been provided to continuously fill 108 JOJO tanks provided by the Department of Water and Sanitation.

Covid-19 intervention report by sector -- public health:

  • Fully deployed team fulltime in the cluster. A cluster could be a number of wards.
  • Masiphatisane approach, where all stakeholders form part of the team.
  • Core health team, with named leader and all categories – medical officers, professional nurses, enrolled nurses, community health workers and health promoters. Local and Cuban doctors had to be incorporated, both family physicians and epidemiologists.
  • Municipal resources, such as EPWP and environmental health practitioners, had been deployed. The Municipality was also assisting with alternate housing as part of the improved spatial redistribution, to improve quarantine and social distancing.
  • Local councillors would lead in community communication and engagement. This assisted with ease of entry, community buy-in and ensuring de-stigmatisation.
  • The team goes into the cluster area and combs it, ensuring that everyone in the cluster has been screened.
  • Team was resident and did follow-ups and engages through local councillors with new entries into the area.
  • The South African Police Service (SAPS) was part of the team to ensure compliance with lockdown protocols, and assists in situations of resistance, especially for isolation, quarantine and social distancing (e.g. in malls).

Economic action and recovery

A Business Recovery Centre (BRC) to help local companies get the assistance they needed to re-open or stay open was being established as a one-stop shop. This was:

  • To facilitate access to local, provincial, and national resources for businesses during and after the COVID-19 pandemic.
  • To focus on case management, which was an approach that provided business with financial and technical assistance on its own turf, and to dispense recovery staff to individual businesses
  • To carry out COVID-19 business recovery functions through a centralised location.

NMBM would work with organisations such as Community Futures, and other national agencies, to develop loan programmes. It had to partner with the private sector to ensure an appropriate response and speedy recovery, and would engage businesses to establish a Business Emergency Response/ Recovery Team (BERT). It would identify the roles and responsibilities for the economic development organisations; other business, trade and professional organisations; individual business owners and operators; and non-profit organisations that support economic resiliency. It would also engage a variety of lending sources, such as local banks, credit institutions and other alternative financial institutions to identify available lending products and financial terms.

A differentiated approach would be adopted for support to established businesses in specific sectors, and the small and medium enterprise (SME) sector and informal economy. There was consideration of various incentives and/or tax holidays tailor-made for specific sectors, such as tourism.

Experiences since declaration of disaster

While the Constitution reserved various functions for the concurrent competence of national and provincial governments, the COVID-19 pandemic had revealed a need to devolve such functions as health, social development and human settlements to municipalities.  During the pandemic, NMBM had been compelled to go beyond its mandate and outside to perform such functions as the provision of shelter to the homeless -- functions that were unfunded mandates, and which exposed it to risks of material audit queries.

Inter-Governmental Relations (IGR) needed to be strengthened, as it had become evident during this period that high collaboration with stakeholders provided effectiveness in service delivery.

There was a need to address under-development and segregation in the development patterns, as it became evident, though no formal study had been undertaken, that poverty-stricken communities were vulnerable during disasters.

Over-reliance on grant funding was unsustainable and the municipality had to expand its revenue base.

Robust plans had to be undertaken to unlock development through the expansion of economic activity, and implementation of catalytic projects must be fast-tracked to boost the economy.

Assistance required from local and national government in the need to prioritise the transfer of all 2019/20conditional grants to the NMBM. Government departments also had to prioritise the payment for rates and services.


Mr K Ceza (EFF) said that there was a section in the Municipal Finance Act, section 56 of 2003, which talked about the defrayment of unforeseeable and unavoidable expenditure authorised in terms of section 29. What unforeseeable and unavoidable expenditure had been incurred by the municipality during the Covid-19 pandemic? What had been the reasons for this expenditure, and how much had it been? People were usually making an income on a daily basis -- what measures had been put in place to cushion residents, as they were not receiving income? He welcomed the water conservation campaigns, but he wanted more information on the tankers. The presentation had said that there were 2 000 water tanks across the metro, and that made it look like everyone was covered. However, there were informal settlements where there were no water tanks and very few toilets. There was no personal protective equipment (PPE), masks or sanitisation equipment for people who resided in those areas. How had the municipality arrived at the number of 2 000 water tanks in comparison to the population number? In many areas there was no special allocation for the disabled as well. There was an issue in ward 32, where child-headed homes and orphans had not received food parcels. How many food parcels had been distributed in that ward, and when were they given? He was receiving complaints from people in ward 32 that they were registered and still not receiving any food parcels. There was also a relocation process taking place in the municipality. Human Settlements were said to be in charge of that process. There was an oversight at the area where people were being relocated -- there were no toilets, no water or electricity. There were no essential services. Could the municipality explain that relocation process?

