1. REPRESENTATION TEAM Mr LJ Mahlangu Chairperson: Municipal Demarcation Board Ms N Gwayi Deputy Chairperson: Municipal Demarcation Board Mr SM Radebe Chairperson: Audit & Risk Committee Ms MI Mathatho Acting CEO: Municipal Demarcation Board Ms Mahlangu Acting Chief Financial Officer 1 STRATEGIC PLAN AND BUDGET 2012 to 2015 MUNICIPAL DEMARCATION BOARD BRIEFING TO THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS 28 FEBRUARY 2012

2. OUTLINE Introduction Recap from Last Briefing Progress and Status on Key Actions Mandate of the MDB Work Programme of MDB Key outcomes of previous Demarcation Timeframe for the Current Boundary review process Types of Municipal Boundary Redetermination Strategic Focus Areas for 2012 to 2015 Key Results Areas Critical Assumptions, Risks and Mitigations Enhanced Organisational Processes and Structure Budget and Summary Concluding Remarks 2

3. The Board Current Board is the third since the establishment of the institution. Term of Office for the Board is five years. 10 Members appointed: Only Chairperson Full Time. One has since resigned: 1. Mr Landiwe Mahlangu - Chairperson: Municipal Demarcation Board 2. Ms Nondumiso Gwayi - Deputy Chairperson: Municipal Demarcation Board 3. Prof. Nico Steytler – based in the Western Cape Province 4. Khosi Ramovha – based in the Limpopo Province 5. Mr Lebina Tsotetsi – based in the Free State Province 6. Ms Grace Castle – based in the Mpumalanga Province 7. Mr Ashraf Adam – based in the Western Cape Province 8. Ms Wendy Ovens – based in the Gauteng Province 9. Ms Lynelle John – based in the Gauteng Province 3

4. RECAP FROM PREVIOUS BRIEFINGS ● Portfolio Committee Strategic Planning: 30 November 2011  Provided an update of the boundary Redetermination Process  Reported the outcome of Municipal Visits as per Circular 1/2011  Some 60 Additional requests of which 18 were new cases  Municipal Responses on Technical Redetermination  Trends in the motivation for Boundary Changes ● Annual Report presentation: 18 OCTOBER 2012  Reported on 2010/11 Output and Developments  Financial Results for 2010/11  Other Matters including Capacity Assessment ;research and studies of the Board 4

5. Progress and Status Aug to Dec 2011 – visited all affected municipalities at metro district level, and other stakeholders to consult on 558 proposed technical changes, received new submissions; Extended deadlines for submission to 20 January 2012 By closing date some 200 additional requests for boundary changes received which vary in complexity Continued to receive representations from individual stakeholders requests for dedicated meetings Visited and addressed all Provincial Houses of Traditional Leaders and one local house Met with the Minister of Cooperative Governance and Traditional Affairs 5

6. Progress and Status Currently new requests are being analysed, mapped, and QA – to be completed by April 2012 A Database of redetermination is being developed May/June 2012 we will commence with second round of visits to municipalities to consult on new requests. MDB has commissioned a legal opinion to deal with legally contentious and complex submissions Significant Progress in Revised Capacity Assessment Model MDB is applying some recommendations of the studies it recommended 6

7. MANDATE OF MDB Vision, Mission and Values 1. VISION  The Board’s vision is the full realization of Constitutional and local democracy in South Africa characterized by functional and viable municipalities, spatially configured so that its boundaries and wards covers the whole territory of the Republic, including productive and inclusive metropolitan municipalities, sufficiently and optimally capacitated district and local municipalities which are supported by sound local government system 2. MISSION  To perform its functions and to exercise its powers in such a manner so as to empower municipalities to fulfil their constitutional obligations, primarily the provision of democratic and accountable local government, and effective, efficient and sustainable service delivery within sound boundaries. 3. VALUES  Accountability  Dedication  Effectiveness  Impartiality  Integrity  Professionalism 7

