The Select Committee delegation comprised the following delegates:

• Ms P. Hollander, who joined the delegation in Vrburg

The delegation was accompanied by the Chairperson as well as Members of the North West Portfolio Committee on Local Government. The Select Committee proposed that the Portfolio Committee work in a strategic partnership with the NCOP so that briefings and meetings with stakeholders were not duplicated and their tasks could be co-ordinated.

Meetings were held with various stakeholders, which included the MEC for Developmental Local Government and Housing, the Executive Mayor (Bophirima District Municipality), the Administrator, the Municipal Manager, line managers, representatives of SALGA, representatives of organised labour as well as members of the organised business community, NGOs and CBOs.

Having conducted an in loco inspection at the Municipality, the Select Committee reports as follows:

The Municipality experienced ongoing political and administrative instability. The Council as well as the administration was divided into factions. These divisions caused instability in the Municipality, which in turn hampered service delivery and resulted in backlogs. There was also extensive political interference in the administration of the Municipality. Most of the municipality's by-laws are outdated and not aligned with a developmental local government focus. Their relevance must be examined and they must be realigned.

The Council was therefore dysfunctional on many levels:

On 22 December 2003 a Council meeting was held where it was resolved that an Acting Municipal Manager should be appointed. The Acting Municipal Manager appointed a number of general workers. On 10 January the Mayor recalled the Municipal Manager. On 13 January a letter was written to the general workers notifying them that they were not properly appointed. The substantive Municipal Manager instructed the bank not to pay these employees but the Acting Municipal Manager gave the bank a conflicting instruction. As a result, these employees were paid.

On 16 January 2004 a Council meeting was, allegedly, held. At

Council is alleged to have resolved the issue of the suspension

Manager and condoned the appointment of the employees

Municipal Manager. It is believed that the meeting was disrupted

the public.

this meeting the of the Municipal by the Acting by members of

During this period the MEC for Developmental Local Government and Housing visited the Municipality three times, but the tensions were not resolved. When it became apparent that the Municipality would not meet the 30 June deadline for the adoption of the budget, it was agreed with the MEC that the Council would be dissolved and an Administrator would be appointed.

On 19 May 2004 the Provincial Executive Council took a decision in terms of Section 139(1)(c) to intervene in the Mamusa Local Council. The Executive Council approved an intervention in the Council in terms of Section 139(4)(a) and (b) of the Constitution. The MEC for Local Government and Housing was delegated the authority to decide which option should be used in respect of interventions approved. The Department was instructed to provide funding for the appointment of an Administrator. In terms of Section 139(4) the dissolution of the Council was effective immediately.

Mamusa has a Plenary Executive System combined with a ward participatory system. It has twelve councillors, three of whom have been suspended by their political party. Ongoing conflict between councillors has led to a breakdown in the management and administration of the Council. The separation between Councillors and the administration was often unclear with Councillors giving direct instructions to officials, instead of through the Mayor and the Municipal Manager.

In spite of the fact that all Councillors were part-time, they used the Municipality's facilities continually, to the extent of misuse in violation of the Code of Conduct. Personal interest and corruption was a root cause of the Municipality's problems.

There was fighting about the allocation of tenders, which has had a negative impact on service delivery. Irregular decisions were taken by Council on the awarding of tenders. Some contractors were appointed without a council resolution. Officials were co-oerced into appointing contractors for jobs.

The three suspended ANC Councillors orchestrated the appointment of the acting Municipal Manager as well as certain of the line managers, who lacked the ability to run the Municipality. However, these three Councillors could not have constituted the necessary quorum on their own and therefore could not have taken decisions without the collaboration of other Councillors. Since these other Councillors largely kept silent, they contributed to the breakdown of the Council's functions. The inference that can be drawn is that all Councillors are, to some extent, blameworthy for the breakdown of the Council.

The Councillors, a few days preceding the Section 139 application, began a process to oppose the intervention. Obtaining a Council resolution would have enabled them to access funds from the Council budget to fund a legal process to oppose the intervention. The Councillors briefed an attorney to obtain an interdict to oppose the intervention and stop the MEC. The Department convened a meeting with the attorney as well as with Councillors. The attorney sought an agreement for the MEC to withdraw the intervention. However, there was no legal basis for the MEC to do so. It became clear that Councillors were concerned about investigations against them and they argued that there were no problems in the Municipality's administration.

Many stakeholders expressed their concern about the return of the same Councillors following by-elections. Although the MEC has expressed little confidence in the Councillors he has noted that he is unable to ensure that not all return. He would leave it up to the political parties to nominate the appropriate people for re-election. Only once the investigation into the misuse of Council funds and property is completed, can recommendations be made on the indictment and arrest of particular Councillors. But this process will not be completed before the election of a new Council on 18 August 2004, the date established by the Independent Electoral Council.

