Municipal Demarcation Board 2021/22 Annual Performance Plan

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Cooperative Governance and Traditional Affairs

14 April 2021
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

Video: PC Cogta 14 April 2021 

Annual Performance Plans 2021/22

The Municipal Demarcation Board explained its mandate, its six committees including the Ward and Boundary Determination Committee and its 2021/22Annual Performance Plan (APP).

Members suggested that MDB is still far from realising the commitment to demarcate boundaries that create sustainable growth. The Committee had been meeting with municipalities that had been amalgamated before the 2016 elections that were worse off due to amalgamation. Members asked why local government elections follow two years after national and provincial elections and are not synchronised. Members noted that the MDB has no provincial footprint and is not visible to communities and it was asked which platforms are used to widen its reach into communities. MDB is often accused of not consulting communities resulting in complaints, protests and court cases. What lessons has MDB learned from previous public participation and stakeholder engagement? How did these lessons assist it to operate effectively? What lessons has it learned about financial viability and social cohesion when amalgamating municipalities?

What role does MDB have in the District Development Model (DDM) and how will it take advantage of the DDM and strengthen it in 2021/22? MDB was asked for details on its plan to assist role players to develop focus programmes to strengthen municipality capacity. The Constitutional Court ruled that the Electoral Act was unconstitutional as it barred independent candidates from contesting national and provincial elections. Will MDB make a submission on the Electoral Act review and is this included in its 2021/22 APP as the court has given Parliament until June 2022. What is the MDB view on that ruling?

Meeting report

As the Chairperson was still in another meeting, the Committee nominated Ms Direko as Acting Chairperson.

Ms D Direko (ANC), Acting Chairperson, said this meeting kick starts the consideration of the annual performance plans and budgets of the Department and its entities reporting to the Committee. This is a forward-looking process that focused on the allocation of resources for the financial year starting 1 April 2021 to 31 March 2022. This will culminate in the adoption of the Committee Report on the COGTA budget vote, which would be debated in the National Assembly. The budget vote process is different from the annual reporting process, which is backward looking and focuses on accountability for the use of resources allocated in the prior year. First in line is the Municipal Demarcation Board APP and budget.

On perusal of the APP the overall impression is that MDB is committed to ensuring that demarcation of the municipal boundaries results in the creation of sustainable municipalities that can fulfil their constitutional obligations. The commitment, however, is still far from being a reality. Between 30 November and 4 December 2020, the Committee convened meetings with municipalities that had been subjected to demarcation for the 2016 local government elections. This is after the Committee became aware of the serious municipal financial management problems directly related to the amalgamation process. There are municipalities such as Mangaung and one in Western Cape whereby the amalgamation did not assist. The overwhelming majority of the municipalities briefing the Committee were of the view that the amalgamation process worsened rather than improved the financial viability of those municipalities. In last week's Committee meeting, it was indicated that some of these municipalities are demanding a reversal of the 2016 amalgamation. All this suggests that MDB is still far from realising the commitment to demarcate boundaries that create sustainable growth.

The Committee does not usually praise fish for swimming, but in the current status, when an entity or department gets clean audit, it gives the Committee hope because it is something that is also a challenge in most municipalities. The Committee acknowledges the improved MDB target performance from 59% in 2015/16 to 95% in 2019/20. MDB also managed to finalize the ward delimitation process in time for the 2021 local government election despite the challenges of the COVID-19 working environment. The Committee iterates its commitment to support MDB with constructive inputs to ensure that these gains are sustainable.

Municipal Demarcation Board (MDB) 2021/22 Annual Performance Plan
Mr Thabo Manyoni, MDB Chairperson, announced that MDB had attained a clean audit for 2019/20. MDB had promised in November 2020 “to work as if the local government elections are tomorrow” and he said that MDB has concluded ward delimitations in the country and is doing homework on outer boundaries. It is also doing research on amalgamations and exactly what the problems are because most municipalities that were amalgamated are faced with serious problems.

Public and stakeholder engagement has commenced so that communities can understand what demarcation is about. There is a need to strike the balance between what is legislated and what MDB seeks to do to strengthen democracy. The more demarcation matters are contested, the more financial resources need to be used. National Treasury has indicated that if something is not legislated, it will not fund it. Problems in communities keep arising in one way or the other. MDB is trying to address some of the concerns raised post the delimitation process and after the maps have been handed over to the IEC in preparation for smooth elections.