Ms G Opperman (DA) said that on slide 46 of the presentation, a breakdown of the challenges facing the metro had been given. Which government departments owed them for rates and services? How much did it come to? She wanted a summary of all the unfunded mandates which were likely to expose the municipality to material audit queries, as was mentioned on slide 44. On slide 21, point d, it was mentioned that the municipality continued to fill the water tanks through water tanking, and that the metro had been declared a disaster area. Did their current supply meet the demand? How many leaks had it repaired in the northern areas in the past two months? On slide 15 it was stated that 80% of the budgeted vacancies were frozen. How would this impact on service delivery? What was meant on slide 6, by ‘6 010 buckets in circulation’? On slide 6, it stated that there were over 76 000 households. What was the current housing backlog? What were the municipality’s plans with regard to spatial integration? Was the municipality getting the necessary assistance from the Department of Housing? In the northern areas, where the highest poverty, unemployment and now highest outbreaks were, what Covid-19 relief measures and assistance were being given to the people living there? What investments were being made there?

Ms H Mkhaliphi (EFF) said that there were political challenges within the municipality. The Committee wanted to know how the leadership issues in the metro affected the council, and also the people in the community. The presentation had stated that the municipality asked for R231 million from National Treasury to reprioritise funds to combat the Covid-19 pandemic. These funds had been used for attending to the water crisis and other issues. The Committee wanted details from the municipality on how it spent that R231 million. How many communities and informal settlements had chemical toilets? How many people had been housed in the informal shelters? How many people did the 50 water tankers serve? The information provided had not helped the Committee to understand how the municipality had addressed the issue of the Covid-19 pandemic. What intervention strategies had been put in place to make sure that those people who had lost their incomes were not going to find themselves in debt? The issue of unemployment was too high in the country, and the Nelson Mandela Bay Municipality was also affected.

There was an issue of building houses that the province and national government faced. How had the municipality addressed the housing issue? What was the municipality doing to include the national government as part of addressing the housing issue? She wished the Acting Mayor and all those in contact with him a speedy recovery from Covid-19. The area was an epicentre of the pandemic in the province. What was the capacity level of local clinics within the municipality? 

Mr C Brink (DA) said that the political questions within the city had not been answered. It seemed that the Municipal Manager, in Nelson Mandela Bay, had been on suspension since 2018. There had also been reference to an Acting Executive Mayor. If the Mayor was not available for any reason, then the position of Acting Mayor would be understandable. However, in the context of the Mayor having been removed in December, there was no such thing in law as an acting Mayor. Either a municipality had a Mayor or it did not have a Mayor. If it did not have a Mayor, it could not have a mayoral committee. Perhaps the Minister could give the Committee her view on the matter. There had been allegations that the acting Municipal Manager did not have the requisite qualifications to hold that position. If that was the case then the Committee should know about it. If it was not the case, then the Committee should also know about it.

He then commented on the financial position of the municipality. On slide 39 of the presentation there was an under collection in this financial year of R672 million. On slide 40, it was projected that the under collection of revenue would amount to R2.6 billion. These were significant amounts of money. In the budget that had been tabled for public comment, the municipality proposed to increase property rates on residences by 8.5%, which was higher than the other larger municipalities. It was also much higher than the consumer price index (CPI) inflation. If a massive revenue shortfall of R2.6 billion was expected in the next financial year, how could they justify a rates increase of 8.5%? Was that the way to replace the revenue shortfall? The leadership in the municipality needed to take the Committee into its confidence about these increases.  

