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BRIEFING TO THE SELECT BRIEFING TO THE SELECT COMMITTEECOMMITTEE

MUNICIPAL SYSTEMS AMENDMENT MUNICIPAL SYSTEMS AMENDMENT BILLBILL

22 SEPTEMBER 200322 SEPTEMBER 2003

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OVERVIEW OF THE AMENDMENTSChange definitions

New provisions regarding assignment of function and powers to municipalities

Improved access to informationSubmission of annual performance reports

by municipalitiesExternal mechanisms for service deliveryLimiting municipal entities and

establishing governing arrangements

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AMENDED SECTIONS

ΩTable of Contents (exclusions and additions)

ΩAssignment of functions and powers to municipalities by Acts of Parliament or Provincial Acts (sec 9)

ΩAssignment of functions and powers to specific municipalities by acts of executive or by agreements (sec10)

ΩFunding and capacity building (sec 10A)ΩPublic access to information (sec 21A)Ω official website (sec 21B)

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EXTERNAL MECHANISMS

Ω External MechanismΩ New chapter 8A Municipal Entities

Part 1 General provisions (kinds of entities) Part2 Private companies Part 3 Service utilities Part 4 Multi-jurisdictional service utilities Part 5 Duties and responsibilities of parent

municipalities Part 6 Governance of municipal entities Part 7 General New clause Transitional provisions

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ASSIGNMENT FRAMEWORK (SEC 9)

Ω Assignment of functions and powers by act of parliament or provincial Act

Process (within reasonable period request draft Act providing for the assignment)(i) Assessment by FFC of financial & fiscal

implications of the legislation (ii)Future division of revenue between the spheres(iii)Fiscal power, capacity and efficiency of

municipalities Consult the Min, Min of Finance and

SALGA (MEC for local govt.) Outline implications of assignment for the

municipality(ies)

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ASSIGNMENT FRAMEWORK (SEC 10)

Ω Assignment of function or power to the municipality by acts of executive or by agreement (i.t.o S99 or 126 of constitution)Before signing

Memo to Min and NT3yr proj of financial implicationsDisclosure of any possible fin liabilities or risks

after 3yrsFunding of additional expenditure

ᾨFunding and capacity building The Cabinet members, MEC or organ of state

assigning F or P should ensure sufficient funding and capacity for the municipality to ensure sustainability

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ACCESS TO INFORMATION SECT 21A

Ω Documents to be made publicDisplay at all municipal and satellite officesDisplay on the WebsiteNotify community of the place and addressRequest written comments from communities

ᾨ Official websiteEstablish Website if affordable if not place

on the organized local govt. website sponsored by NT

MM to maintain and regularly update website

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ANNUAL PERFORMANCE REPORTS( SEC 46)

ὬAnnual performance reportsEach financial year municipalities to

prepare an annual performance report outliningPerformance of municipality and

external service providersCompare performances of the internal

and external mechanismsAnnual performance report to be part of

Annual reportMeasures taken to improve performance

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PERFORMANCE AGREEMENT SEC 57

ΩMFMA –responsibilities on accounting officer of the Municipality to be part of the Performance agreement

Ω Bonuses awarded to MM and managers directly accountable to him after the end of financial year after evaluation of performance by the council

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EXTERNAL MECHANISMS (SEC 78)

Ω use of external mechanisms (SDA & Governance)

Feasibility studyConsultation (Community, organized labour) Identification of serviceTimeframesOutputsValue for moneyNeeds of the poor Impact Capacity of municipality to monitorΩ National and provinces to assist

municipalities !

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SERVICE DELIVERY AGREEMENTS SECT 80

Ω Provision of services through SDA with external mechanisms including, another municipality national and provincial organs of state

Commission and take into account the recommendations of the feasibility study

Community consultative process Exemptions from part 3 (competitive bidding) Any person or entity juristic or otherwise, not

mentioned above will be subjected to part three of the Act

Provide dispute settlement mechanism

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MUNICIPAL ENTITIES

Ω Three kinds are permittedPrivate companyService utilityMulti-jurisdictional service utility

Ω Interest ownershipMay hold interest only in the above orInvestments in the stock exchange as

per MFMA

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PRIVATE COMPANIES

Ω Establishment and share ownershipEnhance service deliveryAddress the needs of communityProvide sound business practice

Ω Joint ownershipDecide on share ownershipFunding arrangements (3yr cash flow

projection)Ω Disposal

Dissolve in terms of companies Act

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SERVICE UTILITY

Ω Created by a by-lawΩ ConditionsRestricted to providing service for which

it was created Est. of a boardAppointment, recall of directorsProcedure for the boardacquisition of goods and servicesApp of staffGovernance arrangements

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MULTI-JURISDICTIONAL

Ω Est. by a by-lawΩ Conditions

Restrict its activities to the purpose for which it is established

Governance arrangementsReporting implementation arrangementsAmendment of agreementRequest for info by any parent municipalityPerformance management

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PERFORMANCE OF ENTITIES

In respect of municipal entity is measured against agreed objectives

Ω Municipalities exercise the rights and powers

Ω Monitoring and annual review( annual budget)

Ω Procedures for dispute resolution consequences for withdrawal from entity

Ω Procedures for termination of entityΩ disestablishment based on performance

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DISESTABLISHMENT

ΩFollows annual performance review and unsatisfactory performance

ΩSerious financial problems (lack of financial recovery plan)

ΩTermination of SDA

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REPRESENTATION IN ENTITIES

Ω Councilor or official or both (acts on instructions of council)

Ω Non-participating observer in the boardΩ Attends shareholding meetings and

exercise the shareowners right to voteΩ Official communication to council

responsibility of the boardΩ Council of parent municipality determines

reporting responsibilities

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EXCLUSIONS FROM THE BOARD

ΩCouncilor of any municipalityΩMember of National Assembly or

Provincial LegislatureΩPermanent delegate of the NCOPΩOfficial of any parent municipalityΩConvicted of any offenceΩDeclared by courts to be of unsound

mindΩUn-rehabilitated insolvent

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CODE OF CONDUCT

ΩContained in schedule 1ΩBreaches of code

Board est. a special committee to investigate breaches by directors

Make recommendations to the boardFormal disciplinary procedures followedBoard informs parent municipality of

disciplinary action taken

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CODE OF CONDUCT (cont.)

Ω Code of conduct for municipal staff in schedule 2 also applies to staff of the entity

Ω Breach of this code is ground for dismissalΩ Disciplinary action

SuspensionAppropriate fineDemotionTransferReduction in salary

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TRANSITIONAL PROVISION

ΩRetain the status quo and align to the new Act

ΩProvides conversion framework to new entities

ΩFor the purpose of this Act these will be considered municipal entities

ΩMunicipalities are required to publish a list of all entities in a provincial gazette

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CONCLUSION

Amendments provides more certainty and predictability

Tighten the provisions in the MSA while allowing flexibility

Ensure transparency Promote efficiency in service deliveryWill ensure capacity of municipalities

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THANK YOU