On the decentralisation of MDB, it has now become a normal song, but MDB is trying to stress this point and it is engaging with other bodies on this. It also has to take its financial constraints into consideration as the country is faced with Covid-19. Ultimately, MDB provincial offices should be made available. That is part of ensuring that democracy is deepened and that communities can have access to the MDB – simply because it is a stakeholder that has an impact on their livelihoods.

Mr Muthotho Sigidi, MDB CEO, took the Committee through the APP 2020/21 presentation (see document) which focused on its mandate, its committees and its performance plan and targets.

Discussion
Mr K Ceza (EFF) asked MDB to give a historical background on why the local government elections follow the national and provincial elections after two years and why MDB is failing to delimit a more synchronised cycle.

On Programme 3, MDB envisages establishing itself as a national centre of excellence for spatial data and information that contributes to the redress of apartheid spatial planning. However, the budget for this is less than that allocated for MDB administration programme. Why is this key programme the least funded?

On public awareness and education, MDB cited the problem of reaching people who lack a digital network and social media. Back in the day there was an SABC programme which popularised the election. What public awareness activities to popularise MDB do you have with the SABC, which is a public platform with a wider reach?

Ms H Mkhaliphi (EFF) asked about the MDB committees and their role. MDB suggested that amalgamation of municipalities worsens the situation. What is the plan going forward? She gave the example of a municipality in Mpumalanga that complained that no service delivery occurred after demarcation. The demarcation did not help, and officials do not even visit the area. The purpose of amalgamation is to improve service delivery. It is evident that in the last two years MDB has lacked presence in the local regions and this concern was raised by the Chairperson.  MDB is important since it consults with people to avoid situations such as what happened previously in Vuwani. This begs the question whether people were consulted or not. How will MDB address this? MDB cannot rely on municipalities to consult with people who complain about the very same municipalities. How has MDB progressed in its talks with Treasury about its budget cut as the presentation is unclear on the result of these talks? How will you address not reaching people in rural areas? Engagement is better with organised stakeholders because they have resources, but the poor do not have a voice to participate. MDB said it will go back to the wards that are not happy about the delimitation. That is good leadership, but will this achieve anything?

Mr G Mpumza (ANC) commended MDB for achieving a clean audit and challenged it to sustain this outcome so that it does not regress. The demarcation process runs over a five-year cycle and this involves capacity assessment of the powers and functions of municipalities within the two-tier system of local government. The five- year cycle has been challenging municipalities because within the five years functions must be assigned. MDB has made an important proposal in the amendment of the current Municipal Demarcation Act amendment that this cycle should run over ten years. This will provide MDB enough time to conduct assessments so that information is credible for the assignment of powers at the two-tier level. At what stage is this replacement Municipal Demarcation Bill?

The MDB presentation refers to public and stakeholder awareness. Is this awareness limited to the MDB activities or does it go beyond wards, mobilising the public for meaningful participation? This would minimise the number of objections after the close of the demarcation period such as the current disputes MDB is faced with. It now wants to mediate. If communities are mobilized so that they understand their civic duty to participate, the process would be organic and not mechanical.

Mr I Groenewald (FF) requested the research reports as they will assist Parliament to understand the work of MDB better.

Ms D Direko (ANC), Acting Chairperson, said that MDB is often accused of not consulting communities and this had resulted in complaints and in some instances, court cases. What lessons has MDB learned from previous public participation and stakeholder engagement? How did these lessons assist it to operate effectively? What lessons has it learned about financial viability and social cohesion when amalgamating municipalities?

MDB response
Mr Manyoni replied that to destroy an institution, one would have to get rid of all the knowledgeable people in the institution. MDB will keep knowledgeable people in the institution so that it continues with its good work. On encouraging public participation, the IEC is independent, but all political parties ensure they encourage everyone to participate on the election matters of the IEC. Even for the MDB, political parties can participate in matters that impact them and their constituencies whenever MDB announces that there is a need for participation in certain areas. This will assist in enhancing democracy. Political parties should encourage their members to participate in demarcation matters.

Decentralisation of the MDB and having provincial offices for easy access deepens democracy. It helps communities understand what the processes are, what is expected of them and what inputs they need to bring to get the desired results. MDB appeals to the Committee to assist in sourcing the necessary resources to have a provincial footprint. After MDB has gone back to the communities and submitted ward maps to the IEC, this will have value. Even during smooth elections, there will be areas where there are hiccups. It is proper for constituencies to understand how MDB reaches its conclusions. Without this understanding, it would be doing a disservice to communities. Therefore, MDB will go back to some of these communities. There will be some cases where the MDB is called with nefarious intent but that is just a side issue.

