Briefing by MEC for COGHSTA State of Limpopo Municipalities & Detail report on Mogalakwena Portfolio Committee on Co. GTA 11 August 2015 Parliament 1
1. OVERVIEW / BACKGROUND 2. KEY FOCUS AREAS 2. 1 Municipal Transformation and Institutional Development 2. 2 Basic Services Provision and Infrastructure Development 2. 3 Financial Viability and Management 2. 4 Local Economic Development 2. 5 Good Governance and Public Participation 3. Implementation of the Back to Basics 4. Report on Mogalakwena Municipality 2
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OVERVIEW The presentation happens at the backdrop of: • South Africa celebrating 21 years of democracy • Preparations for the 2014/2015 municipal audit underway • Implementation of the Back to Basics • Preparation for Gazzetting and Publication of the sec 47 report for 2014/2015. 4
Legislative Requirements • Constitution of the Republic of South Africa, 1996 (Section 152 in particular); • Municipal Systems Act, 2000 (As amended) • Municipal Structures Act, 1998 • Intergovernmental Relations Framework Act, 2005 • Land Survey Act 8 of 1997 • Spatial Data Infrastructure Act 54 of 2003 • Traditional Leadership and Governance Framework Act 41 of 2003; • Limpopo Traditional Leadership and Institutions Act 6 of 2005; • Limpopo Houses of Traditional Leaders Act 5 of 2005; • Northern Province Circumcision Schools Act 6 of 1996; 5
Legislative Requirements • Municipal Demarcation Act 27 of 1998 • Municipal Electoral Act 27 of 2000 • Disaster Management Act 57 of 2002 • Spatial Planning and Land Use Management Act (SPLUMA)16 of 2013 – Municipalities authorities of first instance on land development and management; – Commencement date July 1, 2015 • LOCAL GOVERNMENT: REGULATIONS ON APPOINTMENT AND CONDITIONS OF EMPLOYMENT OF SENIOR MANAGERS 6
POLICY IMPERATIVES • National Development Plan; • Limpopo Development Plan • National Spatial Development Perspective; • New Growth Path; • National LED Framework; • Green Economy Plan; • Provincial Spatial Development Framework, 2007; • White Paper on Traditional Leadership and Governance, 2003; 7
DEMOGRAPHICS • Limpopo is the 5 th largest province in South Africa and takes up to 10. 3% of the country’s land area • According to census 2011, total population is at 5. 405 million. An increase of 0. 79% between 2001 and 2011. • 87% of the area is rural • Is comprised of 5 district municipalities and 25 local municipalities 8
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Appointment of Senior Managers TO BE NOTED • Reluctance in the Filling of positions in Municipalities affected by the re-determination of boundaries ? ? ? • Finding candidates to fill CFO positions beginning to be a huge problem 10
Appointment of Senior Managers Provincial perspective Comparative overview of the filling of Senior Managers Position 2012/2013/2014/2015 Municipal Manager 26/30 (87%) 23/30 (77%) Chief Financial Officer 23/30 (77%) 25/30 (83%) 21/30 (70%) Technical Manager 25/30 (83%) 20/30 (67%) Development and Planning Manager 19/28 (68%) 25/28 (89%) Corporate Services Manager 23/30 (77%) 20/30 (67%) Community Services Manager 25/29 (86%) 24/30 (80%) 21/30 (70%)
Appointment of Senior Managers MOPANI Comparative overview of the filling of Senior Managers Position 2012/2013/2014/2015 Municipal Manager 6/6 (100%) 4/6 (67%) Chief Financial Officer 3/6 (50%) 4/6 (67%) 5/6 (83%) Technical Manager 5/6 (83%) 6/6 (100%) 5/6 (83%) Development and Planning Manager 3/5 (60%) 6/6 (100%) 4/6 (67%) Corporate Services Manager 4/6 (67%) Community Services Manager 4/6 (67%) 5/6 (83%) 3/6 (50%)
Appointment of Senior Managers VHEMBE Comparative overview of the filling of Senior Managers Position 2012/2013/2014/2015 Municipal Manager 5/5 (100%) 4/5 (80%) Chief Financial Officer 5/5 (100%) Technical Manager 5/5(100%) 4/5 (80%) 3/5 (40%) Development and Planning Manager 5/5 (100%) Corporate Services Manager 4/5 (80%) 3/5 (60%) Community Services Manager 4/5 (80%) 3/4 (75%) 4/5 (80%)
Appointment of Senior Managers CAPRICORN Comparative overview of the filling of Senior Managers Position 2012/2013/2014/2015 Municipal Manager 5/6 83% 6/6 (100%) 4/6 (67%) Chief Financial Officer 5/6 (83%) 6/6 (100%) 5/6 (83%) Technical Manager 5/6 (83%) 4/6 (67%) 3/6 (50%) Development and Planning Manager 4/6 (67%) 6/6 (100%) Corporate Services Manager 5/6 (83%) 4/6 (67%) Community Services Manager 5/6 (83%) 6/6 (100%)
Appointment of Senior Managers WATERBERG Comparative overview of the filling of Senior Managers Position 2012/2013/2014/2015 Municipal Manager 5/7 (71%) Chief Financial Officer 7/7 (100%) 6/7 (86%) 4/7 (57%) Technical Manager 5/7 (71%) 6/7 (86%) Development and Planning Manager 2/6 (33%) 6/7 (86%) Corporate Services Manager 5/7 (71%) Community Services Manager 7/7 (100%) 4/7 (57%)
Appointment of Senior Managers SEKHUKHUNE Comparative overview of the filling of Senior Managers Position 2012/2013/2014/2015 Municipal Manager 5/6 (83%) 4/6 (67%) 6/6 (100%) Chief Financial Officer 3/6 (50%) 4/6 (67%) 2/6 (33%) Technical Manager 5/6 (83%) 6/6 (100%) 4/6 (67%) Development and Planning Manager 5/6 (83%) 4/6 (67%) Corporate Services Manager 5/6 (83%) 4/6 (67%) Community Services Manager 5/5 (100%) 5/6 (83%) 4/6 (67%)
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Access to basic services Service Water Census 2011 86% Census 2001 78. 1% Census 1996 77. 5% Sanitation 38% 27% - Electricity 87. 3% 62. 9% 39. 2% Refuse removal 21. 8% 15. 6% 13. 1% 18
