ATC190904: Report of the Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements Inspection in Loco on Notice of Intervention, issued in terms of section 139(1)(b) of the Constitution (1996), in Mtubatuba Local Municipality, dated 4 September 2019

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

Report of the Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements Inspection in Loco on Notice of Intervention, issued in terms of section 139(1)(b) of the Constitution (1996), in Mtubatuba Local Municipality, dated 4 September 2019
 

1.         Background and Overview

 

1.1        The Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements, having considered the request by the National Council of Provinces (NCOP), to consider and report on the intervention notice invoked in Mtubatuba Local Municipality in terms of section 139(1)(b) of the Constitution, the Select Committee reports as follows:

 

1.2        In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the KwaZulu-Natal MEC for Cooperative Governance and Traditional Affairs (CoGTA), to the Select Committee for consideration and reporting. On 03 September 2019, the Select Committee conducted a loco inspection in Mtubatuba Local Municipality.

           

2.         Objectives of the Inspection in Loco to Mtubatuba Local Municipality

 

2.1        The main objectives were to interact with the internal and external stakeholders of the Municipality, in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(b) of the Constitution.

 

3.         Composition of the Delegation

 

3.1        The Select Committee delegation was composed of the following Members of Parliament and officials: Hon ZV Ncitha (ANC) Eastern Cape; Hon SE Mfayela (IFP) KwaZulu-Natal; Hon AB Gxoyiya (ANC) Northern Cape; Mr N Mfuku (Content Adviser: Committee Section); Ms J le Roux (Researcher: Research Unit); Mr M Mbebe (Procedural Officer: NCOP) and Mr G Mankay (Committee Assistant: Committee Section).

    

4.         General Overview of the Inspection in Loco at Mtubatuba Local Municipality

 

4.1        On 03 September 2019, the multi-party delegation of the Select Committee interacted with the Department of CoGTA, Administrator, Representatives of the Inkatha Freedom Party (IFP), African National Congress (ANC), African Independent Congress (AIC), Economic Freedom Fighters (EFF), Rate Payers Association, Business Chamber, Amakhosi, South African Local Government Association (SALGA), Representative of Independent Municipal and Allied Trade Union (IMATU) and the South African Municipal Workers Union (SAMWU).

 

4.2        The presentation of the Department focused on the substantive reasons for the intervention, support measures, resolutions of the PEC and terms of reference of the Administrator, and key factors impacting on the intervention. The Administrator tabled a recovery plan of the Municipality. The representatives of the internal and external stakeholders of the Municipality tabled their opinions on the invocation of the intervention in terms of section 139(1)(b) of the Constitution in the Municipality.

 

5.         Presentation by the Provincial Department of CoGTA

 

5.1        It was reported that after the August 2016 Local Government Elections, it emerged that no party had received a clear mandate from the voters, with both the ANC and IFP obtaining 18 seats each, DA 2 seats while the EFF and AIC obtained 1 seat each. The IFP, DA and EFF agreed an arrangement which allowed them to govern the Municipality.

 

5.2        Since 2016, there have been two by elections (Ward 4 and Ward 12) held at the Municipality, of which the outcome of the by-election in Ward 4 was challenged by one of the parties, and eventually set aside by the Electoral Court.  The decision of the court was appealed by one of the parties. The Electoral Court directed the IEC to hold fresh by-elections in Ward 4 of the Mtubatuba Municipality in terms of section 25(1)(b) of the Municipal Systems Act. However, it should be noted that the by-election for Ward 4 has been subject to litigation for a long period of time and to date, such election has not been held, consequently the Ward is operating without an elected Ward Councillor.

 

5.3        Based on the challenges identified, it became abundantly clear that there was a need for yet another constitutional intervention. In the circumstances the PEC took the view that it was necessary to invoke the provisions of section 139(1)(b) of the Constitution, in order to stabilize the Municipality.

 

5.4        The apparent dysfunctionality of the council evident in the failed several council meetings, and meetings of other structures of the council, due to amongst other things, the lack of quorum, staged walk-outs and recently, disagreements around the interpretation of the Electoral Court judgment which set the by-election in Ward 4 aside. Further, the failure by the council to exercise oversight on the management, as it was alleged that decisions purported to have been taken at council meetings were implemented by the municipal administration, which exposed the Municipality to serious financial and governance obligations, and no investigation has been undertaken by the council to date.

 

5.5        On basic service delivery, it was reported that the Municipality failed to effectively deal with the long outstanding proliferation of refuse matter, particularly in the town of Mtubatuba and St Lucia. The Municipality continues to operate an unlicensed refuse dumps, and constant threat of closure from the National Department of Environmental Affairs. The non-fixing of potholes in the entire town, poor maintenance of street lighting, inconsistent provision of services in different wards, particularly water and housing units, prompted the assumption of executive obligations of Mtubatuba Municipality.