CEO Sigidi replied on lessons learned that when MDB held a conference in 2016 a number of matters where articulated including the need for a programme to respond to matters raised including public participation and stakeholder engagement. Regionalisation was also an outcome of lessons learned. Ms Mkhaliphi correctly zoomed in on the demarcation factors in section 25 of the Demarcation Act when asking what lessons were learnt about viability and functionality. There are 12 factors but to ground them in concrete activities they are grouped into four areas: Spatial Information, Financial and Governance matters, Socio-Economic Activities and Service Delivery. In the past there was no mechanism to test if there was an improvement in these indicators. MDB learned when it studied the Mangaung / Naledi amalgamation how this affected financial viability. The impact is more about the grading of municipalities. Naledi merging with Mangaung affected the budget for employee costs due to equalization. There are two reports on Polokwane and Mangaung that analyse the impact of amalgamation on service delivery. Some of the results are articulated according to each indicator and are based on the lessons learned. The research reports were submitted as part of responding to input from Parliament. The research reports from this financial year will be shared as well.

The MDB governance committees are those six committees noted in the presentation which allow MDB to function effectively. Governance is self-explanatory as it looks at the governance and ethics of the entity. The Human Capital Committee deals with HR matters and employee remuneration. The Audit and Risk Committee looks at MDB internal controls, risk management and responses to Auditor-General queries. The Ward and Boundary Determination Committee is the main committee which considers ward delimitation and outer boundary re-determination. The Research and Knowledge Management Committee looks at research to support the Ward and Boundary Determination Committee. The Finance Committee is newly established to look at issues that were once part of Audit and Risk.

On what the plan is – municipality engagement indicated that some of their concerns are a result of demarcation. When MDB demarcates, there are various triggers: 1) MDB can re-determine a boundary on its own initiative after research and capacity assessment is done. The information can point towards amalgamation. In this instance, it is easy for MDB to explain itself. 2) Sometimes it is the initiative of the Minister and the MEC per section 22(2) where they have identified issues in two municipalities. MDB then does research and decides if the identified municipalities need to be amalgamated. Section 24 states that there is a need to share and redistribute resources. These matters can be looked at, keeping in mind that there are people on the other side like Naledi – which prompts the question of what kind of redistribution will be achieved if there is amalgamation.

There is a need for cohesive, integrated and non-fragmented areas. If in the past 20 years there had been such a move, this may not have been required. Perhaps the Committee can suggest a different criterion in the new Bill so that these matters are dealt with.

On funding, Treasury is being engaged to reverse the budget cut and fund the job evaluation outcome. It engages people in the Budget Office who are responsible for the MDB portfolio. When you invite Treasury in a normal departmental meeting there are competing needs so MDB is usually forgotten.

Mr Aluwani Ramagadza, MDB COO, gave a historical background to local government elections. The current dispensation of local government started in 2000 after the promulgation of the relevant legislation. Before the current system in 2000, there was a 1996 transitional arrangement. After the proclamation of the Structures Act, Demarcation Act, Systems Act and subsequent to that the MFMA, the MDB was established and commenced with the demarcation of the new municipalities from 842 to around 200. The target for the new dispensation of local government elections was 2000 and national and provincial was every five years since 1994. The reason was that constitutionally one cannot go beyond the proclaimed five-year cycle.

On why the MDB key programme is the least funded, the COO explained the biggest reason the MDB Programme 1: Administration carries the most budget is because of employee remuneration. The other programmes account for the actual work they do. Over the years, MDB has moved to a situation where most of the work is done internally and it has eliminated the use of consultants. This means that it has to capacitate itself internally; therefore the remuneration budget will be much higher.

To ensure that there is meaningful public participation, in the last two years there has been a MDB programme for this, and it has improved the intensity of public education. For the ward delimitation process, MDB went out to all municipalities to do education and awareness on what delimitation is about. Due to the limited budget, it targeted community development workers, ward committees and local councillors. The rationale was that if people who play a role at local level are educated on the process, they can assist in spreading the word.

Local newspapers and radio stations are used to popularise MDB. It is not easy but they play a pivotal role so from time to time MDB does interviews. It will garner more resources and explore greater use of radio stations. The SABC is used extensively and the vantage point is that it uses local languages although it is not cheap.