Mr G Hendricks (Al Jama-ah) said the Minister shared his concern about sewage harm in municipalities, and it had been brought to the attention of the Committee that this was also the case in the municipality. He highlighted the history of sewage leaks in the municipality. It was a serious concern, as it released toxins into the environment and affected the immune systems of the people in the municipality. This was alarming, especially in an areas where there was an expectation that there would be a spike in infections. He hoped there would be a way in which the spilling of sewage would be stopped. All the municipality needed to do was build a sewer line, and it had the capacity to do so, but there was no will to help the people living in the poorest areas. The sewage harm that was affecting many municipalities needed to be stopped, especially with the spread of the virus, because people with weak immune systems might die.

Mr B Hadebe (ANC) said that there was a severe water shortage in Nelson Mandela Bay due to the ongoing drought. Water leaks contributed significantly to this problem. Of the reported 15 000 leaks, the metro had managed to fix only 1 112 as of 20 May. He wanted to know what progress had been made. How many leaks had been fixed by 18 June since the introduction of a water saving project last month? On 11 June, it had been reported that there was an elderly Covid-19 patient who had disappeared from the Nelson Mandela Bay stadium, which was an isolation site. Could the Committee receive an update on that situation? What lessons had the municipality learnt from this situation?

Nelson Mandela Bay was faced with two disasters, one being the drought and the second being the pandemic. The municipality had highlighted financial measures to deal with the pandemic, but it had not created any financial plans to deal with the drought. Had the metro approached the National Disaster Management Centre for the municipal drought relief grant? If yes, how much money had the metro requested? Had the request been accepted?

He wanted to get an understanding of how the municipal council was operating. The municipal council had executive authority over the municipality. When last had the council held a meeting to address the vacancy of the Mayor? He wanted a legislative understanding of the mayoral committee, as currently there was only an Acting Mayor. On the last slide, there had been a plea for government departments to prioritise the payment for rates and services. This meant that there were certain departments that owed the municipality money, as they had unpaid rates and services. How much money was owed? Which Departments were not paying the municipality? On the same slide there had been a request to prioritise the transfer of conditional grants for the 2019/20 financial year to the municipality. The financial year end was around the corner. Did this indicate that the metro had not received all of its conditional grants for this financial year? The Department needed to provide answers as to what had caused this delay. He also had a query on the legality and legitimacy of the draft budget. He wanted the Minister to provide an update on the Department’s concern over the municipality’s budget.

Ms M Tlou (ANC) had a question for the Acting Executive Mayor. What were the relevant details for the water leak project that the province had introduced? What was the turnaround time in tending to water leakages? The people who were unemployed believed that they were being side-lined while their areas continued to be the epicentre of the coronavirus in Nelson Mandela Bay. The northern areas had high unemployment and crime rates, and were poverty stricken. What had the municipality done to include the youth in the water leakage project? One way to ensure the smooth running of the municipality was to engage stakeholders and communities. What innovative way was the municipality using to make sure that effective professionalisation was taking place, with good governance support measures?

Ms P Xaba (ANC) said the presentation stated that Covid-19 infections were highest in the poorer areas. What were the major contributing factors to this? What had the city been doing to try and control the spread of Covid-19 in these areas? How much of the R231 million of the new SDG had been prioritised to respond to Covid-19? The revenue collection rate had been lowered to 84% -- what impact would this have on service delivery and municipal programmes?

The Chairperson commended the municipality, saying that the Disaster Management seemed to be directing the Covid-19 response plans. The municipality had also developed an economic recovery plan for the impact of Covid-19. However, it was not clear whether a physical Covid-19 response really existed. She wanted the municipality to share details on whether it was actually funded. She was concerned that the municipality was one of the poorest spenders of Disaster Management grants due to internal business processes. The municipality always pushed themselves to be declared a disaster area. The municipality’s problems were more about governance and drought risk management. The municipality had been given R233 million for drought relief, but the spending had been a challenge. The Chairperson asked the municipality to take the Committee into their confidence as to why they were in such a state of affairs.

