Draft report of the Select Committee on Local Government and Administration on the intervention in the Elundini Local Municipality
Dated 20 January 2005
On 8 November 2004, the NCOP was notified of an intervention, in terms of Section 139(1)(b) of the Constitution, by the Eastern Cape Provincial Government in the Elundini Local Municipality. The provincial government had submitted an application to the NCOP for approval of the intervention in compliance with the requirements of Section 139(2)(b).
The Select Committee on Local Government and Administration conducted an urgent fact-finding visit to the Elundini Local Municipality between 30 November and 2 December 2004 to consider the application for approval of the intervention. The Committee was of the view that, although Parliament had gone into recess for 2004, the time lapse until Parliament resumed its sitting in 2005 was too long. Immediately following the fact-finding visit the Select Committee submitted a number of urgent interim recommendations to the Municipality in order to further facilitate the turn-around of the Municipality in the interim.
During the visit, discussions were convened with the MEC for Local Government, the Provincial Portfolio Committee on Local Government, the Ukahlamba District Municipality, SALGA, both the political and administrative arms of the Municipality, Ward Committees, community representatives and other stakeholders in the Elundini Municipal area.
The Select Committee delegation was comprised as follows:
The Hon S Shiceka (Gauteng) – leader of the delegation
The Hon B Mkhaliphi (Mpumalanga)
The Hon C Ntuli (KwaZulu Natal)
The Hon A Moseki (North West)
The Hon T Ralane (Free State)
The Hon Kgoshi Mokoena (Limpopo)
The delegation was also accompanied by Members of the Eastern Cape Provincial Portfolio Committee on Local Government.
Having considered the application for approval referred to it, the Select Committee on Local Government and Administration reports as follows:
Summation
The Elundini Local Municipality consists of three rural areas, Mount Fletcher, Tsolo and Qumbu. The rest of the sub-district is mainly farming area with two urban service areas, Maclear and Ugie. The Ukhahlamba District is bordered by Lesotho, the Free State, the Northern Cape, and the southern areas of the Eastern Cape and accommodates some 371 170 people (Mid-2002 estimates, Census 1996 statistics).
Elundini comprises the disestablished Municipalities of Maclear Transitional Local Council, Mount Fletcher and Ugie.
The Elundini Local Municipality is a collective executive system combined with a ward participatory system. In practice, therefore, an Executive Committee (EXCO) exercises executive authority. Standing Committees established by the Council report to the EXCO. Issues affecting local residents are addressed through ward committees. The Council comprises 32 Councillors, 16 Ward Councillors and 16 PR Councillors. The breakdown is as follows: 28 African National Congress and 4 United Democratic Movement. EXCO is comprised of six full time Members. The Council has appointed ward committees.
Elundini falls within the jurisdiction of the Ukahlamba District Municipality. Ukhahlamba District is one of thirteen rural nodes that have been earmarked by the President to be part of the Integrated Sustainable Rural Development Programme. (ISRDP)
Terms of the intervention
The province is seeking approval for the intervention in the terms which follow below. The Speaker was requested to convene a special Council meeting on 15 October 2004 where the intervention was formalised. The Municipal Manager and the Chief Financial Officer together with a Departmental Team were tasked with drafting a turnaround strategy within 14 days of the intervention date.
The turnaround strategy for Elundini Local Municipality incorporates an action plan that will focus on the following broad parameters:
In the area of financial management:
A summary of the issues gleaned from discussions held during the fact-finding visit can be summarised as follows:
Service delivery issues
In the main there is no visible service delivery in the Municipality. This is evidenced in the poor state of roads, non-collection of buckets and, for instance, the absence of streetlights in the Sonwabile Township. Members of the community have staged sit-ins and marches to the Municipal offices.
Some financial assistance has been provided in this regard; for instance, a grant of R 750 000 received by the Municipality for infrastructure development was used for RDP houses and other projects.
The percentage of the Municipal budget available for service delivery is inadequate. The proportion of the budget being spent on salaries currently far exceeds Treasury norms. Since the area has no revenue raising capacity, the Municipality relies heavily on the equitable share.
The rural nature of the municipal area presents certain inherent infrastructure challenges, particularly with regard to the provision of water and sanitation. While there is water borne sewerage in some parts of town, in other areas use is still made of the bucket system. The growth in informal settlements is also a contributory factor.
The fact that a high proportion of the budget is being spent on salaries also inhibits the funding available for maintenance. Given the low levels of maintenance of amenities, services and facilities, over the last five year period, `it is likely that a greater need for maintenance of such facilities will arise shortly.
Stakeholders noted that, due to the dominance of certain groupings within the functioning EXCO there is a perception that service delivery is skewed in favour of the Mount Fletcher area. Therefore, residents of the towns of Ugie and Maclear perceive a bias against them.