 

5.6        On financial management, the substantive reasons that contributed in placing the Municipality under administration included:

 

• The failure by the council to adopt the annual report, annual financial statements, audit report and audit response plan in accordance with section 127 of the MFMA, by the statutory deadline of 31 January 2019.
• The failure by the Municipality to submit its unauthorised, irregular, fruitless and wasteful register for the period ended 31 December 2018, in accordance with section 32(4) of the MFMA. 
• The Municipality’s failure to implement consequence management in terms section 32(2) of the MFMA, as the Municipality has written off R192.855 million, including R122,061,842 of irregular expenditure.
• The Municipality’s failure to take reasonable steps to prevent irregular expenditure of R122,061,842 in accordance with section 62(1)(d) of the MFMA.

        

6.         Progress on the Implementation of the Intervention in the Municipality

 

6.1        In the restoration of council and other meetings decorum in respect to the instability caused by constant walk outs and chaos in council meetings, it was reported that there was noticeable governance stability and improvement in council meeting in so far as walk outs.

 

6.2        In respect to public participation in the affairs of the Municipality, St Lucia Ratepayers were met on 17 April 2019 and 14 June 2019, and there were more engagements planned for the month of September 2019.

 

6.3        On the Auditor-General’s findings, an action plan dealing with the negative findings and consequence management on managers who might have caused irregular, fruitful and wasteful expenditure has been developed. A progress report in this regard has been reported to council.

 

6.4        In respect to poor expenditure management, an enhanced internal control mechanism to ensure that irregular, wasteful, and unauthorised expenditures do not occur has been developed. Standard operating procedures for approval, authorisation, withdrawal and payments of funds has been reviewed.

 

7.       Opinions of Political Parties and Stakeholders of the Municipality  

 

7.1        During the loco-inspection, the Select Committee interacted and solicited the opinions of the political parties, internal and external stakeholders of the Municipality. Their opinions are tabled below:   

 

 

8.       Opinion of the Inkatha Freedom Party (IFP)  

 

8.1        Although the intervention was supported, the Party contended that it was politically motivated. They argued that if the Municipality was supported in terms of section 154 of the Constitution, there could have been no need for the intervention. They pointed out that uMkhanyakude District Municipality and the Province were failing the Municipality in terms of support.

 

9.       Opinion of the African National Congress (ANC)

 

9.1        The ANC appreciated the invocation of section 139(1)(b) of the Constitution in the Municipality. They reported that previously, there were walk-outs in council meetings, to avoid wrong decisions being taken by council. However, there is still no political stability in council, hence the call for the intervention period to be extended. Further, they argued that there is a need for a review on job descriptions and salary scales.

 

10.      Opinion of the African Independent Congress (AIC)  

 

10.1      The Congress supported the intervention, and the work of the Administrator. They raised complaints regarding water challenges that should be urgently addressed.

 

11.      Opinion of the Democratic Party (DA)

 

11.1    The Party tabled an opinion that did not supported the intervention, since they claimed that communities were still complaining about service delivery.

 

12.      Opinion of Organised Labour (SAMWU)

 

12.1      The intervention was supported by the Union. However, concerns were raised on the decision and processes that led to the invocation of section 139 by the Department. They alleged that the intervention was invoked without sufficiently consulting the workers. They raised that some of the issues highlighted in the Administrator’s report were misleading, particularly on the operation of dumping site without a license from the National Department of Environmental Affairs.

13.      Opinion of the Independent Municipal and Allied Trade Union (IMATU)

 

13.1      The Union supported the intervention. However, they recommended that if there are processes and systems that are not working in the Municipality, the Administrator should consult and engage the representatives of the Unions. They emphasized that on issues that involved workers, cooperatively working together would achieve the objectives of the intervention.

      

14.        Opinion of the South African Local Government Association (SALGA)

 

14.1      It was reported that effective performance against the constitutional mandate of local government requires a coherent and co-ordinated set of support initiatives, from the other two spheres of government. The Association therefore advocated for section 154 of the Constitution. They argued that the aim of the intervention should be restorative rather than punitive, and the turnaround plan of the Administrator should have time frames which are linked to skills transfer.

 

15.        Opinion of the Rate Payers Association

 

15.1      There are challenges of water at St Lucia and that were particularly affecting tourism, including the closing of some lodges. At the time of the meeting, the Association stated that St Lucia has been without a reliable supply of water for 11 days already. If the situation persists, the Association assured that there would be job losses. Further, it was reported that the road infrastructure was collapsing, and residents were not receiving municipal accounts. However, despite all the challenges, the intervention was supported.

 

16.        Opinion of the Department of Human Settlements

 

16.1      There are few challenges encountered within the Municipality, and hamper service delivery in the provision of houses amongst the vulnerable individuals. The process requires the full involvement of the Department of Rural development and Land Affairs in the housing structures conducted in the district. There is a need for proper engagement of the line functional departments or stakeholders in the planning process to ensure integrated development in this Municipality. The Department hoped that the intervention would be of success, to ensure all the human settlement projects are implemented.

