Document Sample
                  WESTERN CAPE



The process of change initiated by the implementation of the Municipal Structures Act
and Municipal Demarcation Act is very extensive and will change the face of local
government in the Province.

A very extensive set of tasks will need to be completed within tight deadlines if the
transition to the new municipalities is to proceed smoothly. At the same time, service
delivery will need to be maintained and many of the critical financial and administrative
problems local government is experiencing will need to be addressed. This will require
the concerted effort of the Provincial Government and all municipalities. If we manage
the change process well, it can have great benefits to the citizens of our towns and cities
in the form of development and better more efficient services. At the same, if the
process of transition is poorly managed, it can have disastrous consequences for local

This document outlines the key approaches towards local government transformation
that I am intending to follow over the next months and serves as a basis for initial
consultation between myself and municipalities on the major.

My immediate priority is to use my powers in terms of section 14(5) of the Act to
establish bodies at a district and local level that can advise me regarding the preparation
of section 12 notices for each of the new municipalities and do the work necessary for
building effective local government after the election.

However, a key long-term focus must always be the citizen and the service user. Our
approach to the change process must always have that in mind.

I look forward to working with all local government on this project in a spirit of co-
operation, openness and mutual respect.

Pierre Uys MEC
Minister for Local Government
Province of Western Cape

1.      Introduction
1.1     The Local Government Transition Act 209 of 1993 makes provision for a three phase transition of
        local government. The pre-interim phase is completed and the interim phase is currently in place.
        The third and final phase of local government transition is set to commence with the next local
        government elections anticipated towards the end of 2000.

1.2     The Ministry for Provincial Affairs and Constitutional Development published the White Paper on
        Local Government in March 1998 which outlined policy guidelines to give effect to the final phase
        of local government transition. A range of legislation including the Municipal Demarcation and
        Municipal Structures Acts have been passed subsequently which define key elements of the
        transformation process to the final local government dispensation. This legislation together with
        Labour Relations and Electoral Acts provides for the processes to be followed to establish new
        municipalities at the next local government election.

1.3     Provincial Ministers (MECs) responsible for local government have a key role to play in
        implementing the final phase of local government transformation. The purpose of this document is
        to explain the approach of the Minister of Local Government for the Province of Western Cape to
        the management of the transition process.

2.      Objectives for local government transformation
The local government transformation process in the Western Cape aims to achieve three key objectives:

            Unlocking opportunities for innovation – by encouraging the exploration of creative
             solutions to municipal challenges.

            Creating working municipalities – by adding value to municipal governance, services
             delivery and financial management;

            Giving effect to a new local government dispensation–                  by implementing the
             Constitutional design for developmental local government and giving effect to the legislative
             framework governing the establishment of a new municipal dispensation.

3.      Charting the Transitional Roadmap
3.1     The local government transformation programme in the Western Cape Western Cape consist of
        the following interrelated project themes (see figure 1):

Urgent Matters

a)      Formal statutory establishment process – consisting of a series of provincial legislation
        and notices to be published in the period leading up to the local government election. These
        notices will govern all matters pertaining to the establishment of new municipalities and
        disestablishment of current local authorities. Figure 2 provides an overview of the tasks and
        timeframes up to local elections.

b)      Protecting the integrity of the future municipal structures – facilitating decisions that
        must be reached between existing councils to guide the 2000/01 budgets that would ensure the
        protection of the financial and service delivery integrity of future municipalities;

Issues to be addressed within four months:

c)      Ensuring service delivery and administrative continuity                      up to and beyond the
        election. It is necessary for existing councils to plan and implement measures that would ensure a
        seamless transformation of service delivery during the period of transition;

d)      Future design – recommendations to the new councils must be developed that would assist the
        rapid implementation of new municipal structure after the election. Key organisational, financial,
        service delivery and governance issues will be addressed as part of this process.

Within the six months

e)      Designing a three-year programme for the modernisation of local government to
        ensure legislative compliance, capacity building and sound management for the future.

4.      Coordinating the transformation
4.1     Effective transition to the new municipalities at the next elections and the building of better local
        government will require high levels of co-ordination, co-operation, management and
        communication at provincial, district and local level. It is intended to create of a range of bodies at
        a district and local level to advise the provincial Minister of Local Government and to ensure that
        the work necessary too ensure a smooth establishment process is carried out effectively.

Establishment of District Transformation Forums

4.2     It is proposed that a District Transformation Forum (DTF) be established for each of the five newly
        demarcated district municipal areas in the Western Cape.

