1. VIABILITY OF, AND INTERVENTIONS INTO MUNICIPALITIES
Catholic Bishops’ Conference
Cape Town
4 September 2015
18 July 2019
" A Place of Excellence"

2. Contents Viability Demarcation objectives and factors Demarcation 2016
2019/07/18
Contents
Viability
Demarcation objectives and factors
Demarcation 2016
Interventions
18 July 2019
" A Place of Excellence"
Drakenstein Municipality - a place of excellence

3. Viability
Financial viability is the ability to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow for growth, while maintaining service levels – National Regulatory System for Community Housing Guidelines, Australia (courtesy Google)
18 July 2019
" A Place of Excellence"

4. Demarcation 2016 2000 demarcation reality
Creation of municipalities in predominantly bantustan areas with negligible ability to raise taxes, levy and collect service charges
Could not meet full complement of functions (water boards, Eskom)
Dominant agricultural and mining industries that supported local economies, now in decline
Locked in space economy, faced with most negative consequences of post-apartheid global economic changes
Rate of urbanisation, structural reasons for non-performance
Original funding streams, as per constitutional division of powers cannot materialise (Eskom industrial clients)
Non-collection of rates and service charges in Eskom supply areas
Previous support programmes (DPLG, DCOG) did not lead to successful governance institutions, service delivery units
Government’s failure to establish sensible development policy contributed towards decline in governance
18 July 2019
" A Place of Excellence"

5. Demarcation 2016 Current reality
Bold decision to reconfigure low scoring municipalities
Scale and pace of solutions worrying
Danger of creating similar problems, on grander scale
Reconfigurations must meet governance and service delivery objectives, avoid 2000 mistakes
18 July 2019
" A Place of Excellence"

6. Demarcation 2016 Amalgamation of low scoring municipalities
Reasons for low scoring needs to be understood
Assumption that mechanism can be put in place in relatively short time to provide services but
Merging administrations
Remuneration parity
Retrenchments
Asset register compilation
Short- and long term debt
Scale and type of services required
Funding of continuing O&M costs where no secure cash flow
Transitional arrangements
Budget provision by NT for 15/16, 16/17 and beyond
Need to re-examine powers and functions research done over the years
Examine service delivery mechanisms
Develop policy framework
18 July 2019
" A Place of Excellence"

7. Interventions
Currently unregulated, number of interventions threat to institutional integrity of LG
Constitutional, legislative framework assume service delivery or procedural failures
Actual failures
Governance failures relating to political in-fighting, mismanagement, political-administrative conflict, unbridled corruption
Financial mismanagement related to above
Successful interventions few and far between
Mnquma, case of chronic (contested) intervention
Msunduzi, successful within 2 year period
18 July 2019
" A Place of Excellence"

8. Interventions What makes for successful intervention
At political level
At administrative level
At delivery level
Provincial capacity to monitor, support and supervise
Three principles to underlie interventions
Measure of last resort
Respect for institutional integrity, intervention as opposed to interference
Aim to restore, not punish
18 July 2019
" A Place of Excellence"

9. THANK YOU
18 July 2019
" A Place of Excellence"