8. The Board presents to this Committee, the Strategic Plan for the MTEF period 2012-15, with a specific focus on the financial year 2012/13. The Strategic Plan will be tabled in Parliament on the 07 th March 2012 The Plan and our priorities are informed by the legislative mandate and the medium to long-term planning process. 8 PURPOSE OF SUBMISSION

9. Mandate: Legislative Framework Municipal Demarcation Act, 1998 – Section 3 & 4 The Board is a juristic person, is independent and must be impartial and must perform its functions without fear, favour or prejudice The Board must determine municipal boundaries in accordance with this Act and other appropriate legislation It must render an advisory service in respect of matters provided for in this act and other appropriate legislation. 9

10. Mandate (continued) Municipal Structures Act, 1998 The Board must delimit wards in compliance with Schedule 1 to the Act. Section 85 – The Board must consider the capacity of district and local municipalities to perform their function and to exercise their powers and provide advice to MEC’s responsible for Local Government. Section 6 empowers the Board to declare District management areas and to withdraw such declarations. 10

11. Mandate of MDB: Criteria Municipal Demarcation Act: outline the general criteria for demarcation objectives and factors to be taken into account. Municipal structures Act: outline the criteria and requirements for metro’s. Municipal structure Acts: outline the criteria for ward delimitation. 11

12. Work programme in respect of municipal and ward boundaries MDB follows two broad cycles between local elections. Immediate after an elections municipal boundaries are reviewed. This first cycle takes around two years. After the review of municipal boundaries wards are delimited for the next local elections. This second cycle takes around 18 months. Elections were held on 18 May 2011, and the review of municipal boundaries commenced in June 2011. The determination or re-determination of municipal boundaries, is subject to legislation. Section 155 of the Constitution requires that an independent authority must determine and re-determine municipal boundaries. The Demarcation Act, provides the procedures and criteria, and the Structures Act, prescribes certain additional matters such as the criteria for categorising metropolitan municipalities. 12

13. Focus and outcomes of the past review on municipal boundaries For the 2000 local elections the main focus was on the rationalisation of the total number of municipalities; For the 2006 local elections the focus was on dealing with disestablishment of cross boundary municipalities For the 2011 local elections the local government system was cleaned up by removing district management areas, and demarcating 2 additional metros A the current process will refine municipal boundaries for the 2016 local elections. This may include major changes in some provinces. 13

14. Broad programme for current Boundary Review process Aug 2011 – Jan 2012  Briefing of municipalities on process.  Visits municipalities to explain possible 558 technical corrections to boundaries, and to ask proposals for further boundary changes.  Closing date was 20 January 2012 Jan – March 2012  Consider inputs and map new proposals received. April - June 2012  Inform municipalities of further unfolding of process.  Visits to municipalities for further consultations. June - Aug 2012  Prepare for the legal process.  Publish all section 26 notices to invite views and representation on cases that will be taken forward. Aug /Sept 2012  Closing date for the submission of written views and representations in terms of Section 26. Sept 2012  Analyses of section 26 inputs, and review of maps. Sept – Oct 2012  Determine need for formal public hearings, and further investigations, and public notices in this regard. Nov – Dec 2012  Formal section 28 public hearings, where necessary.  Publish section 21 notices for objections. February 2012  Closing date for section 21 objections. Jan - March 2013  Considers objections and decides which boundary changes should be confirmed, varied or withdrawn. April - May 2013  Publish board decisions in terms of Section 21(5). 14

15. Broad provisional programme (cont) June – Oct 2013  IEC and MECs gazette Section 23 notices. Nov/Dec 2013 Strategic planning and strategic guidance from Board on the ward delimitation process. Jan/Feb 2014Formula and number of councillors gazetted. Feb 2014New Board appointed. March 2014 MDB commence with ward delimitation. New Board to decide on the process. June 2015Hand over of final ward boundaries to the IEC. July - April 2015IEC prepares for the 2016 local elections. May 2016Local elections. 15

