Municipal Systems Amendment Bill [B2-2019]: stakeholder engagement Day 1

Meeting report

Mr Dikgang Moiloa, MEC Cooperative Governance and Traditional Affairs (COGTA) Gauteng, said that the COGTA National Department met with them about the process to comply with the Constitutional Court judgement on the Municipal Systems Act Amendment Bill. They had had a long debate on the application of Section 139 and the placing of a municipality under administration, like for example in the Ekurhuleni matter, where Section 139 (1)(a) and Section 139 (1)(b) but not Section 139 (1)(c) was invoked. COGTA Gauteng felt that as it was only invoked under Section 139(a) and (b) but not (c), it should not be under an Administrator but under a ‘mechanism of intervention”. MINMEC had subsequently met and adopted guidelines on how Section 139 should be implemented via a ‘mechanism of intervention” and not via an Administrator because provision for an Administrator was found in (c) for cases when municipalities were dissolved.

He said that while respecting the Constitutional Court ruling on amending the Municipal Systems Act
(MSA) legislation, it would be prudent to look at the entire act and amend it as necessary. He gave as example, Section 56 which was the subject of Gauteng COGTA’s input. He said that if management was sick, the law said that council should make appointments, but council only met every three months, so there needed to be an amendment because as the proposal stood, there would be paralysis in the work of the municipality.

On the issue of getting the concurrence of the Minister regarding the appointment of employees under Section 56, he said it would take four to five months to get the concurrence of the Minister on the decision of municipalities on appointments and this was too long and would create a high degree of uncertainty and instability in municipalities.

He said that there were ambiguities in the legislation that need to be cleared up like for example the case of what happens once the MEC is made aware of maladministration or corruption. Other cases were that of who was responsible in cases where municipalities were helped to recover from financial stress. There was a Memorandum of Agreement between COGTA and the National Treasury where Provincial Treasury and National Treasury solely concerned themselves with finances, and COGTA would only become aware of financial distress much later, almost a year later than Treasury. If that was the case then it should be reflected in the legislation.  Treasury should take responsibility to oversee municipalities’ financial management. A case in point was municipalities’ involvement with mutual banks like VBS. The question was where Treasury was as it must have known about the involvement because municipalities reported to Treasury on a monthly basis. Treasury would have known that municipalities were investing in mutual banks through their own internal regulation of municipalities’ finances. Treasury should have restricted municipalities from investing in mutual banks like VBS.   

Municipalities declared themselves in a serious financial situation to COGTA, but Treasury provided the financial management services. Who took responsibility when municipalities got into serious financial situations and COGTA only became aware when the situation was already in dire straits. So, there was a need to look at the Bill comprehensively to ensure that ambiguities were removed.

Mr Hamilton Moroape, Gauteng Province Chief Director: Municipal Service Delivery Monitoring and Evaluation, proposed the following additional amendments to the Municipal Systems Act Amendment Bill:

