Presentation to the NCOP Select Committee on Cooperative Governance and Traditional Affairs on the Ngaka Modiri Molema District municipality section 139(1)(c)

Presentation to the NCOP Select Committee on Cooperative Governance and Traditional Affairs

on the Ngaka Modiri Molema District municipality section 139(1)(c) intervention

Presented by: MEC Maine – Department of Local Government and Human Settlements

Date: 15 September 2014Venue: Parliament, Cape Town

CONTENT OF THE PRESENTATION

1. Purpose of presentation2. Background on Ngaka Modiri Molema DM3. Basis for invoking section 139(1)(c) in the district

municipality4. Process followed by the provincial government5. Status quo on the intervention6. Process plan for the intervention 7. Conclusion

PURPOSE

• The purpose of the presentation is to brief members of the Select Committee on reasons for invocation of section 139(1)(c) of the Constitution in the Ngaka Modiri Molema District Municipality (NMMDM) by North West Provincial EXCO

• Also to seek support and approval from the Selection Committee to invoke Section 139(1)(c) of the Constitution in the NMMDM.

BACKGROUND ON NGAKA MODIRI MOLEMA DM

• The Ngaka Modiri Molema District Municipality (NMMDM) is one of the four (4) category C municipalities (according to the Municipal Structures Act)in the North West Province.

• The district is made up of five local municipalities: Mahikeng, Ditsobotla, Tswaing, Ramotshere Moiloa and Ratlou LMs.

• The district municipality is an executive type with forty-five councilors comprising of an Executive Mayor, Mayoral Committee, Speaker and Council Committees

• Furthermore, according to section 84 of the Structures act, which deals with the division of functions and powers between district and local municipalities, the Ngaka Modiri Molema district municipality is the Water Services Authority in the district and is also responsible for disaster management and construction of municipal roads and storm water.

• It one of the two highly water distressed districts in the Province (Dr Ruth Mompati being the other one), reliant on underground water, using boreholes

Basis for invoking section 139(1)(c) in the district municipality

Governance:

• The NMMDM has been experiencing governance and administrative challenges since the beginning of the current term of Local Government which have adversely affected the delivery of services through its constituent local municipalities

• The Ngaka Modiri Molema District IGR Forum is dysfunctional and this has led to a myriad of complaints from the local municipalities about the poor relations between themselves and the district.

• The non-functionality of the District IGR Forum has weakened its regional planning capabilities and coordination of the provision of water service in particular.

• There have been no service level agreements between the District as water services authority and Local Municipalities and/or Botshelo Water as water services provider [in terms of bulk water; distribution; operations and maintenance; provision of free basic services]


Governance cont.

• The poor relations also relate to the perceived lack of involvement and consultation with local municipalities on prioritisation, identification, and implementation of projects.

• Due to non functionality of the IGR Forum, there is generally no coordination and collaboration between the District and its family of locals to improve service delivery.

• Efforts were made on numerous occasions by the Department to resuscitate the IGR forum but attendance by District Administrative leadership and local municipalities was poor.


Administration:

• Council appointed a Municipal Manager and senior managers who do not meet the competency requirements in terms of local government regulations (despite advise by the department not to proceed with the appointments)

• The Municipal Manager, at the time of his appointment, had no experience in local government save for the period he acted in the position when seconded by the provincial government.

• Equally, a Chief Financial officer who also did not have the relevant experience in the local sphere of government as a financial management practitioner was appointed.

• This has had a negative effect on clean administration, as the municipality is being led by inexperienced senior officials who also do not have the relevant skills to occupy the positions


Administration:

• The 2010/11, 2011/12 and 2012/13 audit outcomes of the Auditor General show a chronic failure on the part of the District Municipality to address issues raised in the management letter that contributed to three consecutive years of Disclaimers. There are poor internal controls which compromises supply chain management processes.

• The District Municipality has obtained disclaimer audit opinions for the past three (3) financial years. The Auditor General has reported irregular expenditure of R339,864,539.00 in the 2011/2012 & 2013 financial years. Irregular expenditure relates to expenditure that has been incurred without following proper procedures and not adhering to regulations.


Administration cont.