Municipality’s response

Mr Buyeye said that some of the questions asked by the Committee would require the municipality to forward the information, as they did not currently have the information available. They did have the information on where the water tanks and chemical toilets were distributed, but it was not currently in front of them. They would provide that information to the Committee.

He addressed the concerns over the issue of the municipality not having a permanent Mayor. The municipality had not had an elected Executive Mayor since the removal of the then Mayor on 5 December last year. It did have an elected Deputy Executive Mayor, and this was why Mr Buyeye was the Acting Mayor. Section 56.6 of the Municipal Structures Act gave the Deputy Mayor authority to exercise all the powers and functions of the Executive Mayor if the Mayor was absent, or if the position was vacant, as was the case in the Nelson Mandela Bay Metro. The position of the Executive Mayor was vacant, but they did have an elected deputy Executive Mayor who was performing the functions of the Mayor in terms of the powers granted by the Act. From a legal aspect there was no issue. Ms Mkhaliphi was correct in saying that it might affect the effective governance and running of the office. The city had listened to the calls for it to deal with the matter. The governing coalition in the city was in agreement to finalise the issue of the Mayor before the end of June. It was a matter that the council was taking seriously, and it would be resolved within the coming weeks. The city would elect a new Mayor and the issue would be resolved.

Mr Andile Lungisa, MMC: Infrastructure, Engineering, Electricity and Energy, NMBM, agreed with the point made by the Acting Mayor with regard to the legality of his position. Chapter 4 of the Municipal Structures Act was very clear in allowing the deputy Executive Mayor to exercise the powers and to perform the duties of the Executive Mayor if the Executive Mayor was absent or not available. The Act also stated that if the Executive Mayor and the deputy Executive Mayor were either absent or unavailable, that the council must elect a council member to be an Acting Mayor. The letter one council member wrote to the Minister was incorrect. Even in Cape Town, when Minister De Lille was fired, a Deputy Executive Mayor assumed all the responsibilities of the Executive Mayor. He said the Nelson Mandela Bay Municipality was in order with regard to the legality of the Acting Mayor. They had made a political consideration that an Executive Mayor must be elected.

He then went on to the issues of the water shortage and Covid-19 pandemic, and first discussed the drought. Nelson Mandela Bay was one of the few municipalities where 187 standpipes had been constructed in all the informal settlements. The municipality was adding to the standpipes in those areas to makes sure communities could access water within a 100 metre radius. He detailed how many standpipes there were in each of the wards. There was no ward within the Nelson Mandela Bay Metro where the municipality had not installed standpipes.

The municipality had received a donation of JOJO tanks from the Department of Human Settlements. The tanks had not been deployed in all the informal settlements, only in areas where the municipality was supposed to install a standpipe. In other areas there were standpipes and there was no need to deploy JOJO tanks. The metro currently had more than 125 settlements, and all had been covered under the Covid-19 regulations.

The municipality was currently employing seven companies and in-sourcing and training workers to address the issue of water leaks. The municipality had also trained young people to be included in the ‘war on leaks’ project. Young people were reporting water leaks within their areas to make sure that within 24 hours a water leak was responded to.

The metro was confronted by Covid-19 and by the water drought. The municipality had written letters to the MEC of the province and to the Minister of Human Settlements requesting intervention on the drought. Those letters had also addressed the issue of housing in the metro, which had been a challenge since 2015. The national government had intervened and signed an agreement between the national, provincial and local governments. The Housing Development Agency (HDA) had also been included as an implementation agent. That agreement had come to an end last year before the national government elections. Since the agreement was signed, only close to 1 000 houses had been built. There needed to be a unified approach to resolving the housing issue. The local government needed to be given the function back to build houses. The local, provincial and national leadership needed to consult to create a solution to the housing issue in the metro. The municipality needed to play a larger role.