 

17.        Opinion of the Department of Water and Sanitation

 

17.1      The Department reported that there are reliability issues currently being experienced in the supply area, particularly during the flow periods, when the Mfolozi River run-off is mainly subsurface flow. It was further reported that the existing water supplies from the Mtubatuba run-of-river abstraction are not adequate to supply the current water requirements of the Mtubatuba scheme, including the extended supply area of Dukuduku. The situation was compounded by a lack of sufficient bulk infrastructure to service the areas of Dukuduku and Khula villages. There is a need to identify potential options for new water supply services, in order to meet the shortfalls.

 

18.        Opinion of Amakhosi

 

18.1      The Amakhosi hoped that the intervention would assist the Municipality, particularly in ensuring that those who are involved in corruption are arrested and charged. If the Intervention Team worked hand in glove with the Amakhosi, particularly on issues affecting their subjects, for example water challenges, so much could be achieved. The intervention was supported.

 

19.        Opinion of the Member of the Portfolio Committee on CoGTA in the Legislature

 

19.1      The Member of the Portfolio Committee in the Legislature emphasized that whenever there was an intervention in a municipality in the Province, the Portfolio Committee did follow-up and monitor the implementation of those interventions, to facilitate and ensure cooperative governance and intergovernmental relations.

 

20.        The Select Committee Observations and Opinion

 

20.1      In terms of the constitutional and procedural matters, the Select Committee has observed that the Minister for CoGTA, the NCOP, KwaZulu-Natal Provincial Legislature and the Municipality were notified of the intervention. The Minister approved the intervention within 28 days as prescribed by the Constitution. The NCOP has until 09 September 2019, to make a determination on the intervention.

 

20.2      The high number of potholes, neglect of refuse collection, poor maintenance of street lighting, ageing road infrastructure in the Municipality, was a reflection of poorly managed budgets as well as staff and skills shortages, and clearly negatively impacts on the infrastructure condition. The long-term consequence includes, asset stripping and lower service levels that in all likelihood also negatively affect the sustainability and economic investment, and raises the likelihood of service delivery protests.

 

20.3      The Select Committee observed that the Municipality was provided with financial support of R6 million for the electrification in Ward 8 (Mfekayi), and R5 million for the electrification in Wards 8 and 12. The Municipality was provided with hands-on support in the process of developing a credible general valuation-roll, despite this support all the recommendations from CoGTA were not implemented. Further, the Municipality was provided with hands-on support in the appointment of all its current senior managers. The Municipality has also been supported in the appointment of the current Acting Director: Technical Services.

 

20.4      It has been observed that some of the problems facing the Mtubatuba Local Municipality could be a thing of the past if the councillors and political parties, work together to prioritise service delivery, instead of working against each other. It should be remembered that councillors are elected to represent local communities on municipal councils, to ensure that municipalities have structured mechanisms of accountability to local communities, and to meet the priority needs of communities by providing services equitably, effectively and sustainably within the means of the Municipality.

 

20.5      The intervention approach and outcomes must give effect to the spirit of cooperative governance and intergovernmental relations, as well as sustainability measures beyond the intervention. It was observed that the position of the Chief Financial Officer (CFO) remains vacant. The Municipal Council appointed an Acting CFO. Further, the Municipal Manager resigned in July 2019, therefore, the position of the Municipal Manager (MM) was also vacant. Consequently, the Municipality will rely on acting appointments. The absence of the full time MM and the CFO might result in relentless delays in the implementation of the intervention recovery plan.

20.6      The Select Committee is of the opinion that the ultimate exit strategy in the Municipality will have to address the change management imperatives, report all cases of corruption to law enforcement agencies, implement governance systems and procedures, skills transfer, capability of the Municipality to function effectively, implementation of remedial action plans dealing with negative findings from the Auditor-General and institutionalising new standard operating procedures.

 

21.        Recommendations of the Select Committee

 

21.1      Having conducted the oversight visit to Mtubatuba Local Municipality, the Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements recommends as follows:   

 

21.1.1 The NCOP approves the intervention in Mtubatuba Local Municipality in terms of section 139(1)(b) of the Constitution.

 

21.1.2   The Administrator should fast-tract the process of appointing and filling of section 57 Managers, in particular the Municipal Manager and the Chief Financial Officer. The absence in filling these positions might result in relentless delays in the implementation of the intervention recovery plan, and the facilitation of skills transfer.

 

21.1.3   Quarterly progress reports should be tabled to the NCOP and the KwaZulu-Natal Provincial Legislature by the MEC for CoGTA in KwaZulu-Natal, on the implementation of the intervention in the Municipality. These quarterly reports will play an important role in assisting the NCOP review process, and in deciding whether or not the continuation of the intervention is necessary.

 

21.1.4   The KwaZulu-Natal MEC for CoGTA should table the report on the termination of the intervention in terms of section 139(1)(b) of the Constitution, to the NCOP and the KwaZulu-Natal Provincial Legislature.

    

21.1.5   The Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements, in co-operation with the relevant Portfolio Committee in KwaZulu-Natal Provincial Legislature, should after the termination of the intervention, conduct a follow-up oversight visit to the Municipality in order to evaluate the impact of the intervention in accordance with the terms of reference of the Administrator.

 

Report to be considered.