• Under Section 54(A) of the Bill, under 2(A):
• Insert 2(A)(c) which states that in case the position is vacant after the MEC has approved the extension of the acting period, the municipality must apply to the Minister via the MEC; 
• Insert 2(B) which addresses the acting Municipal Manager in circumstances of incapacity, disciplinary process, litigation and other circumstances other than a vacant post. In  such circumstances a person can act for 3 months by approval of Council. Thereafter the municipality must apply to the MEC for an extension of the acting period not exceeding 3 months. If the matter is not resolved after the extension by the MEC, the municipality must apply to the Minister with the recommendation of the MEC for the Minister to make a determination;
• Insert (5)(b) which reads that “should a municipal council not find a suitable candidate even after they have re-advertised the post, the council must select from the pool of candidates that have applied from both advertising processes and apply to the Minister to waive any of the requirements in terms of skills, expertise, qualifications or competencies, as it would have not been able to find a suitable candidate”;
• Insert 7(c) which reads that “The MEC must within 30 days of receipt of all the required information assess the appointment in terms of compliance with the Act and applicable regulations and communicate such outcome to the municipality”;
• Remove ‘14 days’ from Clause (8) and insert a clause that reads “If at any period after a municipal council has appointed a municipal manager, the MEC becomes aware of information of non-compliance of such an appointment, the MEC must take the appropriate steps ….”;
• Remove Clause (10);
• That under Section 56 of the Bill Insert ‘56(1)(D)’ which states that “in case the position is vacant after the MEC’s approval of the acting period, the municipality must apply to the Minister via the MEC”;
• Insert a section after Section 56(1)(a) which addresses circumstances of a manager directly accountable to the municipal manager where the position is filled but the incumbent is acting due to incapacity, disciplinary process, study leave, litigation and  circumstances other than a vacant post. If the matter is not resolved after the extension of the acting period by the MEC, the municipality may apply to the Minister with the recommendation of the MEC for the Minister to make a determination; 
• That section (2) must be applicable to both 56(1)(a)(i) and (ii);
• Insert a continuation for Section (4) that reads “should a municipal council not find a suitable candidate even after they have re-advertised the post, the council must select from the pool of candidates that have applied from both advertising processes and apply to the Minister to waive any of the requirements in terms of skills, expertise, qualifications or competencies, as it would have not been able to find a suitable candidate”;
• That ‘14 days’ be removed from Section (4A)(b) - to read “The MEC must within 30 days of receipt of all the required information assess the appointment in terms of compliance with the Act and applicable regulations and communicate such outcome to the municipality”;  
• That ‘14 days’ be removed from Section (5) and a clause inserted that reads “If at any period after a municipal council has appointed a municipal manager, the MEC becomes aware of information of non-compliance of such an appointment, the MEC must take the appropriate steps ….”;
• That Section (6) be removed;
• That under Section 57 of the Bill  a section is inserted under employment contracts reading “Failure to comply with the timeframe to sign the employment contract must be supported by good cause shown and reasons by both incumbent and the municipality to MEC and Minister.”;
• That Section (b) is removed to be part of Section 57(6)(a)(i) to read “The employment contract to be signed by both parties before commencement of service or within 60 days after a person has been appointed”; and
• That Section 57(9)(b) is deleted.

Discussion
Mr X Ngwezi (IFP) said his concern with the amendments was on ‘concurrency’ and that appointments would take longer than 14 days if there was the proviso of getting the concurrency of the Minister on appointments. He suggested that the Minister be made aware of the appointments. He said there would be problems and possible court cases around concurrency because municipalities were controlled by political parties and the concurrency of the Minister on municipal appointments could be challenged. He said he agreed with the presenter on the issue of acting positions and suggested that a body such as Exco, rather than Council, should make the acting appointments.

Ms N Shabalala (ANC) wanted to check the reasons for the suggestion of 30 days instead of 14 days. She asked if there was proof that municipalities were supplying the Department with the wrong information.
 
Mr J McGluwa (DA) said the Councillors’ code of conduct should be amended to include a provision that prevented Council from passing a resolution that was in conflict with legislation.

Mr Moroape said that one way would be that if the MEC had not responded within 30 days the matter be referred to the Minister and the municipalities should not take the position that the appointment was OK because the MEC had not responded to the matter. If the Minister also did not respond then it could be said that the three spheres of government was not responsive to the issue.

He said the suggestion that Exco could appoint an acting municipal manager in cases of incapacity or other reasons must be adopted.

On not receiving the correct information, he said it was also a case of chasing municipalities to get any information. Sometimes it was because municipalities did not check the requirements of regulations and what verifications municipalities had to do. He said he was not sure whether it was deliberate or not. For example, qualifications from outside the country needed to be verified, yet municipalities would just accept the qualifications.

On the code of conduct of councillors, he said that in some cases, especially the cases of VBS bank, it became onus of proof cases of who did not knowingly make transgressions.
 
He submitted that while the solution that says Councillors can’t take decisions in contravention of laws and regulations be adopted, the regulations also need to be strengthened because sometimes MECs faced a difficult situation where the MEC was in charge of a matter but was not given the administrative control for the matter. In other cases, MECs were in administrative control of a matter but not in financial control.

On the more substantive amendments to the Bill, Mr Dan Mashitisho, DG, DCoG, said that the Department could not do justice to the Bill in the short period of time available. The amendments were a procedural matter which had to be done properly. The Department knew about the gaps in the system and many things need to be changed but was for now focussing only on those areas that were unconstitutional.

Mr Teboho Motlashuping, Acting DDG for Institutional Development, COGTA, said he wanted to emphasise the Gauteng Province and DG’s comments on the MINMEC decision to look at possible changes to the Bill and a task team was formed to receive inputs from all the provinces to look at the entire act. The team met again with a legal team to look at proposals. So, there were a number of issues that were not included because of the Parliamentary processes, like that of public participation that needed to be followed.

The Chairperson said the 6th Parliament would be dealing with these other matters.

The meeting was adjourned