BRIEFING OF THE PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT: THE 2003/04 ANNUAL REPORT Municipal Demarcation Board 11 October 2004 R H Monare (Manager: MDB) R M Somanje (CFO)

Presentation: Overview The Board Vision, Mandate and Mission Operational Structure and Staffing Programmes and Projects Strategic Context 2004/05 onwards Financial Results and Issues

The Municipal Demarcation Board Established in terms of Local Government: Municipal Demarcation Act, 1998. Independent from Government. 9 Members: Only Chairperson Full Time. Core Functions Determination/re-determination of municipal boundaries Delimitation of wards Assessment of the capacity of municipalities to perform their functions.

The Municipal Demarcation Board Name Province in which Resident Roles as Board Member Dr Vuyo Mlokoti Eastern Cape Chairperson: MDB (Full Time); Chair: Executive Committee; Member: All Board Committees Ms Essy Letsoalo Limpopo Deputy Chairperson: MDB Chair: Corporate Services Committee Member: Executive Committee. Dr Michael Sutcliffe Kwa-Zulu/Natal Chair: Boundaries Committee; Member: Executive Committee; Member: Powers and Functions Committee Prof Nico Steytler Western Cape Chair: Powers and Functions Committee; Member: Boundaries Committee Khosi Tshililo Ramovha Member: Corporate Services Committee; Member: Audit Committee; Member: Boundaries Committee. Ms Modiehi Molebatsi Gauteng Mr Landiwe Mahlangu Member: Powers and Functions Committee. Ms Nondumiso Gwayi Mr Mpho Mogale Northern Cape

Vision Mandate and Mission Mandate derives from the Constitution and the Demarcation Act. General Power to do all that is necessary or expedient to perform its functions effectively. Vision to contribute to Constitutional democracy through the spatial re-organisation of the whole territory of SA. Mission to perform its functions and exercise its powers in such a manner as to empower municipalities

Operational Structure and Staffing Staff Establishment comprises a total of 28 positions; Only 24 filled, and the rest frozen to save costs; Management: Manager (CE & AO) and 4 Cluster Heads; Cluster Heads responsible for: Administration and HR Management; Finance and Procurement Management; GIS and Data Administration; Research & Implementation. 75% Black; 33% Female; 4% Disabled.

Programmes and Projects The following programmes and projects were covered during the period under review: Ongoing Boundary Re-determinations; Ongoing Technical Corrections of Municipal Boundaries; Preparations for Ward Delimitations; Investigation into Metropolitan Municipalities; Investigation into Cross Boundary Municipalities (commissioned by the dplg); Consultation on and Implementation of the report on the future of DMA’s; Annual Municipal Capacity Assessments; Investigation of poorly performing municipalities.

Boundary Re-determinations As at 31 March 2004, we had 128 cases at different stages of the re-determinations process: ACTIVITY NUMBER OF CASES INVOLVED Section 26 Process 2 Section 21 Process 10 Section 21 process where proviso was applied Further investigations on section 21 and 26 8 Section 23 notices published by the IEC 23 Section 23 notices published by the MEC’s 12 Cross-Boundary Cases referred to provincial legislatures Re-determinations being investigated 63 TOTAL 128

Technical Corrections 737 Cases identified for correction of which 301 were already in the legal process; Advanced technology used to improve municipal boundaries; Re-determinations technical in nature and aimed at correcting existing maps; Initial approach of the Board was to get affected; municipalities to concur, thus eliminating the need for a section 26 process;

Technical Corrections However there has been a poor response from provinces and municipalities; Board therefore decided to embark, where possible and with the understanding that ward delimitation may not be adversely affected, on a full demarcation process, beginning with section 26, during the 2004/05 financial year; Board therefore geared itself up to: Finalise urgent cases and cases that will not adversely affect the ward delimitation process; Do preparatory work on those that will adversely affect the ward delimitation process, and which will therefore be finalised only after the local elections.