Projects implementation • A total of 367 projects were implemented during the financial year with the 2014/2015 MIG allocation • At end of financial year, these projects were at various stages of implementation – 62 were at tender and evaluation (planning for 2015/2016) – 219 were at various stages (%) of construction – 86 have been completed • The next slides provide details per municipality 19
SEKHUKHUNE DISTRICT Municipality TOTAL No. of Projects PROJECT STATUS (no. of projects) Design & Tender Construction Completed 3 6 3 8 2 Ephraim Mogale 12 Elias Motsoaledi 10 Makhuduthamaga 12 - 3 9 Fetakgomo 5 - 1 4 Greater Tubatse 9 1 4 4 Sekhukhune 19 6 13 - 67 10 35 22 TOTAL 20
MOPANI DISTRICT Municipality TOTAL No. of Projects PROJECT STATUS (no. of projects) Design & Tender Construction Completed Greater Giyani 8 3 4 1 Greater Letaba 18 3 11 4 Greater Tzaneen 13 8 3 2 Ba-Phalaborwa 5 - Maruleng 9 1 8 - Mopani 12 1 10 1 65 16 41 8 TOTAL 21
VHEMBE DISTRICT Municipality TOTAL No. of Projects PROJECT STATUS (no. of projects) Design & Tender Construction Completed Musina 8 1 5 2 Mutale 4 - Thulamela 9 - 6 3 Makhado 10 - 7 3 Vhembe 14 2 9 3 45 3 31 11 TOTAL 22
CAPRICORN DISTRICT Municipality TOTAL No. of Projects PROJECT STATUS (no. of projects) Design & Tender Construction Completed Blouberg 10 - 3 7 Aganang 3 - 1 2 Molemole 3 - Polokwane 28 2 20 6 Lepelle-Nkumpi 5 - 4 1 Capricorn 88 20 47 21 137 22 78 37 TOTAL 23
WATERBERG DISTRICT Municipality TOTAL No. of Projects PROJECT STATUS (no. of projects) Design & Tender Construction Completed Thabazimbi 5 2 3 - Lephalale 7 3 3 1 Mookgophong 4 - Modimolle 6 1 4 1 Bela 5 1 3 1 Mogalakwena 26 4 17 5 53 11 34 8 TOTAL 24
FUNDING FOR INFRASTRUCTURE PROVISION (MTEF) Funding Source 2015/2016 R’ 000 2016/2017 R’ 000 2017/2018 Total R’ 000 Municipal Infrastructure Grant 3, 160, 598 3, 290, 731 3, 485, 794 9, 937, 123 Integrated National Electrification Programme ESKOM & Municipal Grant 1, 128, 195 1, 168, 157 1, 200, 105 3, 496, 457 Regional Bulk Infrastructure Grant 953, 667 1, 029, 457 955, 649 2, 938, 773 Municipal Water Infrastructure Grant 528, 574 846, 727 955, 753 2, 331, 054 TOTAL 18, 703, 407 25
Major infrastructure to be implemented for provision of access basic services Provision of Water: • Bulk Distribution pipeline from De. Hoop to Steelpoort to be completed this year, • Bulk Distribution system from Flag Boshielo to Mogalakwena and Steelpoort to Mooihoek planned to start in current financial year. • Mokolo Crocodile Water Augmentation project, Phase 1 planned for completion in the current financial year. • Pipeline from Valdezia to Mowkop (in Louis Trichardt) on the Nandoni scheme has started and earmarked for completion in 2016. Electricity provision • 56 167 house holds are earmarked to be electrified in the current financial year 26
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Provincial pending patterns since MIG inception 28
Spending on 2014 / 2015 Municipal Infrastructure Grant In January 2015 • R 539. 909 million was taken away from poor spending municipalities – Of which R 224. 257 was re-allocated to municipalities in the province As at end of June 2015 • R 1. 994 billion (out of R 2. 748 billion) was spent (73%) • R 753. 941 million remained unspent • 6 municipalities have spent 100% • 6 municipalities have spent ≥ 90% and ˂ 100% 29
2014/2015 MIG spending National Comparison Province Allocated (R'000) Transferred to Transfers as Expenditure date % allocation to date Expenditur Balance e as % Unspent allocation Eastern Cape 3, 079, 289 100. 00% 2, 884, 338 93. 67% 194, 951 Free State 829, 794 100. 00% 763, 424 92. 00% 66, 370 Gauteng 445, 427 100. 00% 426, 493 95. 75% 18, 934 Kwa. Zulu Natal 3, 270, 390 3, 270, 420 100. 00% 3, 129, 728 95. 70% 140, 692 Limpopo 2, 748, 406 100. 00% 1, 994, 465 72. 57% 753, 941 Mpumalanga 1, 717, 515 100. 00% 1, 484, 901 86. 46% 232, 614 Northern Cape 462, 944 100. 00% 391, 706 84. 61% 71, 238 North West 1, 725, 708 1, 707, 104 98. 92% 1, 521, 154 88. 15% 185, 950 Western Cape 484, 576 100. 00% 416, 351 85. 92% 68, 225 TOTAL 14, 764, 049 14, 745, 475 99. 87% 13, 009, 097 88. 11% 1, 736, 378 30
Expenditure PER MUNICIPALITY as at end June 2015 SEKHUKHUNE DISTRICT Municipality Original Allocation (R’ 000) Adjustment (R’ 000) Revised allocation (R’ 000) Amount spent (R’ 000) % EXP Ephraim Mogale 31, 070 - 31, 070 27, 958 90 Elias Motsoaledi 50, 840 15, 000 65, 840 49, 867 76 Makhuduthamaga 57, 452 - 57, 452 51, 791 90 Fetakgomo 21, 388 (10, 139) 11, 249 100 Greater Tubatse 61, 745 35, 000 96, 745 61, 787 64 451, 120 (170, 000) 281, 120 125, 173 44 Sekhukhune 31
Expenditure PER MUNICIPALITY as at end of June 2015 MOPANI DISTRICT Municipality Original Allocation (R’ 000) Adjustment (R’ 000) Revised allocation (R’ 000) Amount spent (R’ 000) % EXP Greater Giyani 56, 046 10, 000 66, 046 100 Greater Letaba 53, 440 - 53, 440 41, 797 78 Greater Tzaneen 87, 083 24, 000 111, 083 67, 633 61 Ba-Phalaborwa 29, 769 25, 371 85 Maruleng 25, 309 5, 000 30, 309 25, 528 84 429, 490 (290, 000) 139, 490 47, 614 34 Mopani 32
Expenditure PER MUNICIPALITY as at end June 2015 VHEMBE DISTRICT Municipality Original Allocation (R’ 000) Adjustment (R’ 000) Revised allocation (R’ 000) Amount spent (R’ 000) % EXP Musina 18, 943 - 18, 943 17, 118 90 Mutale 24, 058 - 24, 058 100 Thulamela 126, 460 - 126, 460 109, 386 86 Makhado 107, 087 - 107, 087 62, 678 58 Vhembe 486, 510 20, 000 506, 510 369, 691 73 33
Expenditure PER MUNICIPALITY as at end of June 2015 CAPRICORN DISTRICT Municipality Original Allocation (R’ 000) Adjustment (R’ 000) Revised allocation (R’ 000) Amount spent (R’ 000) % EXP Blouberg 38, 408 5, 000 43, 408 34, 169 79 Aganang 32, 157 (5, 000) 27, 157 18, 517 68 Molemole 28, 943 - 28, 943 28, 631 99 Polokwane 266, 671 38, 243 304, 914 301, 014 99 49, 920 20, 000 69, 920 18, 488 26 252, 059 7, 000 259, 059 100 Lepelle-Nkumpi Capricorn 34