Mr Kevin Naidoo, Executive Manager: Municipal Governance in the Department of Cooperative Governance and Traditional Affairs (COGTA) gave an update on the draft Municipal Demarcation Bill. The draft Bill was published for comment towards the end of June 2020. There was a meeting with stakeholders on 4 and 9 Decembers 2020 including SALGA. MDB represented by the CEO and COO had clause by clause deliberations and factored in all the comments it had received.  The Bill is now with the Office of the Chief State Law Adviser. A part of it was submitted to the Presidency for consideration and it received feedback and is now being revised. After the compliance measures were attended to, the Department went to the various technical structures such as the Governance, State Capacity and Institutional Development Cluster; the Forum of South African Directors-General (FOSAD) and the relevant Cabinet committee to ask for approval to introduce the Bill to Parliament. Some of those processes are out of the Department’s control, bearing in mind that there will be elections and there might be parliamentary recess. After much deliberation, the current name of the Local Government: Municipal Demarcation Bill will align with section 155 of the Constitution which references “an independent authority” and the title of the new Act will be the Independent Municipal Demarcation Authority Act. This is to align it with new generation legislation. Early last year there was Border Management Authority Act and the Independent Communication Authority of South Africa Act.

Major redetermination is done every ten years. A redetermination includes movement of more than one ward – so that will take place every ten years. When there is a request to amalgamate, the legislation says it should be made at least three years before the local government term ends. In 2016 the MDB had less than two years to deal with transition matters so this intervention will prevent that. The Bill will deal with alteration of provincial boundaries as presently there is no specific guidance on this. In future the demarcation authority may make recommendations to Parliament on alterations to provincial boundaries.

Learning from the challenges that MDB faced with consultation and engagement on demarcation, the legislation provides for a much more intensive process of investigation of boundary proposals from citizens and stakeholders. Such investigation could be taken to MDB for further consideration. MDB will undertake a more intense public consultation process if the need arises. The legislation is thin on consultation and ward delimitation, so a similar process ought to be followed. The Bill will be brought to the Committee after following the relevant processes.

Further questions
The presence of the Chairperson was acknowledged by the Acting Chairperson who handed over to her.

The Chairperson said Members had not raised some matters she hoped would be raised. On the District Development Model (DDM), the MDB is within this family although it is independent. The model cuts across government entities and everyone in the value chain. What is the role of MDB in the model and how will it take advantage of the DDM and strengthen it in the course of implementing the 2021/22 APP? MDB envisages assisting role players to develop focus programmes to strengthen municipality capacity. Will MDB be more specific on the details of these focus programmes?

The Chairperson said the Constitutional Court ruled that the Electoral Act was unconstitutional insofar as it barred independent individuals to compete as candidates in national and provincial elections. Will MDB make a submission during the legislative review process and is this included in its 2021/22 APP as the court has given Parliament until June 2022. What is the MDB view on that ruling?

Mr Groenewald said the MDB research reports had not been received and their committee staff is efficient. He asked that MDB send them again.

Mr Ceza said that the MDB must provide a synopsis on the historical root cause why local government elections follow after national and provincial election by two years. Why has MDB not developed a programme for a more synchronized cycle? Upon research, he found that the Local Government Transition Act of 1993 was an interim measure to restructure local government and delimit the areas of jurisdiction of transitional councils and metropolitan structures. This process took longer than negotiating and deciding on the provinces. Thus local government elections took place in 1995 a year and nine months after the 1994 general elections and carried on to June 1996 because of disputes in the Western Cape and KZN. Based on that delay, there is a perpetual state of elections going on. Why is this still happening? The White Paper resulted in the Municipal Structures Act which established municipalities in terms the types and powers of municipalities, and the Municipal Electoral Act which dealt with elections. He was hoping for this kind of a synopsis to see why MDB is not capacitated enough with resources to go to the people and for MDB to decentralise through regionalisation.