• There are reports that supply chain management processes have been flouted by the Municipal Manager and senior managers on key services such as the provision of water tankering services to water distressed communities within the district.

• It is alleged that the contract is given to one supplier and that some senior officials in the district are connected to the supplier

• Communities receiving this service have complained about the inconsistent supply of the water as well as the poor quality of the water

• The provincial government intends to probe into this matter and take appropriate action where necessary because council is not taking action on alleged financial misconduct and irregular, wasteful and fruitless expenditure as raised by the Auditor General


Service delivery:

• NMMDM is one of the two water stressed districts in the province. Much as there are water sources challenges in the district, the poor management of water provision programmes by the district municipality aggravates the situation.

• Firstly, the district has failed to develop and maintain a good relationship with the local municipalities as water services providers. There have been no service level agreements to inform the roles and responsibilities of both parties in as far as water provision is concerned

• Local municipalities in the district have been complaining about the district’s lack of consultation and involvement when water and sanitation projects are initiated, planned and implemented.


Service delivery cont:

• Secondly, the local municipalities have been providing the water service without any agreement with the district and not being reimbursed for costs incurred. This has contributed to the financial constraints of the local municipalities as they are unable to service their bulk water accounts with the water board (Botshelo Water).

• The total estimated arrear balance of the municipalities within the district is in excess of R200 million. The locals cannot afford to pay this amount and the district refuses to pay, citing that the locals are the ones generating revenue from the sale of water which the locals dispute.

• The Auditor General has also raised this matter consistently that the district as the water services authority, must make provision for the arrears because there were no agreements.



• This poor relationship and no Inter-governmental relations has resulted in the delivery of water services in the district being highly compromised. Some communities in Dinokana, Madibogo and Setlagole villages have not had water for years, while the district receives equitable share allocations and grants for water and sanitation.

• The Ngaka Modiri Molema is one of the districts that has experienced numerous service delivery protests as a result of poor or non delivery of water. Communities of Ratlou (Madibogo, Setlagole), Ramotshere Moilwa (Dinokana, Khunotshwana) and Ditsobotla (Itsoseng, Bodibe) have protested against the lack of water provision on their areas for years. These communities have on many occasions raised this with the relevant authorities but no long lasting solutions have been made.



• Recently, the former Premier and some members of EXCO had to address the community of Itsoseng following the violent protests against poor delivery of services and in particular, the lack of water. The district, as the water service authority, has done very little to intervene on this matter and the local municipalities are the ones that have been negatively affected by this

• The major issues that lead to protests are that:

1. The district delays in implementing projects, despite the availability of funds2. The projects are incomplete (e.g. the water reservoir project in Itsoseng and

Verdwaal)3. The quality and standard of work on the projects is poor (e.g. the reservoir in

Itsoseng does not provide enough water)4. There is very little or no maintenance of water infrastructure



• Thirdly, the district has not been spending the grants allocated to them for water and sanitation projects. For instance, The Department has through the Provincial Treasury received an allocation of R 60 000 000.00 to assist in eradicating Water and Sanitation backlogs and further to that, revitalize the capital city of the Province (Mahikeng).

• Ngaka Modiri Molema District Municipality was allocated R 47 000 000.00 in total from the Grant. The district has not performed well in the spending of the grant and has so far spent only about R4 000 000. A total of R27 000 000.00 has been transferred to the municipality and the outstanding balance is R20 000 000.

• The Department indicated to the district towards the end of the Financial Year end (2013/14), that funds had to be surrendered to Treasury following the indication of no expenditure on some of the projects.


Service delivery cont:• The Department of Water Affairs and sanitation has compiled a report on the

quality of drinking and waste water in the District

• The Blue drop water status (drinking water) is very low and the quality of water is very poor and not safe for drinking.

• The Green drop water status (waste water) is equally of poor standard and has dropped from 28.4% in 2011/12 to 17.78% in 2012/13

• The Department of Water Affairs has indicated that the business practices are in a critical state and urgent municipal and provincial local government intervention is required. It is noted that interventions that have occurred has not shown to have had impact on wastewater service delivery. The poor score is understated by a severe lack of information, data and management systems that would constitute a fair service performance. According to the department of Water Affairs, the District has not complied with the submission of a corrective action within the 30 days period as stipulated.