Expenditure PER MUNICIPALITY as at end of June 2015 WATERBERG DISTRICT Municipality Original Allocation (R’ 000) Adjustment (R’ 000) Revised allocation (R’ 000) Amount spent (R’ 000) % EXP Thabazimbi 32, 926 (19, 756) 13, 170 2, 053 16 Lephalale 35, 992 (7, 000) 28. 992 28, 702 99 Mookgophong 15, 766 27, 000 42, 766 15, 425 36 Modimolle 32, 364 (13, 014) 19, 350 100 Bela 22, 193 - 22, 193 100 138, 849 (25, 000) 113, 849 59, 251 52 - 18, 014 - 0 Mogalakwena Waterberg 35
Expenditure PER DISTRICT as at end of June 2015 District Original Allocation (R’ 000) Adjustment (R’ 000) Revised allocation (R’ 000) Amount spent (R’ 000) % EXP Sekhukhune 673, 615 (130, 139) 543, 476 327, 825 60 Mopani 681, 137 (251, 000) 430, 137 273, 990 64 Vhembe 763, 058 20, 000 783, 058 583, 021 74 Capricorn 668, 158 65, 243 733, 401 659, 059 90 Waterberg 278, 090 (19, 756) 258, 334 146, 975 57 3, 064, 058 (315, 652) 2, 748, 406 1, 994, 465 73 Province 36
FIVE YEAR MUNICIPAL AUDIT ANALYSIS 37
2013 / 2014 AUDIT OUTCOMES • Waterberg District, Mogalakwena, Bela-Bela & Lephalale • Makhado, Musina & Thulamela • Capricorn District & Blouberg • Sekhukhune District & Makhuduthamaga • Maruleng Unqualified • • • Qualified Mookgopong & Modimolle Polokwane, Molemole & Lepelle-Nkumpi Elias Motsoaledi Mutale, Greater Tzaneen Greater Giyani Greater Letaba and Aganang • Mopani Adverse • Vhembe District, Ba-Phalaborwa, Ephraim Mogale, Fetakgomo, Thabazimbi & Greater Tubatse Disclaimer 38
ASSESMENT OF THE 2015/2016 MUNICIPAL BUDGETS Limpopo Provincial Treasury
• MFMA s 16(2) (1) states the mayor of the municipality must table the annual budget at a council meeting at least 90 days before the start of the budget year • Provincial Treasury assessed 27 tabled 2015/16 MTREF budgets – Mogalakwena and Greater Tubatse municipalities did not submit their budget timely for assessment, – Polokwane assessed by NT 40
ASSESSMENT CRITERIA • Credibility – To determine if the budget is funded in terms of Section 18 of the MFMA and whether the municipality adopted a budget process with sufficient political oversight and public participation • Relevance – To test if the budget is aligned to the reviewed Integrated Development Plan (IDP) of the municipality and the extent to which national and provincial priorities • Sustainability – To determine whether the budget gives effect to the long-term financial and operational sustainability of the municipality. 41
KEY OBSERVATIONS Credibility – Funding compliance measurement tables indicate that municipal budgets are funded however there are insufficient underlying assumptions to provide reasonable assurance that revenue projections are realistic. – Revenue projections for the MTREF period is increased on a static percentage without considering the changing economic factors within and outside a municipal jurisdiction. – Poor alignment of DORA conditional grants in the budget schedules – Proposed tariff were either not cost reflective and/or did not consider the communities affordability. – No contingency plans in place for the power outages which could result in loss of revenue. 42
KEY OBSERVATIONS Relevance – Municipal budgets were generally linked to the national priorities. – Budget documents and schedules were not complete, which distorts linkage between the IDP, and SPLUMA – Public participations were held by all municipalities with minor challenges; – Departments do not send officials with sufficient knowledge of their departmental plans and strategies to IDP participation sessions – Risk management activities were not integrated into the municipal budget process; hence no strategic risk register was prepared during the IDP and MTREF budget preparation process – None of the municipalities submitted the draft procurement plans, particularly for capital projects which should have been approved in the current financial year ending 30 June 2015 – Service standards for municipalities were not submitted to council. 43
KEY OBSERVATIONS • Sustainability – Poor revenue collection which renders municipalities unable to meet short term financial obligations and inability to retain sufficient cash reserve to maintain municipal infrastructure and replace assets. – Insufficient budget provided for the repairs and maintenance of infrastructure which renders sustainability doubtful. – Inability to quantify distribution losses. – Limited usage of number of households and future expected number of households in the budgeting process. 44
RISKS THAT MIGHT AFFECT BUDGET IMPLEMENTATION • Unavailability of land for development • Aging infrastructure which hinders development and external investment • Land invasion • Mushrooming of illegal business • Poor revenue collection • Under utilisation of infrastructure ( due to ESKOM inability to energise boreholes) • Quantification and disclosure of distribution losses. • Cash flow management. • Community protests which may result in fruitless and wasteful expenditure 45
CONCLUSIONS Based on the assessment and engagements held on the tabled budgets; Provincial Treasury and COGHSTA will embark on assisting these municipalities during their IDP / Budget review process to ensure: • credibility, relevance and sustainability, • the assumptions used to determine the revenue and expenditure budget projections are sufficient and justified. 46