Ms Mkhaliphi asked when the new maps will be available to understand the new wards as the country is heading to elections. On consultation, MDB is unlike other departments who expect to have the public coming in every day. MDB does research and when it is elections, it consults with people. There is no reason for it not to be visible. It is elitist so it makes sense why the MDB chairperson responded that the Portfolio Committee must get resources for it so that it can be visible. That is not the point – the point is what the plan for visibility is? The lack of visibility and consulting only through municipalities does not work. The presentation mentions inputs and outputs but it is complicated. MDB said it does its work and then the Minister comes after and requests amalgamation. Does the MDB ever reject a request for amalgamation if research shows that it is not advisable to amalgamate? Historically, the work of MDB was to shift what was the status quo and to have a sense of development as a progressive state. For example, some wards were dominated by Indians, coloureds and whites because of the Group Areas Act but the new dispensation demolished segregation. To this end, the MDB started mixing wards so that they are multiracial, but everything has gone back to what it was pre-1994. How can MDB leave the wards as they were pre-1994?

MDB response
Mr Manyoni replied that to ensure easier communication, it is part of the plan to have regional offices and without them the challenges will remain such as partisan issues and non-accessibility of MDB to the public.

Mr Sigidi replied that when he spoke about section 22, he was talking about the two triggers for when MDB re-determines boundaries. One can be done by MDB based on a capacity assessment report – this process does not wait for the Minister. Section 22 indicates that the MDB has its own programme of redetermination. In that space, anyone can come with an application to move wards. When that application is made, it becomes the property of MDB and it does research and either agrees or disagrees. The Act also empowers the Minister to identify areas that should be amalgamated. The MDB, after doing research, can decide which areas to amalgamate. After the 2021 elections, anyone can come with an application to amalgamate wards and 44 have already been received.

Mr Sigidi explained that some wards have one particular community due to the number of registered voters in that particular municipality. It can happen that one community, for example, Indians, may constitute the total number of allowed registered voters in that community. The only area where one can achieve integration is when the area is broad.

On the decentralisation plan, MDB identified the challenges and looked into regionalisation to increase its footprint but that cannot happen without funds. It seeks to increase the footprint through the media platforms and engage stakeholders through the current virtual platforms but those have limitations because people cannot access them.

The maps can be found on the MDB website and in each Provincial Gazette. In each ward there is map, what constituted the map and the registered voters. There is also an app to tell you the ward you are in.

On the lack of a synchronous election cycle, this has more to do with the annual budget cycle because the municipal budget ends in June not March. The Western Cape and KZN had transitional challenges because there were still lagging matters under negotiation.

When the Constitutional Court ruling, was pronounced, MDB brainstormed and came up with a discussion document and considered the feasibility of a single election and what impact it will have on MDB. It then mapped some processes of what the MDB can do if the new Act talks about constituency-based elections. It then looked at the current reports available and said if there are 400 members in the national election and 30-80 per province in the provincial election, how will representation be determined? Apart from the Annual Performance Plan, there are broader operational plans that investigate this ruling. There was also the Electoral Reform Workshop by two parliamentary committees on 16 March and MDB looked at what was raised there. For now, it is not clear how the constituencies will be arranged. The MDB discussion document will be sent to the Committee.

Mr Ramagadza replied that one of the documented lessons, in the context of MDB having limited resources, is the advantage of the District Development Model in the context of intergovernmental relations. MDB can leverage that process to explore the idea of MDB becoming a participant in the DDM on a full time basis. Boundary determination does not happen by chance to municipalities in a given district. MDB must be proactive and be part and parcel of the DDM. It will also be involved with all the stakeholders that are part of the DDM in ward delimitations. The factors used require a lot of information either from the municipalities or departments and it considers all the integrated development plans in that province. That is how MDB will use the DDM system to its advantage.

On public awareness, MDB should be planted into the DDM system and all the participants will have their own public awareness process and MDB will leverage this process as well.

Ms Mbali Myeni, MDB Deputy Chairperson, emphasised that MDB must come up with a plan on how it envisages decentralisation – perhaps constituency offices at a provincial level. Currently MDB has no provincial office. Those MDB members that are there are not there on a fulltime basis. You only see their presence during delimitations and determinations. MDB is now proposing to decentralise but it is hamstrung due to resources.

Mr Groenewald said MDB must commit to sending the research reports.

Mr Manyoni replied that the documents will be sent and some of them are a work in progress. Tomorrow MDB will have a workshop on one of the documents to address mega-cities, mainly Joburg. Its base is not increasing but the population is increasing. When MDB does ward delimitations, it is faced with the challenge of some areas having a much larger concentration even if it is only an area of two to three streets. Nonetheless, the documents will be provided.

The MDB Deputy Chairperson noted the request for the ward delimitation maps and said those will be sent to the Committee as well.

Meeting adjourned.

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