ATC151027: Report of the Select Committee on Cooperative Governance and Traditional Affairs on Termination of Intervention Issued in terms of Section 139(1)(B) of the Constitution (1996) in Umvoti Local Municipality, dated 27 October 2015

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

REPORT OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON TERMINATION OF INTERVENTION ISSUED IN TERMS OF SECTION 139(1)(b) OF THE CONSTITUTION (1996) IN UMVOTI LOCAL MUNICIPALITY, DATED 27 OCTOBER 2015 

 

1. Background

 

1.1     On 03 August 2015, the MEC for Cooperative Governance and Traditional Affairs in KwaZulu-Natal tabled to the Office of the Chairperson of the National Council of Provinces (NCOP) a notice of the termination of intervention in terms of section 139(1)(b) of the Constitution at Umvoti Local Municipality.

 

1.2     As a result of the tabling, the notice of intervention was referred in terms of Rule 101 to the Select Committee on Cooperative Governance and Traditional Affairs, for consideration and report.

 

1.3     On 21 October 2015, during the loco inspection on the notice of intervention in terms of section 139(1)(b) of the Constitution at Indaka Local Municipality, the Select Committee also called the Department of Cooperative Governance and Traditional Affairs to brief its Members on the termination of intervention in terms of section 139(1)(b) of the Constitution at Umvoti Local Municipality.                 

 

1.    Objectives of the Briefing Session

 

2.1     The objectives of the session was to accord the Department of Cooperative Governance and Traditional Affairs an opportunity to brief the delegation of the Select Committee on the progress made in implementing the constitutional, procedural and substantive matters related to the intervention in the Municipality in terms of section 139(1)(b) of the Constitution, and the Provincial Executive Council’s (PECs) decision to terminate the intervention in Umvoti Local Municipality.     

 

1. Presentation on Termination Intervention in Umvoti Local Municipality

 

3.1     During 21 October 2015, the Department of Cooperative Governance and Traditional Affairs briefed the Select Committee on the termination of intervention issued in terms of section 139(1)(b) of the Constitution in Umvoti Local Municipality. The presentation focused on the overview of background and reasons for the intervention; success indicators in the period up to February 2015; extension and emerging challenges; current status and way-forward.            

 

1. Overview of Background and Reasons for the Intervention 

 

4.1     Umvoti Local Municipality is one of four municipalities in the Umzinyathi District family of municipalities. The Municipality has 22 council members of which the ANC has 10, the IFP (9), the NFP (2) and the DA (1) member. The Municipality has a population of 114,509 (2011), with 54,533 registered voters (2014) and 11 wards. The Municipality has a budget of close to R320 million, of which over R105 million is set aside for capital expenditure (2015/16).

 

4.2     The initial resolution of the PEC to intervene at Umvoti Local Municipality was taken on 17 July 2013, following the emergence of destabilizing problems within the municipal council, whose history can be traced as far back as November 2012. The common problems that faced the Municipality included the following:

 

• Continuous struggle and instability in governance stemming from political differences of the elected councillors, which had also permeated to employees who were highly politicized.

 

• Alleged unlawful election of office bearers as well as unlawful removal of the Speaker and election of the new Speaker, which were the subject of court litigation at the time.

 

• Various council meetings at which critical matters were to be tabled, including the passing of the budget, were disrupted and left inquorate as a result of walkouts.
• The state of dysfunctionality had forced that certain drastic measures be taken such as the presence of the member of the SAPS at council meetings and the request by the Municipal Manager to close municipal offices until 18 July 2013.

 

 

5.     Success Indicators in the Period up to February 2015

 

5.1     From the progress reports received on the intervention in the Umvoti Local Municipality, significant progress and developments were made in the Municipality since the invocation of the intervention. The following is the summary of these developments:

 

• The political instability that had characterized the municipal council at the beginning of the intervention had finally been resolved, when the parties in council accepted and concluded a settlement agreement proposed by CoGTA. The agreement was concluded in February 2015, paving the way for the withdrawal of court matters and the election of office bearers.

 

• The Municipality’s organogram was reviewed and approved by the municipal council, resulting in the decrease of departments from eight to five and in the realignment of powers and functions.