The reasons for the decision to place the municipality under administration can be summarised as follows:

• Failure by the district municipality to provide quality services to the residents of the Ngaka Modiri Molema District (in line with powers and functions)

• Failure to implement programmes and projects relating to infrastructure programmes for water and sanitation services

• Poor administration of service delivery related programmes (poor infrastructure spending, poor monitoring of projects and programmes)

• Poor integration and coordination of infrastructure and other programmes with the local municipalities as the water services authority (in terms of the Intergovernmental Relations Framework Act)


• Failure by council to act on alleged maladministration, fraud and corruption

• Failure by the district municipality to provide support to the local municipalities in terms of section 88 of the Municipal Structures Act

• Failure by the district municipality to comply with applicable legislation and regulations governing the local sphere of government (Municipal Systems Act, Municipal Systems Amendment Act of 2011, Municipal Structures Act, Municipal Finance Management Act)

Process followed by the provincial government

• The department has had numerous engagements with the district since 2012 to date at both administrative and political levels

• The engagements were aimed at both identifying the challenges facing the district and providing solutions and support towards addressing same

• The previous MECs for Local government have engaged with the council of the district highlighting the areas that require the attention of the district, including the water challenges and the support to the local municipalities


• Both administrations of the department of Local government and the Provincial Treasury have continuous meetings and workshops with the district municipality where the officials have raised certain concerns with recommendations to the district

• The district has absented themselves from most meetings called by the department and in cases they do attend, management sends junior officials


• The Provincial EXCO then, after receiving reports on the poor state of affairs in the district, resolved on 2 July 2014 to invoke section 139(1)(b) intervention in the municipality

• The district subsequently objected to the manner in which the process was followed by the provincial EXCO.

• In the spirit of cooperative governance, the Provincial EXCO then resolved to withdraw the intervention on that basis


• The department then afforded the district an opportunity to respond to the issues that are of concern to the provincial government (the district declined to meet with the MEC citing short notice)

• A session with the district was then eventually held on 21 August 2014 where the district presented a lengthy report denying and disputing all concerns raised even by the Auditor General and the Department of Water Affairs, in a very defensive manner. The responses of the district were also reactive in nature.


• The provincial government therefore resolved to dissolve the district council on the basis that there is no political will and ownership of the myriad of problems in the district and the fact that the communities of the entire district continue to suffer from poor and lack of service delivery

• The provincial EXCO resolved on the 3rd September 2014 to dissolve the district council in terms of section 139(1)(c)

Status quo on the intervention

• The District received the notice of the Provincial EXCO resolution to dissolve the council on the 3rd September 2014

• The District has responded to the letter by the MEC citing dissatisfaction about the decision of the Provincial EXCO to dissolve council

• The letter also demanded that the Provincial EXCO decision be reversed by the 10th September 2014 or face legal action

Process plan for the intervention

• The Provincial government has resolved to put in place an intervention plan that will resolve the service delivery crisis in the district in the short, medium to long term

• The plan seeks to establish a Rapid Response Team which will promptly respond to the critical service delivery problems, with special focus on water and sanitation services. The team will also proactively attend to potential service delivery hotspots and crises by engaging with the communities and all key role-players

• A Joint Operation Centre is being established to attend to the water and sanitation crisis in the district but will also service all other municipalities in the province.

Conclusion

• The provincial government is gravely concerned over the Municipal Council’s inability as well as neglect/refusal or failure to demonstrate to us how they have intervened in the administrative failures and/or shortcomings of the administrative arm of the District Municipality, this in the form of the exercise of its oversight responsibility/ies.

• The NW Provincial government is committed to resolving the service delivery crisis in the Ngaka Modiri Molema in an effective and sustainable manner

• The support of the NCOP is sought to empower and enable the provincial government to address the long standing problems of poor governance and administration within the Ngaka Modiri Molema district.

Thank you

Documents

Presentation to the NCOP Select Committee on Cooperative Governance and Traditional Affairs on the Ngaka Modiri Molema District municipality section 139(1)(c)