1 BRIEFING TO THE SELECT COMMITTEE MUNICIPAL SYSTEMS AMENDMENT BILL 22 SEPTEMBER 2003

2 OVERVIEW OF THE AMENDMENTS Change definitions New provisions regarding assignment of function and powers to municipalities Improved access to information Submission of annual performance reports by municipalities External mechanisms for service delivery Limiting municipal entities and establishing governing arrangements

3 AMENDED SECTIONS Ω Table of Contents (exclusions and additions) Ω Assignment of functions and powers to municipalities by Acts of Parliament or Provincial Acts (sec 9) Ω Assignment of functions and powers to specific municipalities by acts of executive or by agreements (sec10) Ω Funding and capacity building (sec 10A) Ω Public access to information (sec 21A) Ω official website (sec 21B)

4 EXTERNAL MECHANISMS Ω External Mechanism Ω New chapter 8A Municipal Entities Part 1 General provisions (kinds of entities) Part2 Private companies Part 3 Service utilities Part 4 Multi-jurisdictional service utilities Part 5 Duties and responsibilities of parent municipalities Part 6 Governance of municipal entities Part 7 General New clause Transitional provisions

5 ASSIGNMENT FRAMEWORK (SEC 9) ΩAssignment of functions and powers by act of parliament or provincial Act Process (within reasonable period request draft Act providing for the assignment) (i)Assessment by FFC of financial & fiscal implications of the legislation (ii)Future division of revenue between the spheres (iii)Fiscal power, capacity and efficiency of municipalities Consult the Min, Min of Finance and SALGA (MEC for local govt.) Outline implications of assignment for the municipality(ies)

6 ASSIGNMENT FRAMEWORK (SEC 10) ΩAssignment of function or power to the municipality by acts of executive or by agreement (i.t.o S99 or 126 of constitution ) Before signing Memo to Min and NT 3yr proj of financial implications Disclosure of any possible fin liabilities or risks after 3yrs Funding of additional expenditure ᾨ Funding and capacity building The Cabinet members, MEC or organ of state assigning F or P should ensure sufficient funding and capacity for the municipality to ensure sustainability

7 ACCESS TO INFORMATION SECT 21A ΩDocuments to be made public Display at all municipal and satellite offices Display on the Website Notify community of the place and address Request written comments from communities ᾨ Official website Establish Website if affordable if not place on the organized local govt. website sponsored by NT MM to maintain and regularly update website

8 ANNUAL PERFORMANCE REPORTS( SEC 46 ) Ὤ Annual performance reports Each financial year municipalities to prepare an annual performance report outlining Performance of municipality and external service providers Compare performances of the internal and external mechanisms Annual performance report to be part of Annual report Measures taken to improve performance

9 PERFORMANCE AGREEMENT SEC 57 ΩMFMA – responsibilities on accounting officer of the Municipality to be part of the Performance agreement Ω Bonuses awarded to MM and managers directly accountable to him after the end of financial year after evaluation of performance by the council

10 EXTERNAL MECHANISMS (SEC 78) Ωuse of external mechanisms (SDA & Governance)  Feasibility study Consultation (Community, organized labour) Identification of service Timeframes Outputs Value for money Needs of the poor Impact Capacity of municipality to monitor Ω National and provinces to assist municipalities !

11 SERVICE DELIVERY AGREEMENTS SECT 80 ΩProvision of services through SDA with external mechanisms including, another municipality national and provincial organs of state Commission and take into account the recommendations of the feasibility study Community consultative process Exemptions from part 3 (competitive bidding) Any person or entity juristic or otherwise, not mentioned above will be subjected to part three of the Act Provide dispute settlement mechanism

12 MUNICIPAL ENTITIES ΩThree kinds are permitted Private company Service utility Multi-jurisdictional service utility Ω Interest ownership May hold interest only in the above or Investments in the stock exchange as per MFMA

13 PRIVATE COMPANIES ΩEstablishment and share ownership Enhance service delivery Address the needs of community Provide sound business practice ΩJoint ownership Decide on share ownership Funding arrangements (3yr cash flow projection) ΩDisposal Dissolve in terms of companies Act

14 SERVICE UTILITY ΩCreated by a by-law ΩConditions Restricted to providing service for which it was created Est. of a board Appointment, recall of directors Procedure for the board acquisition of goods and services App of staff Governance arrangements

15 MULTI-JURISDICTIONAL ΩEst. by a by-law ΩConditions Restrict its activities to the purpose for which it is established Governance arrangements Reporting implementation arrangements Amendment of agreement Request for info by any parent municipality Performance management z

16 PERFORMANCE OF ENTITIES zIn respect of municipal entity is measured against agreed objectives ΩMunicipalities exercise the rights and powers ΩMonitoring and annual review( annual budget) ΩProcedures for dispute resolution consequences for withdrawal from entity ΩProcedures for termination of entity Ωdisestablishment based on performance

17 DISESTABLISHMENT ΩFollows annual performance review and unsatisfactory performance ΩSerious financial problems (lack of financial recovery plan) ΩTermination of SDA

18 REPRESENTATION IN ENTITIES ΩCouncilor or official or both (acts on instructions of council) ΩNon-participating observer in the board ΩAttends shareholding meetings and exercise the shareowners right to vote ΩOfficial communication to council responsibility of the board ΩCouncil of parent municipality determines reporting responsibilities

19 EXCLUSIONS FROM THE BOARD ΩCouncilor of any municipality ΩMember of National Assembly or Provincial Legislature ΩPermanent delegate of the NCOP ΩOfficial of any parent municipality ΩConvicted of any offence ΩDeclared by courts to be of unsound mind ΩUn-rehabilitated insolvent

20 CODE OF CONDUCT ΩContained in schedule 1 ΩBreaches of code Board est. a special committee to investigate breaches by directors Make recommendations to the board Formal disciplinary procedures followed Board informs parent municipality of disciplinary action taken

21 CODE OF CONDUCT (cont.) ΩCode of conduct for municipal staff in schedule 2 also applies to staff of the entity ΩBreach of this code is ground for dismissal ΩDisciplinary action Suspension Appropriate fine Demotion Transfer Reduction in salary

22 TRANSITIONAL PROVISION Ω Retain the status quo and align to the new Act Ω Provides conversion framework to new entities Ω For the purpose of this Act these will be considered municipal entities ΩMunicipalities are required to publish a list of all entities in a provincial gazette

23 CONCLUSION zAmendments provides more certainty and predictability zTighten the provisions in the MSA while allowing flexibility zEnsure transparency zPromote efficiency in service delivery zWill ensure capacity of municipalities

24 THANK YOU