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LOCAL ECONOMIC DEVELOPMENT • CWP implemented in 17 municipalities. • 22000 work opportunities created as opposed to 23000 during the previous quarter. The challenge with the decline is due to non replacements for those who withdrew. (There are budget constraints related to replacements). • Four(4) municipalities ( Musina, Greater Letaba, Elias Motsoaledi and Polokwane local municipalities) added to the new implementation of CWP with an anticipated creation of 2000 work opportunities. • 30 municipal LED Strategies have been assessed. • All LED District forums are functional 48
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FUNCTIONALITY OF IGR STRUCTURES AND COUNCIL COMMITTEE • All municipal councils and committees of council are functional. • All District IGR forums are functional, however challenges have been experienced regarding nonattendance by local municipalities. 50
Functionality of MPACs • All 30 municipalities have established Municipal Public Accounts Committees (MPACs), however functionality is still a challenge. Provincial and District MPAC Fora are also established and convened on a quarterly basis; • Poor attendance of MPAC chairs to audit committee meetings • Poor reporting to Council by some Committees and implementation of recommendations by Council. • 22 municipalities have approved 2014/15 annual work programs, however there is poor implementation of the plans. • Continuous changing of MPAC chairs is adversely affecting the operations of MPAC. • MPAC ‘s are still without necessary resources and support from administration. • Non-attendance of meetings by members. 51
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Introduction • Launched B 2 B in December 2014 • Established the Provincial Task teams and District Crack Teams • Conducted Diagnostic assessments Categorisation as per July 2014 Assessments • 6 – performing well • 8 – potential to do well • 16 – Dysfunctional December 2014 Assessments • 8 – performing well • 12 – potential to do well • 10 – Dysfunctional 53
B 2 B PROFILING OF MUNICIPALITIES Doing Well (8) POTENTIAL TO DO WELL (12) Dysfunctional (10) Maruleng Greater Tzaneen Vhembe Musina Ba-Phalaborwa Aganang Thulamela Mutale Mopani Makhado Molemole Thabazimbi Blouberg Lepelle-Nkumpi Polokwane Bela Capricorn Mookgophong Waterberg Lephalale Mogalakwena Greater Letaba Elias Motsoaledi Ephraim Mogale Modimolle Sekhukhune Makhuduthamaga Greater Tubatse Featakgomo Greater Giyani 54
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Municipality Name Strategy Outcome Vhembe Rapid assessment conducted The municipality’s financial (Financial Management The Department seconded a Municipal and Good Governance Manager. status is stabilising. Aganang Submission of AFS done and COGHSTA and Provincial Treasury (Financial Management assisted the municipality since they and Good Governance were unable to submit AFS and draft ) relation between labour and management is normalised annual report to AG on time due to institutional and financial management challenges. Relation between labour and management was not Good Greater Tubatse COGHSTA seconded the Municipal Appointment of Municipal (Good Governance) Manager and the CFO Manager finalized
Municipality Name Strategy Outcome Mopani Co. GHSTA seconded the Municipal Financial stability (Delivering Basic Services Manager from Provincial Treasury. Service providers appointed and Financial Management ) Rapid assessment conducted and payments for work done MIG task team established. being processed. Rapid assessment conducted. Report being processed. Provincial Treasury assisted with Fewer billing queries and Thabazimbi (Delivering Basic Services and Financial Management ) Polokwane (Financial Good billing challenges (Hands on and support) Management, Governance enhanced revenue. building capabilities) Sekhukhune Dedicated support on Technical Projects for 2015/2016 (Delivering Basic Services) reports by both COGHSTA and approved and have been DWS advertised
Municipality Name Strategy Outcome Mookgophong Rapid assessment conducted. Additional MIG funding Recommendations monitored secured. through B 2 B processes Mogalakwena COGHSTA and Waterberg District (Delivering Basic Services, Municipality have seconded an Financial Management and Acting Municipal Manager Good Governance ) Stability and service delivery provisioning improved Mediator was appointed to mediate on the staff to normalize the situation. Two technical experts on Infrastructure deployed through MISA Ephraim Mogale COGHSTA seconded an Acting Municipal Manager to facilitate the appointment of the MM The MM has been appointed
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• Inability to attract and maintain suitable skills in rural municipalities • Inability to attract candidates for Municipal Managers’ position towards the end of the electoral cycle of the municipality (e. g. 2 year contracts) • Financial Management with particular reference to revenue generation capacity of municipalities (mostly affected are rural municipalities)
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• Review of the current categorisation • Mobilise funding to develop sector plans for new electoral cycle for: – Newly established municipal areas • Dedicated monitoring Supply Chain Management procurement plans (ensure adherence to timelines) – Project planning for 2016/2017 to be completed by March 2016. • Develop plan to assist municipalities affected by redetermination of municipal boundaries.