The administration
The staff structure of the Municipality is bloated. This is coupled with serious capacity shortcomings as well as a lack of discipline, cohesion and control within the administration. Contractors are used to supplement this lack of capacity. A critical issue is the fact that the incumbent Municipal Manager appears not to have the appropriate skills and capacity.
The relationship between the Speaker and the Municipal Manager broke down following the latter’s suspension, and there has since been little co-operation between the two. This means that there is effectively no interface between the administration and the Municipality’s political leader.
It appears that there is a lack of understanding about responsibility to be taken for the appointment of staff. A number of people were employed during the period of suspension of the Municipal Manager, without proper procedures being followed. These employees do not have clear responsibilities.
In the Human Resources Department, there are two Corporate Services Managers, following the suspension and subsequent reinstatement of one Manager by a Court order.
There are no performance agreements for the Municipal Manager and senior managers and payment of their performance bonuses therefore constitutes irregular expenditure.
Since the amalgamation of the three disestablished local authorities the remuneration and salary scales have not been the same for all employees of the newly established Municipality. This relates to a dispute regarding the grading of the Municipality for the purpose of fixing staff salaries and benefits. The grading accepted by the Council is Grade 4, which is based on a formula recommended by SALGA, being the grading of the highest disestablished authority plus 1. Long-serving staff members are paid according to a different salary scale and this has led to considerable dissatisfaction.
Council has established a placement committee but there have been considerable delays in the process of staff placement and finalisation of the organogram.
Amongst staff, there is tension between the Community Services Manager and the Municipal Manager, which adversely affects the Community Services Department.
The Speaker of the Municipality is said to have employed 50 new employees with whom she has close personal associations. It is alleged that she uses disaster funds to pay the salaries of the 50 employees. The employment of the 50 also delayed the placement of internal staff. They were also employed on the wrong salary scales.
Suspension and reinstatement of the Municipal Manager
The Municipal Manager, Mr Belebesi, was suspended with effect from 15 February 2002, so that further investigation could be done to verify his qualifications, and investigate his failure to disclose the report of the Auditor General to the administration and Council.
The manner in which he was subsequently reinstated is being questioned. His reinstatement was approved by EXCO and not considered by the whole Council. This was after he was cleared of charges against him, including the fraud and assault charges in the Maclear Magistrate Court. Mr Belebesi resumed his duties on 22 July 2003.
Allegations that the Municipal Manager lacks the relevant skills and expertise to perform the duties associated with the post persist.
Adherence to policies and laws
There are serious shortcomings in the adherence by the Elundini Local Municipality to the relevant local government legislative framework:
Following the receipt of reports from the municipal departments of finance, corporate services and technical services, in September 2004, the Ukahlamba District Municipality noted the following:
Political divisions and tensions
The financial and administrative challenges faced by the Elundini Municipality manifest themselves starkly in infighting among Councillors and leadership within the Municipality. By the end of 2004, it had become common for special Council meetings to be convened, as normal Council meetings did not take place.
The divisions in Council manifested shortly after the demarcation process was completed in 2000, as a result of which the Elundini Local Municipality was established from the amalgamation of the disestablished TRCs of Maclear, Mount Fletcher and Ugie. The leadership emanates from these different regions, Councillors have remained regionalised and there has since been ongoing disunity in the Council.
At a political level there have been serious interventions to diffuse divisions even in so far as regional party leadership meeting with Councillors in an attempt to harmonise relations. However, the political tensions continued to mount as these interventions were met with defiance against the political leadership.
There is also confusion around the roles and responsibilities of the Speaker and the Mayor’s offices respectively. For instance, the agenda of Council meetings is not generally determined jointly by the Speaker and the Mayor, but is dominated by the Speaker. The Speaker restricted Managers’ responses and this has also led to the undermining of the Municipal Manager. The confusion and divisions have filtered down to the administration, which is factionalised.
There is a long history of conflict involving the Speaker, and it appears that the conflict may be a result of personality problems between the Speaker and Council. The Speaker is widely viewed as being autocratic. Although the Speaker was suspended several times, the suspension led to numerous procedural problems. The Speaker still appears to have a great deal of support from within the community.
The Speaker attempted to dismiss 21 Councillors when these Councillors failed to attend three consecutive ordinary Council meetings in terms of Schedule 1 Section 3(a) of the Municipal Systems Act. Their suspension would have resulted in a lack of a quorum.
There are currently two EXCOs in place, although only one is properly authorised. The present EXCO was never recognised by the Ukahlamba District Municipality and other Councillors in spite of legal procedures having been followed by the Independent Electoral Commission and Councillors. This led to a breakdown in the working relationship between the District and the Local Municipality as present EXCO members were never notified of meetings of District Standing Committees on which Elundini had representation.