Investigation into Metropolitan Municipalities Board investigated the need to demarcate further metropolitan areas in South Africa; Data collected on all major conurbations in the country and analysed; Draft report circulated to all the major conurbations in January 2003 for comments; Decision taken in November 2003 not to take any decisions on further metros before discussing and agreeing upon a policy position with Minister; Ward Delimitation thus prioritised over the metro issue.

Investigation into Cross Boundary Municipalities Board contracted by the DPLG to prepare a report for the Department; Report would show options as to how provincial boundaries could be adjusted to dispose of cross boundary municipalities; Report compiled and submitted to the Minister in July 2003.

District Management Areas A study was completed on the future of DMA’s, as part of the Board’s policy review process; Consultation with stakeholders on the contents of the report initiated; Policy position adopted by the Board;

Municipal Capacity Assessments The Board does capacity assessments annually in compliance with the Structures Act; Focus on assisting the MEC’s to adjust municipal powers and functions between district and local municipalities; Data obtained used to prepare 47 districts reports, 9 provincial reports and an overall national report on municipal capacity;

Poorly performing Municipalities From the municipal capacity assessments some municipalities identified as performing poorly and as possible non-viable municipalities; Identification based on demonstrated capacity and number of functions performed; Apart from performance of functions, other factors contribute to the poor performance of municipalities, such as: The economic and social spatial realities in the country; Lack of economic base and poor institutional capacity in large areas both geographically and in population terms, for historical reasons; Inadequate attention given to the municipalities by national and provincial departments in terms of capacity building.

Strategic Context: 2004/05 Onwards Focus for the Board during the 2004/05 on the delimitation of wards for the 2005/06 local elections; Planning commenced in the 2003/04 financial year; Plan made provision for Four Phases

Phases, Timeframes and Process 20 Feb 2004 Finalise outer boundaries of municipalities for the division of the voters’ roll into municipal segments - IEC Divide the national common voters roll into municipal segments - IEC 22 April 2004 Publish formula for the number of councillors - Minister. May-Sept 2004 Publish number of councillors - MECs. Phase 2 June - Dec 2004 Public consultation process including public hearings - MDB Phase 3 Jan – Apr 2005 Gazette wards for objections, finalise ward boundaries and hand over to IEC for electoral process - MDB Phase 4 Apr – Dec 2005 Electoral process - IEC

Progress: Phase 1 MDB planned to commence with ward delimitation process in February 2004; Process delayed as a result of national and provincial elections, and delays in determining the formula and the number of councillors; Phase 1 has almost been completed; Some sec 23 notices (MECs) and concurrence of some provincial legislatures for CBM boundaries are still outstanding; National legislation to authorise CBM boundary changes, still to go through Parliament One or two corrections to be made to number of councillors and number of wards (Amendment of MEC sec 18(3) notice).

Progress: Phase 2 ACTION MP FS WC GT NW EC NC KZN LIM Circular 1: informed municipalities of legal framework/provisional timeframes 23/2 MEC published number of councillors 14/5 11/6 8/6 9/6 15/6 23/7 4/8 13/8 7/9 Circular 2: to ensure public participation 13/5 Circular 3: Distribute first set of ward boundaries to municipalities/ provinces for comments/alternative proposals 2/6 7/6 22/7 2/8 5/8 19/8 13/9

Progress: Phase 2 ACTION MP FS WC GT NW EC NC KZN LIM Public invited through the media to comment/send alternative proposals 3/6 8/6 17/7 26/7 3/8 6/8 20/8 14/9 Consideration of public submissions and prepare wards set 2 – Delimitation Committees 30-31/8 1-2/9 13-14/9 6-7/9 8-9/9 22-23/9 15/9 27-28/9 13-14/10 Circular 4 – request municipalities to host public hearings 23/8

Progress: Phase 2 ACTION MP FS WC GT NW EC NC KZN LIM Circular 5 – Distribution of wards set 2 for further comments, and requested municipalities to consult communities prior to public hearings to reach local consensus on proposals. 6/8 (DC32) 20/9 (other) 23/9 4/10 28/9 1/10  