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Background and Overview • Mogalakwena Municipality is situated in the western quadrant of the Limpopo Province, within the Waterberg District Municipality, and is bordered by Lepelle Nkumpi Local Municipality to the east, Mookgophong Local Municipality to the south, Lephalale Local Municipality to the west and Blouberg Local Municipality to the north • The total geographical area of the Mogalakwena is approximately 6166. 0740 square kilometres • Mogalakwena Local Municipality constitute over 45 % of the Waterberg District Municipality’s total population with 307 682 and 79 396 households • The municipality consists of 3 proclaimed townships and 178 villages and also covers a range of other smaller settlements in the area between Mokopane and Rebone. • Development in Mogalakwena is based on three economic pillars: • tourism, agriculture and mining 65
GOVERNANCE • The municipality is constituted by 32 wards with 63 councillors – – – – • 32 ward councillors and, 31 PR councillors 52 ANC councillors 6 DA 2 COPE 1 APC 1 VF Plus 1 AZAPO It should be noted that there was political instability within the municipality which resulted in 23 ANC councillors being expelled of which 13 of them were Ward councillors. • By-elections were then held in November 2014 to replace the expelled councillor. The by-elections resulted in the ANC being victorious and winning all the contested 13 wards. 66
GOVERNANCE continued… • There was a political intervention to address the instability within the municipality by reorganising the Political Management Team. • The restructuring culminated in the appointment of the following: – Mayor – Cllr. M. P. Sebatjane – Speaker – Cllr. A. Matsemela – Chief Whip – Cllr. S. Tsebe • It should however, be noted that the working relationship between councillors is currently healthy and sound. • All councillors, irrespective of their political affiliations, are collectively providing leadership to the municipality. 67
GOVERNANCE continued… Council Committees • The Annual Schedule of meetings for all council committees was adopted by council during its meeting on the 26 th June 2015. • EXCO and Council meetings are held as per the approved schedule. • Council is also performing its functions as per Section 160 (2) of the Constitution • Portfolio Committees are meeting on a monthly basis as per schedule • The Municipal Public Accounts Committee (MPAC) is established and functional – Four (4) meetings held since June 2015 to execute an oversight role. Public Participation: • Quarterly Schedule for the Mayoral Imbizo`s approved for implementation • 32 Ward Committees established • 19 Ward Committees functional and 13 dysfunctional • In the process of resuscitating dysfunctional ward committees. 68
GOVERNANCE continued… Traditional Leadership: • There are 9 Traditional Leaders within the jurisdiction of Mogalakwena Local Municipality • Traditional Leaders were refrained from participating in council activities due to the turmoil that existed, however, they have been engaged by the new leadership and are now part of the activities of council. 69
Institutional Capacity • 2 of 7 Section 56 Managers Posts filled ( Community Serves and Planning and Development) • 5 Vacancies as follows: • Municipal Manager – advertised and closed on 23 June 2015 (Shortlisiting to be conducted by end August) • Chief Financial Officer – Resigned on the 09 th July 2015 (Post to be advertised by 21 August 2015) • Corporate Support Services – Recommended re-advert – (to be readvertised by 21 August 2015) • Traffic and Emergency – Awaiting council and concurrence for appointment • Technical Services - Awaiting council and concurrence for appointment – Manager Planning and Development on suspension – undergoing disciplinary hearings 70
Basic Service Delivery Electrical services • Mogalakwena Municipality has a licence to supply electricity to an area of 2 800 m², with ESKOM accounting for the bigger slice. • Out of 79 396 households within the municipality, 71 163 are electrified which constitutes 91% with a current backlog of 9%. • The Municipality is, in collaboration with ESKOM, embarking on a programme to reduce this moving target significantly by 2020. • To achieve the set target, Eskom has confirmed the construction of Borutho substation which will increase the distribution capacity of the infrastructure in town, the adjacent periurban settlements, industrial areas and mining operations. • With all going according to schedule the substation is programmed to be completed in 2018. • The municipality will electrify residential extensions in all our 178 villages, as tenders have been awarded to electrify new houses in villages. • Significant progress is also been made to upgrade the municipality's Eskom distribution to 50 MVA which will allow growth in areas around Mokopane for in the next 10 years giving a breather to plan ahead. 71
Basic Service Delivery Electrical services • The development of medium to long term Energy Master Plan is in progress to ensure readiness for future electricity programmes and projects. • The municipality increased human resource capacity with appointment of four electricians and one handyman to meet the current services demands. • However the challenge is with regard to spending of 6% of income generated from sale of electricity service which in terms of NERSA licencing condition must be spent on refurbishment and maintenance of ageing infrastructure. • The Municipality will review the status quo and consider same during our mid-term budget adjustment to ensure that indeed NERSA regulatory directives are met. • In the efforts to reinforce commitment to contribute to reducing incidents of crime especially in the night, the municipality have successfully installed 103 high mast lights in the periurban and rural communities. • In the current financial year (2015/16), the municipality will install additional 26 high mast lights to value of R 6. 5 m. 72