Representatives of the business community requested that a forensic audit be conducted at the Municipality.

The Executive Mayor of Bophirima District Municipality reported that they had regular interaction with the Mamusa Local Municipality, taking advantage of the capacity within the District Municipality and SALGA. The last meeting with Mamusa was around February 2004 with the CEO of SALGA's national office and its Support and Intervention Unit. They had met with the then Mayor and the substantive Municipal Manager and later with the Acting Mayor and the second Municipal Manager. However, the problems faced by the Municipality were not only governance issues. Other party political issues were not within the scope of the District Municipality. It appeared as if these issues have played a greater role in the collapse of the Municipality. When the decision was taken to dissolve the Mamusa Council, the District Municipality received a report outlining the reasons for the dissolution.

In terms of the governance issues, SALGA and the District Municipality engage with all Municipalities in the district to discuss such issues and workshops are periodically held. There is no municipality which has not participated in workshops on local government legislation.

The Portfolio Committee on Local Government noted that it has had limited interaction with Municipalities in the province, including the Mamusa Local Municipality. The Committee has, however, agreed to draft recommendations on procedures to be followed in future interventions. The Committee is still awaiting a second briefing from the Department on the role of the Portfolio Committee in the intervention. The Committee argued that it is necessary to avoid a literal reading of the relevant legislation, namely, that only the concurrence of the NCOP is required to approve an intervention. This undermines the Portfolio Committee's role and is not consistent with the spirit of co-operative government.

The Administrator was appointed from the 23 June 2004 and is expected to retain the position for a three-month period, ending on 3 September 2004. The budget of the Administrator is still being finalised with the provincial Department of Local Government, which is responsible for his payment.

The Administrator must begin to create an administration. To do so he must undertake a skills audit and thereafter appropriately draft policies. Six key policies are needed. These include:

The Administrator will be augmented by competency teams using experts and consultants. An implementation plan will also be developed.

The Administrator is now getting the co-operation of the Managers. However, capacity is lacking and all municipal staff and managers need to be capacitated.

There is an IDP in place but it was never interacted with and implemented and there was no meaningful engagement on the document. On 23 July 2004 a meeting was held with relevant stakeholders to begin reviewing the IDP. One of the tasks of the Administrator is to ensure that the IDP is aligned with the budget.

For the past nine years, there has been no visible development in the municipal area. There are allegations that development projects only benefit the friends and family of Councillors. These projects need to be widely advertised; there are no opportunities given to young people. It also appears that bursaries are not made widely available to scholars.

This has been budgeted for and was adopted by Council on 22 December 2003. A placement committee had made recommendations on staff placements to the Council, following which, Council adopted the organogram. By December 2003 placements were, therefore, nearly finalised. However, Councillors then began to tamper with these placements. Organised labour, through IMATU, also raised problems with the placements. Certain Councillors had a vested interest in placements and it appeared that the workforce was divided along the same factions as Council.

In addition, there are no job descriptions in pace and no job evaluations have been done and this impacts negatively on placements. Competencies and skills attached to jobs were not taken into account. The Administrator is to ensure that job descriptions and evaluations are completed in order to finalise placements.

The Administrator will have to ensure that the process placement is continued and finalised. The Administrator is using professionals to assist in developing job descriptions and placements.

Only the Municipal Manager has an employment contract; none of the other line managers have such contracts. The Administrator is currently finalising these and is being assisted by Bophirima District Municipality in finalising performance contracts. Evaluations are not within the Administrator's scope. Rather, his role is to ensure that performance agreements are signed.

The Municipality has approximately 171 employees and the salaries bill amounts to around R1,2 million per month. All information with respect to human resources has always been dealt with by the Finance Department. Since 1 October 2003, the newly appointed Corporate Services Manager has been battling to get information. There was no Human Resources Department in the Municipality until the organogram was finalised.

An Equity Plan was developed with consultants but was never adhered to. Appointments were haphazard and along faction lines.

With respect to the fifty additional general workers who were appointed, the Labour Court has ruled that they are now all permanent employees. The initial number to be employed was 26. The acting Municipal Manager appointed 24 general workers. Upon his return, the substantive Municipal Manager appointed an additional 26 workers. The case before the Labour Court was pending one week prior to the intervention. This case was pursued by Councillors against the advice of the Department. The Labour Court decision can be taken on review but it is not easy to succeed in such cases. The excess employees are now permanent employees. Both Municipal Managers will be disciplined as the appointment of these employees was a purely administrative function and resulted in great costs to the Municipality. The Municipality did not budget for the 26 additional staff, who were not in the organogram.

The Administrator has undertaken to deal creatively with the additional staff. The Administrator, has, for instance, noted that many staff members are past the retirement age. Council has placed a moratorium on filling of vacancies in the organogram due to cash flow constraints.