He then moved on to the issue of the acting city manager. The municipality had a responsibility to follow all pieces of legislation. On 5 December, when the Mayor was removed, that meeting had appointed a municipal manager. The first three months of the municipal manager had lapsed in March. They had then requested the MEC to give the city an extension so the acting municipal manager could act for another three months. The term of office had ended on 28 May. Under the same law, the city could not extend the term of the municipal manager longer than six months. That was why the municipality had appointed the current city manager. The current acting city manager had met the requirements for senior managers in the municipality. The municipality had a responsibility to not violate the law. When they selected a person for a position, they must be able to meet the regulations and requirements. The current city manager met those requirements.

He addressed the concerns of Covid-19, and said that the municipality had moved beyond its own mandate. There was a field hospital at the stadium, and that field hospital had been handed over to the Department of Health. The municipality was providing all the logistics to make sure that the people in the area got service. Informal settlements had been assisted with sanitisers, masks and soap to make sure that they washed their hands on a daily basis.

Mr Mkhuseli Mtsila, MMC: Budget and Treasury, NMBM, commented on the issue of the housing function. The municipality had been engaging the provincial government on returning the housing function back to the municipality, but It seemed as if the provincial government had a problem with returning it. He suggested that maybe the Committee could intervene on the municipality’s behalf to address the issue.

He referred to the issues and concerns relating to the budget and finances of the municipality, and answered the questions related to the tariff increase. He said the fiscal framework of local government was regulated by many bodies. There was the South African Local Government Bargaining Council which regulated the salary increases of municipal workers in different municipalities. There was also the Department of Water Affairs, which regulated how much the tariffs should be. The tariffs were therefore not within the total control of the municipality. How they increased and decreased was controlled by other bodies.

Before the budget was passed it had to be credible and it had to be funded. The municipality should have cash back, and in that instance they had R3.1 billion. Cost reflective tariffs meant that the municipality had already made commitments to its people with regard to service delivery in the metro. The input costs of water and electricity bulk purchases had been increasing. Municipal workers were depending on the property tariffs to be paid. There were projects within the municipality that were funded by the property rates. The metro had also in-sourced over 682 security workers that were previously outsourced. The tariffs had been increased to keep up with the inputs that were paid for. The municipality had to fund its commitments, pay their workers and make sure they maintained their infrastructure, so property rates did fund those projects. Tariff increases were cost reflective, as the benchmark of National Treasury required them to be. The draft budget would pass the test of credibility and the fact that it was funded.

He then moved on to the issue of under collection of revenue. Under the Municipal Finance Management Act (MFMA), the revenue targets must be realistic and achievable. Due to Covid-19, the municipality had under collected, down from 94% to 84%. Overall they had lost almost R840 million in revenue collection, so for the 2020/21 financial year they had decided to come up with new targets that would be achievable and realistic so that they did not have a shortfall in revenue collection. They had set their revenue target at 88% for this financial year. If things improved, they may change those targets.

The under collection had affected their spending. They had a revenue shortfall, and therefore needed to make changes. They were going to take grants from an entity for the next financial year. They were cutting expenditure on transportation costs, because the Covid-19 pandemic had decreased the amount of travelling, as they now had virtual meetings. They had also decreased the amount of international travel that they did. They were going to spend only where they saw that their money would give a return in value.

To cushion those people who had lost their jobs due to Covid-19, the council had come up with an idea of payment relief. Whatever intervention they made should be within the framework of their policies. The municipality was extending the period which it took for people to pay back money that they owed during lockdown. Interest would also not be charged to all the people in the municipality. They have done that for businesses and public benefit organisations. They had a policy which affected over 9 000 beneficiaries, that if the household income was below R3 400, they did not have to pay for their electricity or their water. The municipality would subsidise the costs for those households. If businesses were losing money, they could also apply for funding up until such a time that their financial situation improved. The payment period for businesses could also be extended. These measures had been put in place to provide relief to those individuals and businesses which had suffered due to the Covid-19 pandemic and had lost their jobs.

Mr Selwyn Thys, Chief Financial Officer (CFO), NMBM, referred to the outstanding debt that was owed by the different government departments. The amount outstanding at the end May was R189 million. He highlighted the departments that had the biggest outstanding amounts. The provincial Department of Health owed the municipality R32.7 million. The provincial Department of Human Settlements owed R12.4 million. The provincial Department of Public Works owed R7.4 million, and the provincial Department of Sanitation R38 million. He added that the national Department of Public Works owed the municipality a large amount of money due to rates and service charges.