Basic Service Delivery WATER: • Mogalakwena Local Municipality is both the Water Services Authority(WSA) and Water Services Provider (WSP) • The municipality is 84 % dependent on bore holes as the water source • 178 Villages are supplied with water from boreholes • Rural villages are supplied as per the RDP standard however, • Most of the bore holes run dry during winter season and poses challenge with regard to meeting the demands • The total households is 79 396 and 72 293 with access to water which is 92% • The backlog is currently at 8% Mokopane Water challenges: • Current demand 32 ml/d • Peak period: 42 ml/d • Current supply 24 ml/d • Deficit 8 ml/d • Constraint to supply low cost housing in Ext. 14, 17, 19 and 20 as a result of lack of infrastructure 73
Basic Service Delivery Planned water supply interventions: • In the process of installing infrastructure in extensions 14, 17, 19 and 20 • Water tankering – using own trucks and outsourcing • Securing of additional 5 ml/d from Doorndraai Dam negotiated with Mining Fraternity • Equipping boreholes at Danisane and Mahwelereng for supply of additional 1, 5 ml/d and 0, 7 ml/d respectively • Permanent solution – the completion of Olifants River Water Resource Development Project • The Olifants River Water Resource Development Project (water supply pipeline from Boshielo Dam to Mokopane and all the villages within the municipality) • The Project will provide 79 396 households with water in which 65% falls under indigent category • The supply system will provide water to Mokopane Town and village reservoirs and networks mostly for standpipes in streets and limited low use yard connections • The project cost to completion: R 1. 5964 Billion and funded through the Regional Bulk Infrastructure Grant (RBIG) • Current progress is at 45% and aimed to be completed by December 2019 74
Basic Service Delivery Additional Water related Challenges 1. Stealing of transformers which take a minimum of six (6) months to replace due to differences of their specifications. 2. Breakages of pump machines and related maintenance equipment would result with delays 3. Poor working relations between pump operators and the community leadership 4. illegal connections on the system in rural and urban 5. Ageing of infrastructure in town and townships 6. reliance on borehole sources for supply 7. insufficient capacity of supply due to source challenges Mitigation of challenges 1. Roll out of bulk water infrastructure in all settlements in the municipality 2. Sourcing of bulk water from flag boshielo and dooringdraai dams 3. Procurement of term contract for supply of maintenance machinery and equipment 75
Basic Service Delivery Sanitation: • Sanitation is dignity, the availability of sanitation facilities does not only improve the dignity of people but also enhances their healthy living. • The current backlog is at 42% equivalent to 32 436 households that still need the VIP toilet system. • This trend requires that more of our future funding be directed to sanitation services. • Mokopane Town Sewer Plant is running at full capacity. • The municipality is currently in the process of refurbishing the facility through installation of mechanical aerators to replace the old system, a standby generator already installed and old pumps are replaced. • A contractor is appointed to build an additional 10 ml sewer plant at Masodi. • The new plant will off-load pressure from the existing plant in town and cater for the entire peri-urban settlements and the envisaged mining operations. • The new sewer plant will not only restore dignity to the people in Sekgakgapeng, Moshate, Mahwelereng and Masodi, they will also be relieved from the inhuman conditions subjected to them by the erstwhile Potgietersrus Council as they had to endure perpetual stench from the nearby oxidation ponds. Which will be decommissioned on completion of new plant. 76
Basic Service Delivery Rural sanitation: • 500 VIP toilets for 2014/15 to be provided to beneficiaries in various villages within the municipality which should be completed by end October this year. • District municipality provided additional 75 VIP toilets which have just been erected at Dipichi Village. • For the 2015/16 financial year the municipality has budgeted for another 500 VIP toilets, again with the district municipality contributing an additional 70 units. Roads and stormwater: • The municipality has a road network of approximately 1 205 km covering its area of jurisdiction, 453 km are surfaced through funding of priorities in the IDP. • Ten (10) km will be surfaced in 2015/2016 through MIG allocation. • A portion of the 752 km balance will be re-gravelled in 2015/16 utilizing internal plant. • Phase one of the N 11 widening of 25 km, from Mokopane town to north, by SANRAL will commence in the second quarter of 2015/16 financial year. • Consultations with stakeholders and private property owners who may be affected have started. 77