4.3   The key roles and tasks of DTFs would be to:

             Advise the Minister on matters relevant to the disestablishment and establishment of

             Circulate information to existing municipalities regarding transitional matters;

             Prepare and propose joint agreements between existing municipalities to facilitate the
              establishment of new municipal structures;

             Monitor the compliance of existing municipalities on matters affecting the future integrity of
              new municipal structures; and

             Make recommendations to facilitate the smooth initial functioning of the new municipal
              structures after the elections.

4.4   The membership         of a DTF would be determined as follows:
             The New National Party and the ANC as the major parties in all new district areas will be
              asked to nominate 1 member for each new municipality in the new districts. Thus, if a new
              district area will comprise 4 category B local municipalities and 1 category C district
              municipality, both the NNP and the ANC will be asked to nominate 5 members of the DTF.
              Each member should be a current councilor and the parties should ensure that one of their
              nominees is resident in each of the new proposed category B local municipalities;
             Minority parties can nominate one additional member for every 10% share of votes gained
              in the 1996 local elections within the jurisdiction of the DTF, provided that they enjoy
              representation in at least three Transitional Local Councils or Transitional Rural Councils
              within the area of the DTF; and
             The Minister will appoint a non-voting chairperson for each DTF.

4.5   Members of DTFs will be non-permanent and will not receive any special remuneration for their
      services. However, existing councils should reimburse members for legitimate expenses incurred
      while performing DTF duties.

4.6   DTFs would be required to meet at least monthly.

4.7   The DTFs would be encouraged to reach consensus recommendations for submission to
      the Minister. If such bodies however fail to reach consensus, then both the majority and minority
      views of members are to be submitted to the Minister for consideration.

4.8   Members of DTFs will be subject to a code of conduct broadly similar to that provided in
      schedule 7 of the Local Government Transition Act 209 of 1993.

4.9   Senior management has a key role to play in the establishment process. It is proposed that a
      technical working group comprising all the CEOs in the new district area be established under the
      auspices of each DTF to carry out the work necessary for a successful transition to the new

4.10   Existing district councils in the area of DTFs should provide a secretariat to support the activities of
       the DTF. Where more than one district council exists within a newly demarcated district
       municipality area, such as in the Wynlands/Breede River and Klein Karoo/South Cape areas, then
       such district councils should jointly resource a DTF secretariat.

Local Municipal Subcommittees
4.11   Each DTF should appoint a subcommittee for each new proposed category B local municipality in
       the new district area. All current councilors of both TLCs and TRCs in the area of the new
       proposed local municipality will be entitled to membership of the sub-committee.

District Information Meetings
4.12   A District Information Meeting comprising the mayor, the executive committee chair and the leader
       of the major opposition party for each TLC and District Council, their CEOs and 2 members from
       each TRC will be held at least every quarter to consider matters of common concern and to receive
       progress reports on the transformation process.

Joint Provincial Meetings
4.13   Joint meetings of DTFs in the Western Cape will be held from time to time to consider
       transformation matters that require a common provincial approach.

Interim management arrangements

4.14   It is also intended that a Interim Municipal Manager be appointed by the Minister for each
       new municipal structure immediately before local elections and until the appointment of new CEOs
       to ensure management continuity through the transition period. Interim Municipal Managers would
       be empowered to act as interim chief executive officer responsible for current administrations
       during their term of appointment.

Process and time frame for the establishment of DTFs
4.15   It is anticipated that DTFs will be established following the process and time-frames outlined below:
        Draft section 14(5) notice providing for the establishment of DTFs to be published for comment
             by mid-February 2000;
        Comments on the draft section 14(5) notice to reach Minister by 28 February 2000;
        Publication of section 14(5) notice by the end of 1st week of March 2000;
        Political parties to forward nominations for DTFs to Minister for approval by the 1st week of
        Facilitators to convene preparatory meeting with District CEOs to prepare for first meeting of
             DTFs by the 1st week of March 2000;
        First meeting of DTFs to take place by 2nd week of March 2000.

5.    Providing Direction: Provincial approaches
      towards key establishment tasks
Approach towards establishment notice
5.1   The Provincial Minister for Local Government must deal with a series of specific matters in terms of
      section 12 of the Municipal Structures Act.

5.2   It is the Minister’s intention to allow maximum consensus and input from local transformation
      structures in finalising matters listed for publication in terms of section 12 of the Act.