In view of the current collection trends, the municipality had been forced to revisit the expenditure side of the budget to make sure it was aligned to the available financial resources. They had made a significant sacrifice in the wage bill of the municipality. It was an important component of containing expenditure within the budget. The amount for filling critical vacancies would be prioritised in terms of service delivery areas. National Treasury had scheduled a national benchmark session on 22 June. The purpose of that session would be to evaluate the credibility of the municipality’s budget and whether the budget was cash backed and funded. The purpose of that session was to make sure that the budget was underpinned by adequate financial resources and that as an institution, they would be able to implement that budget. That session would influence the tabling of the final draft budget to council before the end of June to make sure they complied with the appropriate legislative requirements.

He responded to the questions on outstanding grants. When the council adopted the adjusted budget at the end of February, National Treasury had forwarded correspondence to the municipality at the time in terms of complying with a number of conditions, to get the last parts of the equitable share. The amount owing was R255.4 million. The urban settlements development grant was R390.3 million. The public transport network operational grant was R98.2 million, and the neighbourhood development grant was R10 million. The combined sum of those outstanding grants was an amount of R753.8 million.

As an institution, the municipality needed that money. National Treasury had sent correspondence to the municipality setting out a number of conditions that needed to be met before those grants were released. Those conditions centred on critical areas. The one area was the stabilisation of the senior management team. One of the conditions was appointing a CFO. Filling senior management vacancies was also a condition. About five vacancies had been filled at the council meeting in December. The other condition was the report on progress with the forensic investigation on the Integrated Public Transport System (IPTS) programme. The municipality had forwarded a progress report to National Treasury in the past week.

Another condition involved the decisions taken by council previously, which had significant financial implications -- for example, the in-sourcing of security guards. At the time when the council took that particular decision, the full financial implications of the decision were not in front of the council. National Treasury had said that the council needed to regularise those decisions which came as motions of exigency. The council had accepted all of those conditions and the adjustment budget was passed at the end of February, and that had all been reported back to National Treasury. The officials in National Treasury had made a submission to the Minister of Finance to sign off the release of the grants to the municipality.

The municipality was of the view that they had complied with the conditions stipulated by National Treasury. The importance of getting that money into the municipal bank account before June was critical, because there were service delivery programmes linked to those grant funding streams. If that funding was not secured, the municipality would have to make further serious cuts, realignments and reductions to their service delivery programme. That would have an impact both on the finances of the municipality and its ability to deliver services to the residents.

Regarding unforeseen and unavoidable expenditure, at the time the municipality had adopted the adjustment budget at the end of February, no municipality would have anticipated Covid-19 and would not have budgeted for Covid-related expenditure. In discussions and engagements, the metropolitan municipalities had approached National Treasury to allow for flexibility in terms of reprioritising part of the USDG as a financial package to support the Covid response plans of the municipalities. The municipalities had to look at some of the projects that could be delayed, to redirect that funding to support the municipality’s response plan for Covid-19. That was the amount of R231 million to which Mr Brown had referred to earlier.

That amount had been cut across from a number of different activities. The one amount was R96.7 million, which was for the provision of temporary housing structures to de-densify human populated settlements as an initiative to combat the spread of the virus. The other reason was for the provision of chemical toilets, which cost R26.5 million. Another large amount was for water standpipes and toilets, that came to R25 million. Personal protective clothing cost R20 million. The installation of water tanks cost R35 million. An amount of R15 million had been spent on the sanitisation of informal areas, public spaces and municipal facilities. National Treasury had also asked the municipality to pass a special adjustments budget with the redirection of the USDG to respond to the Covid response plan, bringing in that revenue as well as the expenditure. That special adjustment budget, which would help deal with the Covid -19 response plan, would be tabled when the council met again this month.