Basic Service Delivery Solid waste management services • Mogalakwena municipality has only two approved landfill sites, located in Mokopane and Rebone Townships. • There are challenges at the existing landfill sites which necessitates the development of a sustainability plan. • The Letjema Waste Management Programme has been introduced to assist in waste collection and clearing of strategic identified areas resulting with creation of temporary jobs for the youth, however ongoing review and monitoring is necessary. Housing • The Department of COGHSTA allocated 970 housing units for the 2014/15. • 327 houses completed and handed over to respective beneficiaries. • 643 houses are still under construction due to delayed in finalisation of foundation design. • It is expected that the houses will be completed by end of the current calendar year. • With regard to the 2015/16 housing allocations, the municipality submitted priorities and sites for development and are awaiting confirmation of units by COGHSTA. 78
Bulk Service provision Mogalakwena Local Municipality (MLM) is embarking on a clear strategic and sustainable approach to delivery of Bulk Services. • The municipality has therefore embarked on clustering of small projects into larger projects to be more cost effective and ensure future efficient maintenance and operation. • The strategic decision to develop infrastructure master plans is now breeding intended results thus improving the readiness to accommodate the envisage massive development opportunities in the Municipality. • To this end it is gratifying to state that the Master Plan development process is at an advanced stage. 79
Bulk Service provision Master plans development Service Bulk Water Services Progress Completed Internal Water Reticulation (mainly rural) Currently being developed Wastewater Services Completed Roads and Storm water Draft stage Electricity Currently being developed On site Sanitation for rural areas Completed at Macro level Water Conservation and Water Demand Completed at Macro level 80
Service challenges in Informal and relocated settlements 1. Municipality has three informal settlements, namely Mzombane, Old Ga-pila and old Ga-puka where community members have erected structures that are not formalised. The housing units are estimated to be between 4000 and 5000. 2. The is currently no infrastructure for basic services 3. The municipality has put temporary measures to provide services, which are not adequate as it would be if the settlements were formalised. Challenges in settlements that where relocated by Anglo Plats Mine. • The settlements of Armoed (SEkhaolelo) and Rooibok (GA-Puka) which were formally known as Mothlo and Sterkwater formally Ga-Pila were relocated by the mine and are now experiencing inadequate supply of water as well as poor sewer services. The mining company did not address the above stated challenges at the time of relocations. Mitigation of the challenges • The municipality is engaging the mining company and the affected communities to work out a long lasting solution. 81
Financial Management • The municipality has in the past five years achieved four (4) unqualified and one (1) qualified audit reports. • The achievement was as a result of adequate internal controls and competent senior staff. • Currently the process of finalizing the Annual Financial Statements for the 2014/15 audits is at an advance stage. • The municipality is assisted by consultants on the compilation of the AFS, debt collection and VAT recovery. • In the 2014/15 financial year the municipality projected to collect 85% of revenue, however due to the disturbances experienced, the collection was 65. 9% as at end June 2015. • Currently reviewing the billing system to improve the collection rate in the current financial year. • Efforts will also include measures to reduce the existing debt through engagements with rate payers. 82
Financial Management • The indigent register was improved to ensure deserving households are captured. • In the last two weeks of the 2014/15 financial year the municipality experienced financial fraud amounting to R 5. 7 m. • A case was opened with SAPS and investigations are ongoing. • The incident was reported to Provincial Treasury and Office of the Auditor General and internal measures were taken to prevent recurrence. Debts: • The municipality does not have outstanding debts with other entities as invoices are paid within 30 days of receipt in terms of Section 65 of the MFMA Outstanding debts by government departments: • Dept. Agriculture - 122 420, 60 • Dept. Education - 20 426 291, 34 • Dept. Health & Welfare - 1 499 699, 74 • Dept. of Justice - 1 690 562, 95 • Dept. Local Government & Housing - 234 552, 84 • Public Works - 1 845 728, 55 • Dept. Safety & Security - 652 869, 61 • Water Affairs - 1 499 723, 16 • TOTAL - R 27 971 848, 79 83
Spending on Municipal Infrastructure Grant • The initial total allocation for Municipal Infrastructure Grant in 2014/15 was R 138 849 000 • R 25 million was withdrawn due to failure to spend within the thresh hold by mid-year • The balance remained at R 113 849 000 • Expenditure as at end June: » 2013 – 100% » 2014 - 100% » 2015 - 80% • Implementation of projects for the 2014/15 delayed due to political and administrative instability 84
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Historical Background 2013 - 2015 • The challenges in the Municipality reached the climax in July 2013, – the Municipal Council, took a resolution to place the Municipal Manager on “special” leave. – The reason for putting him on the “special” leave was due to the validity of his employment contract. • COGHSTA then sent a team to the municipality to conduct rapid assessment – The assessment report indicated collapse of administration in the municipality. – Provincial EXCO resolved to put the municipality under section 139 (1)(b). – The appointed administrator was refused entry to the municipal premises and the municipality took the provincial government to court. 86