5.3   Specific matters on which rapid input are required include:

a)    The name of new municipalities –
      The Minister would prefer to receive consensus proposals from DTFs regarding the names of new
      municipalities within the framework of provincial guidelines. Given the strong feelings that the issue
      of a name could provoke, each DTF is requested to design an appropriate participatory process to
      assist them in making a recommendation on the names of the new municipalities towards the end
      of March 2000.

b)    The National Minister must determine the number of councilors in each authority according to
      a formula. It is anticipated that such a formula will be released in the latter part of February 2000.
      The Provincial Minister for Local Government has discretion to adjust the national formula by up to
      10% in larger councils and up to three members in councils that would have less than 30 members.
      The provincial Minister requires the views and inputs from local government stakeholders in the
      application of the criteria listed in section 20 (3) of the Municipal Structures Act in each of the new

c)    The provincial Minister must also determine the number of full-time councilors in each
      municipality. The Minister would ideally determine an appropriate number of full-time councilors
      based on the local needs and affordability. Inputs and views from DTFs to inform his decision on
      the number of full-time councilors for each municipality are thus required.

Allocation of Powers and Functions

5.4   The allocation of powers and functions to respective category C district and category B
      local municipalities is a very important matter in establishing new municipalities since the allocation
      of staff, as well as assets and liabilities would follow the functional division. It is absolutely critical
      to ensure that the correct allocation of powers and functions is achieved and that the actual division
      is clearly defined in terms of section 12 notices.

5.5   The allocation of powers and functions are defined in terms of section 83 and 84 of the Municipal
      Structures Act. However, there are also practical reasons and efficiency benefits that could be
      achieved by reallocating the section 83 and 84 functional division. For example, some areas are
      advanced in establishing vertically integrated electricity and water service bodies on a regional
      scale. It may be beneficial to allocate such services to a regional authority in order to ease the
      transformation process and to avoid transferring staff several times. It is important that each DTF

       consider the best allocation of powers and functions between district and local municipalities so as
       to advise the Minister appropriately.

5.6    Any changes to the allocation of powers and functions in terms of the Municipal Structures Act
       must be done according to the provisions in section 85 of the Act. If it is found that a municipality
       lacks the capacity to perform any power or duty, and in consultation with the Demarcation Board,
       then the Provincial Minister may adjust the allocation of powers and functions. In order to gather
       information on the capacity of existing municipalities the Demarcation Board is currently in the
       process of collecting information on municipal capacity. The Minister will draw on the information
       of the Demarcation Board in considering any adjustment in the allocation of powers and functions.

5.7    It is important to note that the allocation of powers and functions must be underpinned by an
       appropriate allocation of funding sources. Surpluses generated by some services are critical for
       the rendering of equitable services and sustaining cash flow within municipalities. It may therefore
       be necessary to design a financial resource sharing framework within each district that best fits the
       functional situation in that district. DTFs are also requested to give adequate consideration to the
       resource-sharing framework between district and local municipalities that would suit the needs of
       their areas.

Allocation and Transfer of Staff
5.8    The transfer of staff to the new municipalities needs to be carefully managed to ensure that there is
       no service disruption and that staff morale and productivity is maintained.

5.9    The basic principle determining the allocation of staff is that staff will follow the allocation
       of powers and functions. For example, where current district councils render local services,
       such services are likely to be allocated to new local municipalities. Staff working for the existing
       district councils in local service delivery can therefore anticipate to be allocated to the new local
       municipalities. Similarly, if the allocation of powers and duties allocate a service to new district
       municipalities, then the staff will accordingly be transferred to the new district municipality. Criteria
       will be developed in consultation with the DTFs to facilitate the allocation of staff that cannot clearly
       be allocated according to a functional division.

5.10   The likely legal mechanism according to which staff will be transferred on the Election Day would
       be in terms of section 197 of the Labour Relations Act 66 of 1995. On the Election Day staff will be
       transferred from their existing municipal employer body to a new employer body. It is important to
       emphasise that all staff will be transferred, no staff will be retrenched as a consequence of such a
       transfer and the transfer will not effect existing conditions of employment. It is important to note
       that staff must be informed of such a transfer but that a transfer in terms of section 197 does not
       require a collective agreement.

5.11   It is important to note the transfer of staff from one employer to another does not conclude the
       process of establishing new municipal structures. New organisational designs, the appointment of
       new management, the placement of staff in line with the new organisational design and developing
       common conditions of employment within new amalgamated municipal structures are important
       processes to be addressed. However, such processes are subject to provisions in labour
       legislation and require consultation and negotiation. DTFs are urged to begin discussions with
       unions with the view to formulate consensus recommendations to bargaining structures for
       ratification and rapid implementation after local elections.

5.12   District Transformation Forums need to complete a range of tasks to facilitate the smooth transfer
       of staff over the next few months. Provincial facilitators will work with Forums to facilitate the
       completion of such preparation and to ensure a consistent approach is followed across the
       Western Cape.