Progress: Phase 2 ACTION MP FS WC GT NW EC NC KZN LIM Circular 6 – invite all stakeholders to participate in public hearings 6/9 Circular 7 – Dates and venues for public hearings confirmed, municipalities requested to assist in advertising public hearings 1/10

Phase 2: Outstanding Closing date for public submission from Limpopo – 8 October 2004 Release of map set 2 for KZN and EC – 11- 14 October 2004 Meeting of Limpopo Delimitation Committee to consider public submission and prepare ward set 1 – 18 & 19 October 2004 Release of Limpopo map set 2 – 22 October 2004 Public hearings – 25 October to 26 November 2004 Closing date for submission on ward set 3 – 30 November 2004 Possible additional hearings – December 2004 Accommodate public hearing inputs in third set of boundaries – December 2004/January 2005

How will public hearings work MDB has established 5 delimitation committees comprising of Board members (Chairs), MDB officials, and representatives of provinces & DPLG. IEC will send an observer; One hearing will be held in each metro and each distict area (for the local municipalities within the district area); The second set of ward boundaries for all provinces will, as far as possible, be made public before the hearings; At the hearing the Chair will give an overview of the legal framework and the rules for public hearing; Delegates will then be allowed to discuss, if necessary, each ward in each municipality earmarked for that particular hearing; Persons wishing to participate in the hearing are encouraged to also make their submission in writing available to the MDB; Contributions by persons who wish to make written submissions, without attending the hearing, will also be welcomed (before 30 November 2004).

Phase 3 From January to April 2005 the following is envisaged: The 3rd set of ward boundaries will be published in Provincial Gazettes for objections; The Board will consider all objections and prepare a 4th set of ward boundaries; The 4th set of ward boundaries will be handed to the IEC for the electoral process.

Municipal Capacity Assessments: Programme for 2004/05 Plans were devised to commence capacity assessments in 2004/05 earlier to allow for the reports to feed into the municipal budgeting cycles: August 2004: Distribute questionnaire to municipalities and complete field trips and data collection. September 2004: Finalise data capturing and verify the profiles of municipalities based on information in the questionnaires; October 2004: Drafting of DC reports; November 2004: Complete the drafting of district reports. First draft of the MDB is sent to MEC’s;

Municipal Capacity Assessments: Programme for 2004/05 December 2004: MEC’s publish the adjustments so that there is certainty at local level for the municipalities when they review their IDP’s and when they prepare their budgets for the new financial year; January 2005: Provincial overview reports are prepared and made available to MEC’s; February 2005: National Overview draft report is available; March 2005: National Overview report is made available to the Minister, MEC’s and Portfolio Committee.

Financial Results and Issues For the year 2003/04 we had a total of R17,531,402. The amount made up as follows: MTEF Allocation 14,311,000 Donor Funding (Norwegian & Danish) 3,165,469 Revenue from Sale of Maps 54,933

Financial Results and Issues At 31 March 2004, we still had R4,468,727 in out bank account; A substantial part of the balance (R4,037,227) was the Danish funding which was still to be spent on specific projects in the 2004/05 financial year, in terms of the agreement with the donors. R297,115 was the Norwegian Funding which was still to be spent on specific projects in the 2004/05 financial year, in terms of the agreement with the donors.

Financial Results and Issues The rest was fully committed as follows: Office Alterations 110,000 Alterations approved and commenced in the period under review, but flowing into the next period Printing & Stationery 24,385 Purchased during the year but paid for after year end. TOTAL 134,385

Financial Results and Issues The Board has received an unqualified audit for the year under review; However, without qualifying his audit opinion, the Auditor-General has drawn attention to matters with respect to: Financial Management; Late Submission of annual financial statements; Donor Funding; Going Concern.

Financial Results and Issues: 2004/05 Board allocated an MTEF amount of R17,023,000 for the 2004/05 financial year; Allocation not adequate, in view of the ward delimitation process; At the current rate of spending, the total allocation will have been totally spent by end of November 2004 – with 4 months still to go in the financial year; A request for additional funding for the Board through the appropriation funding process has been made, to ensure that the Board can carry out its functions effectively for the rest of the financial year.

Thank you