Historical Background 2013 - 2015 The ruling party then initiated disciplinary proceedings against 23 of its councilors: • The 23 councilors were then expelled by their political party – The expulsion of twenty three (23) councilors resulted in political and administrative instability in the municipality. – The councilors refused to vacate office after their expulsion. – The councilors, together with other 10(ten) councilors from the opposition parties continued to take council resolutions and implemented them. – The by-elections were declared – And by-elections of 13 wards were successfully held. • The expelled councilors and the suspended Municipal Manager resorted to the courts for relief resulting in about 8 cases before the courts. 87
Historical Background 2013 - 2015 The new council after the by-elections in the 13 wards and replacement of 10 PR councilors, resolved to request COGHSTA to second a Municipal Manager, and COGHSTA. Co. GTA and COGHSTA set up a support and intervention team, which identified among other things that: • There was political and administrative instability; • Poor spending on infrastructure grants; • There were revenge-seeking staff members from both sides; • Water and refuse removal challenges; • Irregular appointment of service providers and procurement processes; • Poor communication with communities; and • Legal cases impacting on the functionality of the municipality. 88
National and Provincial intervention • COGHSTA together with Co. GTA National developed an intervention package for the municipality – in order to address the political and administrative instability that has led to lack service delivery in the municipality. • Four critical work streams were also established – Basic Services, – Performance Assessment, – Financial Management, – Human Resource and Legal. 89
None reporting to work by employees After the suspension of the Municipal Manager in November 2014; • officials stopped reporting to work from the 24 th November 2014. • Some started reporting to work from the 15 th January 2015, • and on Wednesday 25 th February 2015, all employees reported to work. • The Municipality implemented the principle of “no work no pay” for three months to officials who were absent from work. • The municipality has a total staff complement of 701 and approximately 187 officials (mostly middle managers and supervisors) were affected by implementation of ‘no work no pay’ principle. The officials took the municipality to court for unpaid salaries/ no work no pay principle and the judgment favoured the municipality. As part of the re-integration process a mediator was appointed by National Department (Co. GTA) to normalize the situation in ensuring the smooth running of the municipality. 90
Legal Cases When the seconded Municipal Manager started working at the municipality: • There were eight court cases that were still pending in the municipality that were supposed to be dealt with in order for the municipality to move forward. • The municipality was advised by their appointed legal firm to withdraw the cases, six (6) of the cases have been withdrawn. The withdrawn cases were launched by the Municipal Manager, expelled Councilors and the municipality as co-applicant. The two cases that were launched by the municipality as the sole applicant were left to run their course in court. The two cases are: • The decision of EXCO to intervene in Mogalakwena Municipally in terms of section 139(1)(b) of the Constitution and • The application against SAPS and the newly sworn in councilors for an order to vacate the municipal premises, to enter the premises only with the permission of the Municipal Manager. 91
Legal Cases • The case relating to the decision to intervene in terms of Section 139(1) (b) of the Constitution is still pending in court while; • the application against the SAPS which was set down for the 11 th May 2015 for the extension of the interdict was finalized on the said date when the court discharged the interdict. The former Municipal Manager has since set down one of the applications referred to above which application was dismissed on 23 rd December 2014 for lack of urgency. In the said application, he was challenging the validity of decisions taken by council and the secondment of an official by the department to act as municipal manager. The said application set down for 07 th July 2015 has since been removed as same was set down on an unopposed motion roll. 92
Political Intervention There was a political intervention by the ruling party in June 2015: • The PMT was recalled and replaced by a new Political Management Team. The intervention brought about stability in both council and administration. The municipality is currently working on a healing process and rebuilding itself to restore community confidence. 93
CONCLUSION • The municipality is embarking on a process of healing and rebuilding itself • Interventions were made to stabilise the institution, the new PMT was appointed, Acting Municipal Manager appointed, and in the process of stabilising the systems • The service provider to conduct a forensic audit is in the process of being appointed by COGHSTA – To consolidate the findings of the previous reports to in order to implement the recommendations • Working towards regaining community confidence and striving for excellence in service provision • The future of Mogalakwena Local Municipality is tied to our unwavering commitment, hard work, and forging of human solidarity with the people of Mogalakwena and the private sector partnerships. 94
Thank you. 95
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