5 October 2002

Dear Yunus

The Board has made a number of representations to the Department of Provincial and Local Government to amend the Demarcation Act, amongst others, to ensure that all the activities of the Board are covered by appropriate legal provisions, to streamline the demarcation process and to save costs. With regard to the latter you are well aware of the fact that the Board’s MTEF baseline was not correctly determined in the first place. This has perpetuated a situation in which the Board has been given allocations that are insufficient for the Board to carry out its mandate effectively. This has led to the untenable situation where the Board has had to rely on donor funding to perform certain key functions.

You will recall that the Portfolio Committee also addressed the financial position of the Board in the Committee’s 2002 report to Parliament, and that the Committee expressed the view that the Board should be funded adequately. In view of the preparations that must be made for the next local government elections, including the delimitation of wards, the Board approached MTEC for the allocation of an additional amount of R9,4 million during the 2003/2004 financial year, and an additional amount of R17,1 million during the 2004/2005 financial year. These amounts were rejected by MTEC and the Board will only receive an additional amount of R2 million during 2003/2004 and R3 million during 2004/2005 which will be totally inadequate for ward delimitation. Against this background the Board remains of the view that some money can be saved through appropriate amendments to the Demarcation Act.

However, it has come to the attention of the Board that the Local Government Laws Amendment Bill that will soon be tabled in Parliament by DPLG, does not contain key amendments proposed by the Board over the past two years, and which will directly impact on our finances. As I understand it, only technical and non-substantial amendments have been accommodated by DPLG officials.

Since 2001 the Board proposed a number of key amendments to DPLG. This was followed up by further verbal and written representations. More that 2 years later the Bill submitted to you contains only minor technical amendments to the Demarcation Act, and ignores the detailed assessment provided by the Board.

I know that, due to a lack of progress in dealing promptly with matters such as municipal powers and functions, the Portfolio Committee is now being put under severe pressure to get the Bill through Parliament before 5 December 2002. I would therefore not like to burden the Portfolio Committee with a request to consider all the amendments proposed to DPLG over the past two years. However, I would like to recommend that the Portfolio Committee considers at least the following amendments for inclusion in the Bill:

This section restricts the functions of the Board to "determine municipal boundaries in accordance with this Act and other appropriate legislation enacted in terms of Chapter 7 of the Constitution." In practice the Board’s activities cover a much wider field. In terms of a Cabinet resolution of 1998, the Board must assist government departments to align functional service delivery boundaries with municipal boundaries. This resolution is key to ensuring spatial alignment for orderly planning and development. Though the Board is attending to the Cabinet resolutions there is no legal mandate for such assistance and the proposal of the Board was meant to fill this gap.

Furthermore, and in addition, it should be noted that the Board receives requests for assistance on an ongoing basis. Amongst others, the Board was requested by the Minister to investigate alternatives to deal with cross boundary municipalities. Such a report was prepared and submitted to the Minister in May 2002. Such assistance also falls outside the scope of the provisions of section 4. As a constitutional institution the Board would like to ensure that it operates within the limits of the law and we recommend that the section 4 be amended as follows to empower the Board to continue with its assistance to other organs of state:

"4. The functions of the Board [is] are (a) to determine municipal boundaries in accordance with this Act and other appropriate legislation enacted in terms of Chapter 7 of the Constitution.

From time to time the Board receives requests for minor adjustments to municipal boundaries such as the inclusion or exclusion of a small portion of a farm that was divided during the pre-elections demarcation process. In addition, the Board is working with the Office of the Surveyor General, Stats SA, the IEC and other role players to correct boundaries technically. Although the municipal boundaries are currently ‘legally’ correct, since they follow the parent farm cadastre, some are not ‘technically’ correct as there are accuracy problems in certain areas with the parent farm cadastre. This is due to the fact that the SG generally captured the cadastre by digitizing the boundaries from SG diagrammes and compilation plans. Evaluation of the municipal boundaries superimposed upon satellite and orthophoto imagery indicated that there are numerous cases where the municipal boundaries ‘split’ villages and smaller settlements and are not aligned to natural features such as rivers, fences and roads.

