1. DIVISION OF POWERS AND FUNCTIONS Ministerial Authorisations and Revocations PRESENTATION TO PORTFOLIO COMMITEE 29TH October 2002

2. INTRODUCTION
Entering the final phase of local government transformation
Demarcation process complete
Ministerial decisions on health, water, sanitation & electricity finalised
MEC powers and functions to be adjusted – process underway
Focus on implications of the division of municipal powers and functions

3. LEGISLATIVE BACKGROUND
Municipal Structures Act Section 83 - all municipalities have the Powers and Functions assigned to them i.t.o. S156 and S229 of the Constitution
S84(1) - lists the P and F of district municipalities
S84(2) - allocates the P and F to local municipalities, except the S84(1) P and F
Minister & MECs have the responsibility to authorise or adjust municipal powers and functions
No legislation for division of fiscal powers

4. CURRENT POSITION
Status quo retained by Minister and MEC’s after the December 2000 Elections
Minimise service delivery disruptions after demarcation process
Existing MEC authorisations valid until 5 December 2002
MEC adjustments required, subject to the MDB’s assessment of the municipality’s capacity to perform a function
No time limit to Ministerial authorisations

5. CURRENT POSITION CONTINUED
Creates uncertainty in respect of the following:
formulation of IDPs
passing of Budgets
finalising administrative re-organisation
General powers not reconciled with Fiscal powers e.g. Equitable Share

6. PROCESS TO RESOLVE PROBLEM
An inter-departmental task team (IDTT) – DPLG, DWAF, DME, DoH, NT – together with SALGA, FFC and MDB constituted in Oct 2001
Consultation report based on district diagnostic studies complete by January 2002
Formal consultation process completed by August 2002

7. AUTHORISATION PRINCIPLES
For the entire area of the B
Permanent decisions
Water and sanitation together
Bulk and retail together
Alignment of fiscal and expenditure powers
Alignment of municipal equitable share

8. CRITERIA CONSIDERED Technical
Organisational related to long term service provision
Organisational related to authority function
Financial & administrative redistribution
Accountability
Transfer costs
Alignment of service provision
Fiscal alignment
Financial sustainability

9. OTHER KEY CONSIDERATIONS
Demarcation process and its impact on local level redistribution
Minimise loss of local revenue
Minimise transitional costs
Alignment with existing sector processes
Macro economic impact

10. DECISION: HEALTH No authorisations to B municipalities
MHS located at category C level
MHS defined as Environmental Health Services
Assignment of provincial functions
Two year transition period necessary - C municipalities will take over all MHS from July 1, 2004

11. DECISION: ELECTRICITY
Given pending restructuring of the industry, maintain the status quo
Minimise disruptions and increased transition events and costs

12. DECISION: WATER & SANITATION
Municipal Typologies
All Bs in a C are authorised
One B in a C is authorised e.g secondary cities
C retains powers and functions
Effective from 1 July 2003

13. AUTHORISATIONS: WATER & SANITATION
Eastern Cape
Bs in Western District & Buffalo City
Mpumalanga
Bs in Eastvaal, Nkangala & Ehlanzeni districts
North West
Bs in Kgalagadi, Bojanala & Southern districts

14. AUTHORISATIONS: WATER & SANITATION
Limpopo
Bs in Waterberg District & Polokwane
KwaZulu Natal
Mhlatuze, Newcastle & Msunduzi
Northern Cape, Western Cape, Gauteng & Free State
All Bs

15. IMPLICATIONS: TRANSFER OF STAFF AND ASSETS
Transfer of staff, assets, liabilities, administrative records, rights and obligations
Staff costs may increase owing to remuneration parity
Transfers to be done in terms of the Section 12 Establishment Notices
Assessment of affected staff
Administrative units set up
Conditions of service to be addressed
Physical transfer only after decisions on service delivery options

16. IMPLICATIONS: FISCAL & FINANCIAL
Division of Fiscal Powers and Functions
Alignment of expenditure and revenue raising powers
Property Taxes
RSC levies
Transfers
Equitable share allocations
Flows from conditional grants

17. IMPLICATIONS: CAPACITY BUILDING
Challenges
Expedite finalisation of establishment
Initiate Section 78 processes
Facilitate service delivery agreements
Transfer staff and assets
Develop service authority and provider capacity
Support currently available:
Masibambane programme
PIMS Centres & Nodal Delivery Teams
Project viability & management support teams
Provincial initiatives eg. MISC (GP), MSPP (EC)

18. IMPLICATIONS: IDP REVIEW
If a municipality is authorised or retains the function, then the municipality has the authority over the function
This means that the municipality is responsible for the:
Policy development, tariff setting, financial management & infrastructural development related to the function
Selecting of the service provider & managing & monitoring the contract
Preparing the sector plan for the function
Making by-laws

19. IMPLICATIONS: IDP REVIEW
The sector plan for the function will therefore be made by the authorised municipality e.g the WSDP
However, the IDP of a municipality that is not authorised ( B ), or where the function has been revoked ( C ) may still include the function in its strategic plan
For example, in the instance where a C loses the water and sanitation function – the WSDP will be the responsibility of the B, but the C may include a strategic plan for water services within its IDP

20. IMPLICATIONS: IDP REVIEW
Also broader implications for the IDP review:
The institutional plan to deal with the transfer of staff and assets
The Section 78 processes and the decision on service providers to be taken into account
Budgets to be aligned as financial flows will be affected

21. IMPLEMENTING THE DECISIONS
Cabinet approval has been given
Gazetting and promulgation
Implementation of joint communication and support strategy
Provincial workshops
District level workshops
Media: video, questions & answers booklet
Alignment with MEC powers and functions

22. THE END
THANK YOU ...