16. Types of re-determination Type A - Technical and minor boundary re-determinations: This re- determination entails a small scale boundary adjustment and/or alignment with a minor impact on the geographic area, and with a negligible or no impact on the number of voters, and on the capacity of the affected municipalities. The outcome of this redetermination is the correction and/or alignment of a municipal boundary with physical or natural features such as roads, rivers, and mountains; or cadastral boundaries (parent farm boundaries) or a combination of the two. Alignment to cadastre may be necessary where, for purposes of property valuations and rates, a property has to be under the jurisdiction of one municipality rather than being split between two or more municipal areas. Type B – Consolidation and Annexations: This is a medium scale boundary re- determination that may impact on a sizable geographic area, and number of voters in one or all the municipalities affected. This type of determination may impact on ward arrangements but will not, or will not materially, impact on the capacities of the affected municipalities to deliver services. The outcome of this type of boundary adjustment is the correction of boundary anomalies that affect service delivery, and to promote integrated communities and economies. 16

17. Types of re-determination Type C – Amalgamation and Categorisation: This type of re-determination entails a major and large scale municipal boundary re-determination which will have a significant impact on the geographic areas, the number of voters, and the capacities of the affected municipalities. The outcome of this type of re- determination includes the merging of adjacent municipalities; the splitting of municipal areas to create municipal areas which will result in that the responsible MEC will need to disestablish an existing municipality or municipalities, and establish a new municipality or municipalities. Also included in this type is the categorisation of metropolitan municipalities with or without boundary changes. This type of request requires extensive motivation and a significant amount of supporting evidence. Where a request is submitted for the categorisation of a municipality into a metropolitan municipality, such a request must satisfy the criteria outlined in Section 2 of the Local Government: Municipal Structures Act, 1998, in addition to the criteria set out in section 24 and 25 of the Local Government: Municipal Demarcation Act, 1998. Attention is also drawn to the fact that the MDB may determine that an area must have a category A (metropolitan) municipality, only after consultation with the National Minister responsible for local government, the MEC for local government in the provinces concerned, and SALGA. 17

18. Forms as per Circular 2/2011 Form C1 - This form needed to be completed where stakeholders rejected/disagreed with the proposed boundary change(s) set out in Circular 1/2012. Form C2 - This form needed to be completed where stakeholders agreed to/supported the proposed boundary change(s) set out in Circular 1/2012. Form D - This form needed to be completed when a request for the re-determination of a municipal boundary was submitted to the MDB, and also contained an elaborate framework and guidelines of information required by the MDB. 18

19. 19 Capacity Assessment 2011: Process

20. 2011 Primary data collection approach Web-based tool Self-administered, user-friendly and simpler Fewer questions than before MM to sign off as Chief Accounting Officer Support to municipalities through Computer Assisted Telephone Interviews (CATI) - TNS PDG contact info and TNS email address set up Provinces – ‘provincial champions’ support to municipalities Process of data verification Municipal report sent to each municipality One-month verification period Final sign-off on data 20

21. Qualitative assessment This is a deeper qualitative investigation into powers and functions in all municipalities within a five year period This year will pilot this methodology Nine districts (roughly 20% of all municipalities) will be selected Investigation process will culminate in an analytical report for each district family of municipalities focusing on functions identified, mainly Roads Solid Waste Fire Services 21

22. National Completion Status as at 22 February 2012 ProvinceMunicipalities not yet engaged with the process Total No Free StateMohokare LM, Naledi LM, Masilonyana LM, Tokologo LM, Nala LM, Nketoane LM, Phumelela, Moqhaka LM, Ngwathe LM 9 KwaZulu-Natal -0 Mpumalanga -0 Northern CapeThembelihle LM, Siyancuma LM, Kai! Garieb LM, //Khara Hais LM, !Kheis LM 5 Western CapeBitou LM, Prince Albert LM2 Eastern CapeGreat Kei LM, Nkonkobe LM, Tsolwane LM, Inkwanca LM, OR Tambo DM 5 North WestKagisano / Molopo LM1 Gauteng -0 22