When the council tabled the first adjustment budget at the end of February, the municipality was anticipating a cash position at the end of this month of about R3 billion. In terms of the special adjustments budget that would be tabled soon, it was predicting that the cash position would be about R2.6 billion. That was the impact that the Covid-19 pandemic had had on the budget of the municipality. Other expenditure components in the budget, like personal costs and contracted services, were revisited and further reductions had been made. In that way, they had been able to cushion the reduction in the collection rate. The cash position had come down by R400 million due to the pandemic.

He responded to the question on the impact of the Covid-19 collection rate on service delivery. The proposed budget for the new financial year was R1.6 billion, dropping to R1.3 billion in the next two financial years. That was linked to a sharp decline in the USDG in year two and three in the three-year budget programme of the municipality. He commented on Mr Brink’s question on the projected under collection of revenue for 2020/21, and said it would amount to R1.2 billion for the upcoming financial year.

The Chairperson asked for responses to the question of when last the council held a meeting, and also to the question raised by Mr Brink on the municipal manager. The municipality had been almost two years without a municipal manager. What was the status of the case? The municipality was supposed to deal with these matters as expeditiously as possible. The municipality had been paying acting municipal managers, and at what cost?

Ms Buyelwa Mafaya, Nelson Mandela Bay Council Speaker, responded to the question of when the last council meeting that was quorate had been held. The council had its first meeting since the start of Covid-19 on 5 June, which was not quorate. The second attempt was on 15 June, and it was a success because that meeting had a quorum of 61 councillors out of a total of 120. Therefore, the last council meeting that had a quorum was on 15 June.

Mr Lungisa responded to the concern over the suspended municipal manager. The report had been completed and had been tabled in the council meeting in February. The sitting government had then been defeated. It was going to be tabled again at the next council meeting, where a settlement between the two parties was going to be tabled. The matter would then be closed.

Mr Buyeye hoped that the issue of the municipal manager would be finalised at the next council meeting. Both legal teams were in agreement -- it was just up to the council to be in agreement on the proposed way forward on the matter.

The R231 million was meant for the drought intervention. There had been delays in the spending of the money, as there had been complaints and objections to the awarded contractor. That had taken some time to be settled. The matter had since been resolved, and currently the contractor was on site. The entire money had been committed to the project and would be spent. The municipality was known as poor spender, but actually they were receiving praise for their good spending recently.

He responded to the issue of protests occurring in a certain informal settlement. Every Wednesday they had the metro command council, where they met and discussed issues. This matter had been raised at that meeting. It was agreed that there needed to be a committee that was headed by the Executive Mayor, together with a Member of Parliament -- preferably a coordinator of the MPs who was a resident in the city – as well as a senior member of the Department of Health and someone from the business community, to help address the issues facing the Health Department.

There was also an issue of a patient being lost at the stadium hospital. He confirmed that that was true. The stadium had been handed over to the Department of Health. It had been placed under the authority of the Department for isolating and quarantining people. The municipality had asked the Department what had happened, and the person had still not been found. The police had been made aware of the case. To make sure that it did not occur again, the municipality had stated that no patient may leave the facility without a discharge letter. The patient must be accompanied by a health official to the security to be discharged.

The municipality was not sure what Mr Hendricks was talking about, and wanted more details on the matter of sewage leaks in the area to respond properly to his question.

The Chairperson said the details would be forwarded from the Committee, and the municipality would be able to respond in writing.

Mr Ceza said he welcomed the in-sourcing of security guards. He did not understand how the provision of PPEs was actually done. The municipality had not provided the exact details. The driving forces behind the spread of Covid-19 in the area were the retail sector and funerals. There did not seem to be an approach to prevent the increase in the number of cases. These issues required the municipality to go back and bring those details forward. He wanted clarity on the inadequate health procurement processes of the PPEs.

Mr Hadebe said he welcomed the explanation of the Municipal Structures Act. He wanted clarity on the whether the current MAYCO member had been appointed by the Mayor.