 

• Verification of staff in the employ of the municipality was performed.

 

• Systems, policies and procedures were implemented to unearth service delivery projects that could have been overlooked due to the political instability.

 

• The withdrawal of the electrification grant was renegotiated with the Department of Energy and a commitment of R64 million over two financial years was agreed to. However only R12 million was gazetted for the 2014/15 and R25 million for the 2015/16 financial year.

 

• The Provincial Department of Human Settlements assisted the Municipality with the finalization of Housing Planning Processes, including the preparation of the Housing Development Plan.

 

• The Municipality was given an additional R5 million MIG allocation for 2014/15 financial year. Despite this, the Municipality was among the municipalities that spent 100% of their MIG allocations, as at 30 June 2015.

 

• Further improvements in the supply chain management processes was still on course, with the database of suppliers being reviewed, and Bid Committee Members reviewed quarterly.
• With the assistance of the provincial CoGTA, an LED strategy had been developed and adopted by Council.

 

6.     Extension of Intervention and Emerging Challenges

 

6.1     The PEC resolved on 25 February 2015 to extend the intervention at Umvoti Local Municipality by a further three months due to the fact that, while the priorities and targets as contained in the recovery plan, had to a large extent been met, there were outstanding issues. These included:

 

• The sitting of the Local Labour Forum was still a challenge, and SALGA in KwaZulu-Natal had agreed to review all disciplinary cases in the Municipality.

 

• The Municipality had approved its 2014/15 budget, but it was in a deficit of R21 million. Provincial Treasury assisted the Municipality resolve this challenge.

 

• The fact that the recommendations of a section 106 investigation conducted by CoGTA which implicated senior managers were yet to be implemented. The implementation thereof could result in serious misconduct charges being preferred against some of the senior management team.

 

• The fact that the Auditor General gave the Municipality a disclaimer audit opinion in respect of performance management for the period ending 30 June 2014.

 

• The fact that three senior management positions (Director: Corporate, Director: Community, and Director: Technical) remained vacant and were in the process of being filled, could compound management challenges in the Municipality if the intervention was terminated before these positions were filled.

 

7.     Current Status and Way-Forward

 

7.1     On 25 June 2015, the PEC resolved to terminate the intervention at Umvoti Local Municipality after having considered a report to the effect that most of the key indicators in the Exit Plan had been achieved. These indicators included:

 

• The new Mayor had successfully tabled the IDP and the Annual Budget 2015/16 before the Municipal Council, and that these were approved before the start of the financial year.

 

• The municipal council had adopted the Oversight Report together with the annual report on time, having complied with the formalities attached thereto.

 

• Even though the Municipality had not completed the disciplinary processes against the senior managers implicated in the section 106 investigation report, the processes had commenced and would outlive the intervention.

 

• In the report submitted to the Executive Council, the Municipality had undertaken to complete the process of appointing the senior managers of Corporate Services, Community and Technical Services by the end of June 2015.

 

• The report submitted to the Executive Council showed that the Municipality had expended 64% of its 2014/15 MIG funding as at end of March 2015. It is confirmed that the Municipality was among the 49 municipalities in kwaZulu-Natal that were certified as having expended 90-100% of their 2014/15 MIG allocations, as at 30 June 2015.

 

8.       Select Committee Observations

 

8.1     The Select Committee has observed and noted that the intervention was terminated on 30 June 2015 in terms of the Provincial Executive Council resolution dated 25 June 2015. Based on the Back to Basics assessment results to date, the Municipality is indeed one of those that will be recommended for graduation from those requiring intervention to either the challenged or functional municipalities.

 

9.      Recommendations 

 

9.1     Having been briefed on the termination of intervention in terms of section 139(1)(b) of the Constitution, the Select Committee recommends to the NCOP as follows: 

 

9.1.1     The NCOP approves the termination of the intervention in Umvoti Local Municipality in terms of section 139(1)(b) of the Constitution.

 

9.1.2  The Department of Cooperative Governance and Traditional Affairs in KwaZulu-Natal should table the outstanding forensic investigation reports in terms of section 106 of the Local Government: Municipal System Act (Act No.32 of 2000) to the NCOP and the KwaZulu–Natal Provincial legislature.   

 

Report to be considered.