23. STRATEGIC FOCUS 2012 TO 2015 Ongoing review of municipal boundaries Ongoing assessment of municipal capacity Re-organisation of the institutional administrative structures Enhancement of stakeholder relations and communication Enhancement of operations through national and international studies Maintenance and improvement of governance structures Ongoing compliance with relevant legislative and regulatory requirements Source extra funding from National Treasury 23

24. KEY RESULT AREAS STRATEGIC OBJECTIVES AND OUTPUTS 24

25. SUMMARY OF 2012/13 PRIORITIES Key five (5) focus areasDeliverables/ OutcomeTimelines Review of municipal boundaries Report on reviewed municipal boundaries December 2013 Re-organisation of the institutional administrative structures Approved organisational structure, migration of existing staff to the new structure, appointment of key positions, improved organisational processes April 2012 to September 2012 Enhancement of stakeholder relations communications Improved consultative process with stakeholders April 2012 to March 2013 Source funding from National Treasury Increased fundingApril 2012 to March 2013 Ongoing assessment of municipal capacity Reports on capacity assessments available to stakeholders April 2012 to March 2013 25

26. CRITICAL ASSUMPTIONS  Sufficient legislative, regulatory and govt policy positions exist to support efforts of the Board.  The funding increases beyond current funding.  Stakeholders are willing and able to participate in the Board’s activities and engagement.  Human resources exists to support the Board’s strategic mandate. 26

27. RISKS AND ACTIONS TO MITIGATE RISKS Two main risks Inadequate human resources leading to non- achievement of organisational objectives Lack of stakeholder management/public relations leading to low profile of MDB Mandate of the Board not being understood by stakeholders Actions to mitigate risks Approved organisational structure in place Appointment of stakeholder management specialist 27

28. ENHANCED ORGANISATIONAL CAPACITY FOR THE PERIOD AHEAD 28

29. PRESENTATION LED BY: Ms Matankiso Mahlangu (Acting CFO of the Board) 29

30. MDB SUMMARY BUDGET 30 2011/12 R’000 2012/13 R’000 2013/14 R’000 2014/15 R’000 INCOME39 33940 85943 08645 652 Government grant38 48240 36242 57845 133 Other income857497508519

31. MDB SUMMARY BUDGET 2011/12 R’000 2012/13 R’000 2013/14 R’000 2014/15 R’000 EXPENDITURE39 33940 85943 08645 652 Administrative and operating expenses 20 72419 52120 96922 405 Employee cost12 38417 19918 87220 713 Audit fees1 9661 5471 7021 871 Project expenses 4 2652 592 1 543663 31

32. SAVINGS AND COST CUTTING Unfunded position would not be filled Largely use as far as possible means of communication, dissemination e.g. electronic business cards, dedicated websites etc Limited use of consultants Investigate cost effective ways to communicate Board decisions and redeterminations Reduction of meeting held outside the office Maintains current low usage of telephone 32

33. EXPENDITURE ESTIMATES PER PROGRAMME 2012/13 R’000 2013/14 R’000 2014/15 R’000 Operations and Research 14 84015 36015 254 Financial Management and Accounting 6 2446 8167 444 Corporate Services 19 77520 91022 954 TOTAL40 85943 08645 652 33

34. CLOSING REMARKS BY CHAIRPERSON Issues the Board would like to place on the agenda of Portfolio Committee. Reviewing and updating legislation on demarcation Provincial Boundary matters. Timeframes on the determination of formulae for no of councilors for the purpose of ward delimitations. Eligibility criteria for Board Members. Capacitating of Municipal Demarcation Board. 34

35. Questions and Comments 35