As the Act stands now all these minor and technical alignments must go through a very elaborate and costly legal process involving the publication of very expensive notices in the media and Provincial Gazettes. Since 1999 printing costs amounted to some R 6 million. A considerable amount of time and money can be saved by amending the Act to allow for a shorter process when dealing with minor and technical adjustments to boundaries. However, consultation with key stakeholders such as the relevant MEC and the municipalities affected by the minor and technical changes, should remain a legal obligation.

The following addition to section 21 is recommended:

Some requests being received for the re-determination of municipal boundaries, contain very limited motivation. Consequently the Board must employ a considerable amount of its limited resources on research, investigations, publications etc. To shift the onus to provide all relevant information, to the person requesting a re-determination, will undoubtedly alleviate the pressure on the Board’s resources. The Board would therefore like to recommend that the following be added to section 22:

Advertisements in newspapers, radio advertisements and the publication of notices in Gazettes, are extremely expensive. In view of the Board’s existing and future funding scenarios, it is with great hesitation recommended that the Board be empowered to claim costs from the person approaching the Board to re-determine a boundary. Should the Portfolio Committee be able to convince DPLG and National Treasury to fund the Board properly, this proposal will gladly be withdrawn.

The following addition to section 26 is proposed:

Although the extension of the transition period provided for in Act 33 of 2000 could have been avoided, the amendment is welcomed to allow more time to deal with municipal powers and functions. However, DPLG failed to address key issues in the proposed amendments to the Structures Act. The fact that the Minister is about to authorise some 54% of Category B (local) municipalities to perform the water and sanitation functions while section 84(1) of the Structures Act allocates these functions to district municipalities, clearly indicate that some adjustments are required either to the Act or to the authorisations. The division of powers and functions between local and district municipalities as provided for in the Structures Act is defeated by such major deviations.

Prior to the 2000 local elections, the Demarcation Board rationalised municipalities through the demarcation process with the intention that districts would play a key role at local level as envisaged by the Structures Act. The major deviation from the intention of the legislator that districts must perform certain key functions and local municipalities all other municipal functions, places a question over the need to continue with a two tier system of local government outside metropolitan areas. As the Board is not aware of any policy initiatives to review the existing system, and in view of the weakening of the role of district municipalities through authorisations, the Board may then need to consider a further reduction in the number of district municipalities before the next local elections.

Furthermore, it should be noted that the minister has an unfettered discretion to authorise a local municipality to perform one or more of the so-called "national" functions namely water, sanitation, electricity and municipal health service.  All other municipal functions can only be adjusted between district and local municipalities if a district or local municipality lacks the capacity to perform a function that vests in such a municipality. Should a district or local municipality thus have the capacity to perform a function, such function may not be adjusted and, the MDB is legally obliged not to recommend an adjustment. This situation inhibits alignment of authorisations by the Minister and adjustments by MECs.   The fact that these processes (DPLG and MDB) are inextricably linked finds no resonance in the Act and will therefore find no resonance in reality. A serious examination of the existing scheme for the division of powers and functions between district and local municipalities so as to ensure that the linkages between the processes of the MDB and the DPLG are more apparent and coherent, appears to be overdue. The danger of court battles is very real because municipalities will literally fight for survival.

There are a number of other difficulties in applying the provisions pertaining to the division of powers and functions between district and local municipalities, such as the unclear definitions of functions – not only municipal functions but also in respect of similar functions being performed by the three spheres of government.

We believe the Department responsible for transformation at local level, together with all stakeholders and roleplayers, must play a leading role in identifying and correcting gaps in legislation which adversely affect the transformation process.

Thank you in anticipation.

Sincerely