There are virtually no HR policies in place. These policies need to be drawn up and aligned with the organogram as well as key performance areas (KPAs) and key result areas (KRAs).

An Equity Plan was developed with consultants but was never adhered to and appointments were haphazard and along faction lines. The Administrator must also clarify whether labour was consulted on the policy. Labour itself appears to be divided. SAMWU's local branch is about to be dissolved by the provincial office.

These systems are mainly in place but there was a great deal of interference in financial management decisions. Council decisions never took into account the financial position of the Municipality. There was poor VAT recovery by the Municipality. Projects were approved and executed without the necessary funding being available.

The Municipality has no IT division and not all computers have been enabled to provide internet access.

An evaluation roll and indigent register is in place. The drawing up of a new evaluation roll has been approved.

By 18 August there must be an induction plan and training programme in place on the roles and functions of councillors, following the elections.

A temporary budget was approved by the Administrator on 30 June 2004. The budget is being monitored and reports are sent to the provincial Department of Local Government.

Before the adoption of the interim budget on 30 June, meetings were held with the community. The community was concerned about the lack of consultation on previous budgets.

Although there are ward committees in place, they are factionalised and non-functional. There are now attempts under way to revive the ward committees, which need to be more involved in other processes, such as the review of the

IDP.

Payment levels in the municipal area are low; the average payment level is 57%.

The payment level in Schweizer-Reinecke is 95% and Tzaneen is 53%. In

Ipelegeng it is only 5%. A joint programme with the national Department of

Provincial and Local Government will be executed to ensure that payment levels

are improved.

The Municipality has a bank balance of R115 000. Debtors amount to R27 million and creditors to R3,6 million. Investments amount to R300 000. Schweizer is a semi-rural area. In terms of its income generating capacity, it is very poor and unemployment levels are high. Farm workers are frequently evicted from farmers and resort to squatting. There are no factories or businesses to provide employment.

There is some difficulty with implementing the credit control policy. Although arrears have been handed to attorneys, the recovery levels are poor. The Municipality is considering the employment of debt collectors to raise the payment levels.

The Deputy Director of Finance in the Department of Local Government is auditing the finances of the Municipality. The legal division of the Department is also conducting its own investigation into kickbacks and so forth. This does not form part of the Administrator's mandate and the Department will therefore decide on the relevant action to be taken against particular Councils and officials. Councillors living in lpelegeng did not properly scrutinise those classified as "indigent". The result is the inclusion of people on the indigent register who can afford to pay for services.

Beyond the dissolution, there is a team working jointly with SALGA's Councillor Training unit. SALGA is able to send the Unit into Municipalities where there are training needs. The University of the North West is also involved in programmes to train and capacitate Councillors. A joint programme between the University and the provincial Department of Local Government has been initiated and a training programme for Councillors has been developed.

There is a Mayor's forum, which includes all the Mayors in the District and the Executive Mayor who periodically meet to discuss issues facing the district. There is also a Municipal Manager's forum to discusses issues and problems facing municipal managers in the district and begin identifying ways to solve these problems. In the forum, responsibilities have been allocated. If a municipality is seen to lack capacity, an intervention is initiated to assist and the provincial Department and SALGA may also be approached.

There were concerns expressed regarding the accountability of the Councillor for the ward, since the Councillor is also chair of the ward committee. It was proposed that the Councillor should just be a member of the ward committee so that he can account to the ward committee and not vice versa.

The ward Councillor has a responsibility in the ward. Ward committees should ensure that there are regular meetings, that together, with the Councillors, they serve the Committee in that ward. They are non-functional and this is problematic. Those who do not function must be replaced continuously.

Representatives of civil society reported that they were never informed directly of the problems experienced by the Municipality, but instead heard through the media. This highlighted the need for greater community participation and involvement in the functioning of Council.

With respect to the procedural and monitoring aspects of the intervention, the Select Committee notes the following recommendations:

The Department cannot turn the situation around in three months. On the 18 August, following by-elections, a new Council will be instituted. This means that legislative powers will be restored to the Council. However, there is an option to extend the intervention using Section 139(1)(b) of the Constitution, which will focus on taking over the executive functions of the Municipality, particularly those functions which the Municipality is unable to fulfil.

Having considered the inputs from the administration of the Municipality and the relevant stakeholders, the Committee resolves to support the intervention by the North West provincial government, in terms of Section 139(4). Further, supports the continuation of the intervention after the 18 August 2004, in terms of Section 139(1 )(b).

Further, that the Office of the MEC submit monthly reports to the NCOP, in order to enable the Council to monitor the intervention regularly. These monthly reports should focus on the terms of reference for the intervention as well as the areas of concern raised in this report.

Report to be considered.