Mr Brink said he was concerned by the answer to the question of property rates, because it seemed to show a business as usual approach, while in fact municipalities had to take into account the effect that the lockdown had had on their own finances and the finances of residents. To say that the tariffs were going to be cost effective was not so simple anymore. Cost reflective meant that there was also a responsibility on the municipality to also make adjustments internally. How did they expect to raise rates when there was a decrease in collections? It did not make sense. He liked the answer given by the Deputy Mayor in relation to the position of Acting Executive Mayor. Hopefully by the next time the city presented to the Committee, they would have elected a permanent Mayor.

Mr Buyeye said that he had the authority to appoint the MAYCO. When the old Mayor was removed from office, he had taken his MAYCO with him. Therefore, a new MAYCO had been appointed by the new acting Mayor.

Mr Lungisa responded to the concerns raised by Mr Ceza on PPEs. All the informal settlements had been provided with PPEs, and the area of Motherwell was even locked down. The leadership was making sure that all of the city’s people were attended to.

Dr Mmaphaka Tau, Head of the National Disaster Management Centre, commented on the matters relating to drought management within the Nelson Mandela Bay Municipality. He said dealing with drought should be approached as a developmental issue. It needed to be an integrated approach. The integrated approach was also known as the drought risk nexus. The drought risk nexus required one to look at drought through three aspects. The first was the engineering solutions in dealing with the drought. This was related to how infrastructure could ensure the preservation of limited water and the prevention of leakages. The second aspect was the ecological considerations. This meant ensuring that wetlands were well-maintained in order to continue releasing sufficient water for the needs of the community and farming sector. The third aspect was water demand management. This was critical -- as population increased, the demand for water increased. The demand and supply aspects of a finite resource needed to be balanced. Every municipality needed to have clear plans to bring together these three aspects. It was for this reason that they encouraged municipalities to have integrated drought management plans. The plans needed to be based on the reality of the situation. Water services needed to be managed, to manage this scarce resource.

There was an amount of R233 million that had been allocated to the municipality. The legal challenges that the metro faced, which affected drought response projects, had been resolved. There was also the problem of the link between governance challenges and disaster risk measures. Decisions to approve drought funds to particular votes had been delayed because of administrative and governance challenges. Drought management also required stable governance structures within a municipality, which required quick decision making so that projects could be implemented with ease. He wanted to know from the municipality by when the funds that would have been allocated for drought relief had been spent. He encouraged the municipality to engage with the relevant sector department whenever there was a view to declare a municipal state of disaster before any decision could be taken to declare a state of disaster. Any drought first needed to be classified and evaluated by the NDMC.

Mr Themba Fosi, Director General: Department of Cooperative Governance, responded to the concern raised by the CFO. The Department would follow up on the delays of the grants when it had its meeting with National Treasury. It would look at how the metro had reprioritised its budget to respond to the Covid-19 priorities. Treasury had allowed the metros to use the USDG to respond to the emergency challenges in responding to the pandemic. The Department was working closely with the provincial Cogta Department, and had asked for a report on the state of the municipality with regard to the governance issues it was struggling with.

Minister Nkosanzana Dlamini-Zuma said she had asked Deputy Minister Parks Tau to work with the province, because it was firstly the province that must act. Covid-19 required an agile council that was able to act quickly. It would be good if the municipality could hold council meetings that had a quorum to make sure the outstanding issues, like electing a Mayor, were addressed. She reminded the metro that there had been a decision that while there was a lockdown, the procurement done by the municipal leadership needed to be accounted for. She encouraged the metro to resolve all outstanding issues so that there was no threat of Treasury withholding the budget.

The municipality needed to do a lot of work to stop the spread of Covid-19 in the metro, but she was happy that they were working with the Department of Health and other departments. The Executive would be showing constant support in each district, as delegations of Ministers and Deputy Ministers would be sent out.

The Chairperson once again highlighted the fact that the municipality was the Covid-19 hotspot in the province. It was critical to deal with the plan itself. The municipality needed to share the plan with the Committee so that they could monitor their progress. The Committee appreciated the work done by the municipality in fighting the pandemic. It also appreciated the work done by the national and provincial Departments in supporting the municipality. It hoped that the council would meet and form a quorum so that the leadership and political issues within the metro could be finally resolved.

The meeting was adjourned.