Allocation and transfer of assets and liabilities

5.13   The allocation and transfer of assets and liabilities should similarly be in accordance
       with the principle that assets and liabilities follow the division of powers and functions. Moveable
       and immovable assets associated with any particular service will be allocated to the municipality
       that takes over that service from the current councils. Liabilities associated with services will
       similarly be allocated following the division of powers and functions.

5.14   Previous experience indicated that councils must ensure proper control over assets in the process
       of transfer to ensure losses are avoided.

5.15   DTFs need to complete a range of tasks to facilitate the smooth transfer of assets and liabilities
       over the next months. Provincial facilitators will work with Forums to facilitate the completion of
       such preparation and to ensure a consistent approach is followed across the Western Cape.

6.     Protecting the integrity of the future
6.1    It is important that the current councils do not make decisions in the period before the elections that
       undermine the position of the future municipalities such as incurring unwarranted debts, appointing
       new senior staff or selling major assets. It is clearly the responsibility of all political parties to
       introduce discipline in critical areas so as to protect the interests of the future councils.

6.2    It is proposed that a set of principles to protect the integrity of future municipal structures in the
       period before the local government elections be included in a section 14(5) notice and that the
       DTFs monitor the compliance of existing councils with these principles. Any council that would
       want to be exempted from any of these principles should submit a motivation to the Minister with
       the recommendation of the DTF.

6.3    The principles suggested for inclusion in a section 14(5) notice are:
        No new senior appointments between post-levels 0 and 3 should be made;
        Any growth in the salaries and wages component of the 2000/2001 budgets should not be in
            excess of the wage settlement;
        Any growth in operating expenditure in the 2000/2001 budgets should not exceed the
            Department of Finance's annual growth limitation;
        No immovable assets shall be sold;
        New capital expenditure should be limited to prevent an increase in the total level of interest
            and redemption payments payable by a Council;
        No new acquisitions of information technology systems should be made in order to facilitate
            the establishment of a single compatible system for the future municipalities.

7.    Planning for the period after the election
      The. It is important to note that significant work is set to follow after local government elections.
      However, DTFs should start preparing now for the implementation of key aspects of the post-
      election period. These include:
              proposals to ensure the immediate smooth functioning of new councils for the first
               months after the elections.
              a programme to build the capacity of councillors and administrators;
              financial arrangements to ensure financial integration is achieved from the 2001/02
               financial year;
              proposals for service delivery and service improvement strategies for the new council;
              proposals for governance mechanisms that not only guide the internal workings of
               councils, but would also clarify the interface between councils and communities.
              proposals to ensure that a series of legislative compliance issues are addressed to
               ensure councils are prepared to implement the new legislative framework expeditiously.

8.    Communication
8.1   It is important to develop excellent communication regarding the process as it develops and to
      ensure that all affected councils have easy access to information regarding the provincial local
      government transformation process.

8.2   To facilitate this, the following proposals are made:
               Provincial team members will attend meetings of DTFs to facilitate easy communication
                and the speedy flow of information;
               All available information relevant to the process will be posted on the provincial
                government website at;
               Other communication efforts will be made through the media, newsletters and circulars.

8.3   However, it is important to align the provincial communication effort with the information needs of
      existing councils. To ensure optimal alignment a questionnaire is attached to this document to
      determine the best methods of communication and to identify the specific information needs of

9.    Conclusion
9.1   The successful management of the local government transition is a critical success factor for
      effectively functioning local government over the next years. It is in the interest of all stakeholders,
      communities, political parties and officials to ensure the smooth implementation of new municipal

9.2   This document outlines the approach to be followed in the Western Cape to facilitate smooth and
      effective implementation of the new legislative framework for local government. It emphasises In
      addition District Transformation Management Forums are created with the view to provide the

        Provincial Minister for Local Government with appropriate information in establishing new municipal

10. Provincial Contacts
   Provincial Officials:
    Michael Brewis
    Fax: 021-4834058
    Tel: 021-483 3113

    Marina Van Der Merwe
    Fax: 021-483 4058
    Tel: 021-483 3113

   District Contacts:

    Breede River/Wynland DC: André Olivier
    Fax: 021-4222934
    Tel: 021-4222970
    Cell: 083 629 0805

    Klein Karoo/South Cape DC: Vernon Rose
    Fax: 021- 4222934
    Tel: 021-4222970
    Cell: 083 280 0270

    Central Karoo DC: Vernon Rose

    Fax: 021- 4222934
    Tel: 021-4222970
    Cell: 083 280 0270

    West Coast DC: Dirk Joubert
    Fax: 021-4222934
    Tel: 021-4222970

    Overberg DC: Vernon Rose

    Fax: 021- 4222934
    Tel: 021-4222970
    Cell: 083 280 0270


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