Financial state of the Municipality
The budget of the previous year was not passed. The percentage of the budget being spent on salaries is excessive. The salary budget has increased significantly over a number of financial years: R 14 million in 2002/03, R 22 million in 2003/04 and R 31 million in 2004/05.
Due to the high salary budget, little is spent on maintenance and this has resulted in dissatisfaction on the part of residents. Since the area has limited revenue-raising capacity and current relies heavily on the equitable share.
There are perceptions of maladministration and mismanagement but concrete evidence is lacking. An investigation was launched in order to substantiate the allegations. The investigation was meant to try and understand the depth of the problems beyond the political.
Role of the provincial Department
The MEC noted that the Department has been working with the Municipality administratively and politically to resolve problems. But political problems are more difficult to solve. Under the auspices of the Municipal Support Programme, a consultant was appointed to the Municipality but the consultant found it difficult to address problems and then decided to launch an investigation instead. The report is being awaited.
A Management Support Specialist Team comprising specialists in the areas of Administration and Institutional Matters, Finance and Human Resources, visited Elundini Municipality on 22 January 2003 at the request of the Department. The purpose of the visit was to determine the underlying reasons for the problems facing the Municipality. The final report of the Team was based on interviews with senior municipal officials. Many of the weaknesses identified in the report have been incorporated into the turnaround strategy.
It appears that the Department does not have the capacity to intervene comprehensively, especially given its 50% vacancy rate. This is therefore a targeted intervention in the areas of Human Resources and Finance. Three mentors will be appointed, in respect of Service Delivery, Finance and Corporate Services. An amount of R2, 5 million has been budgeted for this purpose.
The MEC noted that the Department was drawn into the process very late and has struggled to resolve political problems.
Ward Committees
It appears that there is limited community participation in the affairs of the Municipality and that the community is not involved in key processes such as drafting the budget and the IDP. The Council did not communicate the challenges being faced by the Municipality to the community. There is therefore no alignment between the work done by ward committees and municipal priorities.
Since their establishment, it appears that ward committees do not function effectively. Ward Committees are not adequately supported to enable the attendance of meetings. While Ward Committees received the necessary training, the Municipality appears to lack the resources to support the ward committee system and continue to develop capacity.
There is also tension between members of Ward Committees, frustrated by the lack of resources, and Community Development Workers, who are remunerated for their work.
Observations of the Select Committee:
The Committee notes that many of its concerns and recommendations are encapsulated in the terms of reference of the intervention. However, the following areas are of particular concern to the Select Committee and are deserving of careful and urgent attention:
Progress made since the start of the intervention
While the need for the intervention is widely acknowledged by the District Municipality, Ward Committees, business leaders and farmers and so forth, it appears that progress has been slow and inadequate.
An extreme view expressed by the District Municipality is that an intervention in terms of Section 139(1)(b) may be too lenient and that the Council should be dissolved with immediate effect.
The fact that the Administrator appointed by the province is located in Bisho creates the perception that he is not in control and not responsive to the concerns of the community and its stakeholders, including the Business Chamber. The Administrator was noticeably absent from a public meeting convened by the Business Chamber. There are misunderstandings about the role of the Administrator and the Municipal Manager respectively.
Representatives of the Business Chamber noted that the Municipality is on the brink of expansion through tourism, agriculture and the building of a new road running from Cape Town to Durban through the town. However, the Municipality needs to upgrade facilities urgently in order to maximise the advantage of such developments. A number of projects have been proposed, such as an aquaculture project, yet the Municipality has failed to follow up on the proposal. The lack of co-operation by the Municipality has also led to loss of interest by the Development Bank of South Africa and the Eastern Cape Development Corporation.
Recommendations:
The Committee therefore resolves to recommend to the House as follows:
That the provincial government continues the intervention in the Elundini Local Municipality terms of Section 139(1)(b), with the continued urgent roll out of the turn-around strategy.
That the MEC must submit a report to the NCOP every month after receipt of this report. These reports should focus on the terms of reference for the intervention and areas of concern raised in this report. The Ministry of Local Government should also play a role in monitoring the progress of the intervention.
Time frames for the implementation of the turn-around strategy as well as the recommendations outlined bellowed should be agreed upon between the Municipality and all relevant stakeholders; the adherence to these timeframes will also be monitored by the Select Committee.
The Committee further recommends:
The use of buckets by residents must be phased out by the Municipality. Viable alternatives must be investigated and costed urgently.
It appears that the Municipality is not implementing a policy of free basic services. The Municipality must be assisted to develop mechanisms to provide free basic services as soon as possible.
The proportion of the budget currently being spent on salaries is untenable. The process of placement should also seek to reduce the salary bill.
Ending of the intervention
It is envisaged that the intervention will continue until the Administrator, together with the Department of Local Government, is satisfied with the implementation of the turn-around strategy, levels of service delivery as well as the long-term rehabilitation of the Municipality.
Report to be considered.