SALGA KWAZULU-NATAL PMA 2018 UPDATE ON KEY POLICY ADVANCES MADE - - PowerPoint PPT Presentation

SALGA KWAZULU-NATAL PMA 2018

UPDATE ON KEY POLICY ADVANCES MADE BY THE NEC

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PRESENTATION OUTLINE

• 1. Composition of the SALGA NEC
• 2. SALGA Deployment to Provinces & NCOP
• 3. Outcomes of SALGA Energy Summit
• 4. Outcomes of NCOP Local Government Week
• 5. Impasse between Municipalities & ESKOM
• 6. Councillor Welfare & Support
• 7. Update on Salary and Wage Negotiations
• 8. Appointment of Senior Managers & Competency Assessments
• 9. Update on Capacity Building
• 10. Update on Registrar of Labour Relations

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COMPOSITION OF THE NEC

• At the SALGA National Executive Committee (NEC) meeting of 19 July 2017

Cllr David Magabe submitted a letter of resignation from the NEC in light of a pending deployment to take over a responsibility outside of local

• government. This was followed by the formal resignation of the Deputy

President, Cllr Lindiwe Ntshalintshali as a member of the NEC, in April 2018.

• Clause 13.5 of the SALGA Constitution, as amended, stipulates that “any

vacancy, which occurs in the office of any of the office bearers and/or additional members between National Conferences, shall be filled by the National Executive Committee”. The NEC therefore has the constitutional prerogative to fill the vacancy.

• In line with the nomination of NEC members as per the SALGA Constitution,

as amended, the SALGA Limpopo and Mpumalanga Provincial Executive Committees (PEC) have been presented with the opportunity to nominate a replacement for Cllrs Magabe and Ntshalintshali.

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COMPOSITION OF THE NEC

• In considering the filling of the vacancy of Deputy President, the NEC

had to take cognisance of the position adopted by SALGA to ensure equitable gender balance within the NEC but more so the constitutional requirement as per Clause 14.3 that “the three Deputy Presidents must be comprised of a representative from each category of municipality; and must be from different provinces to ensure representation”.

• The implications of the aforesaid constitutional provisions and SALGA

gender representation are that the new Deputy President must:-

– be female, – be from a local municipality; and – not be from the same province as other members of Presidency.

• Accordingly the NEC on 11 May ‘18 resolved to appoint Cllr Thembi

Nkadimeng as Deputy President.

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NEC DEPLOYMENT TO PROVINCES

PROVINCE NATIONAL EXECUTIVE COMMITTEE DEPLOYEE

• 1. Eastern Cape

Cllr Bhekumzi Stofile & Cllr Xanthea Limberg

• 2. Free State

Cllr Robert Mashego & Cllr Xolani Sotashe

• 3. Gauteng

Cllr Mpho Khunou & Cllr Nomakhosazana Meth

• 4. Kwazulu-Natal

Cllr Jesta Sidell & Cllr Memory Booysen

• 5. Limpopo

Cllr Thami Ngubane & Cllr Maphefo Letsie

• 6. Mpumalanga

Cllr T.J Makolomakwa & Cllr Xola Pakati

• 7. Northern Cape

Cllr Deon De Vos & Cllr Sindiswa Gomba

• 8. North West

Cllr Florence Radzilane & Cllr Bongile Mhaleni

• 9. Western Cape

Cllr Nombulelo Hermans

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DEPLOYMENT TO NCOP

NOTE : The other two Provincial representatives will be used as alternates. PROVINCE PROPOSED REPRESENTATIVE

• 1. Eastern Cape

Cllr Zibonele Isaac Dumzela

• 2. Free State

Vacant

• 3. Gauteng

Cllr Mapiti Matsena

• 4. Kwazulu-Natal

Cllr William Mapena

• 5. Limpopo

Cllr Pat Hlongwani

• 6. Mpumalanga

Cllr Mavis Thusile Charles

• 7. Northern Cape

Cllr Nyameka Shushu

• 8. North West

Cllr S Mondlane

• 9. Western Cape

Cllr Gillion Bosman

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OUTCOMES OF THE SALGA ENERGY SUMMIT

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OUTCOMES OF THE ENERGY SUMMIT

• SALGA hosted the Energy Summit under the them “Defining the Energy

Future for Local Government in South Africa”, at the Sandton Convention Centre 7th - 9th March 2018;

• The Summit was attended by approximately 1,000 delegates representing

a wide range of stakeholders in South Africa.

• Objectives of the Summit were defined as follows:

– To examine the possible scenarios for the energy sector and to define an ideal future business model for local government. – Understand how an energy transition can occur economically, legally, financially and institutionally. – Pursue consensus of the political leadership that change in the energy sector is necessary. – Develop and define a country-wide agreement for the energy sector.

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OUTCOMES OF THE ENERGY SUMMIT

Discussions from the Summit were consolidated into the following five themes:

Enabling Environment

Provide clarity on constitutional and legislative issues Review current industry structure and market arrangements Redesign policy framework Review tariffs Unlock funding

Customer Centricity

Ensure services are cost reflective Mitigate grid defection Create a Social Compact for a just and fair energy transition

Operational Resilience

Improve asset management Implement cost containment Realise new revenue streams Implement new and/or improved business models Implement benchmarking

New Opportunities Deployment

Promote and implement renewable energy Implement new financing mechanisms Pilot and implement new energy technologies

Collaborative Leadership

Appointment of an Energy Reform Commission Establishment of a multi-sector and multi- stakeholder Energy Transition Leadership structure Provide Support to SMMEs and Black Industrialists in the energy sector

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OUTCOMES OF THE ENERGY SUMMIT

THE SUMMIT RESOLVED THAT:

• 1. SALGA Leadership seek an audience with the President of the Republic to

sensitise him about the imperative of urgently assisting in resolution of the Energy Policy complex;

• 2. The President appoints an Energy Reform Commission to review the

current structure, evaluate the reform work done to date, define a more sustainable structure and implement the structural changes required; that in conjunction with CoGTA and SALGA, a team of experts be appointed to provide the required strategic direction and support to municipalities;

• 3. To ensure that the electricity supply industry reform becomes a reality,

municipal service delivery improves as well as becomes financially sustainable, the outcomes of this Energy Summit be captured in a detailed action plan;

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OUTCOMES OF THE ENERGY SUMMIT

THE SUMMIT RESOLVED THAT (CONT.): 4. SALGA ensures that such an action plan is developed and implemented;

• 5. To establish a multi-sector and multi-stakeholder Energy Transition

Leadership structure, led by SALGA President, the Minister of CoGTA, the Minister of Energy, the Minister of Finance and the Minister of Public Enterprises, to lead the implementation and monitoring of the action plan.

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OUTCOMES OF NCOP LOCAL GOVERNMENT WEEK

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OUTCOMES OF THE NCOP LOCAL GOVERNMENT WEEK

• The National Council of Provinces (NCOP) is the only institution in South Africa’s

constitutional construct that plays an integrative role by bringing representatives

• f the three spheres of government together under one roof within the legislative

sector.

• Pursuant to this strategic mandate, the NCOP has as one of its strategic flagships

the NCOP Local Government week which is been convened in partnership with the SALGA.

• As had been the trend over the years, the 2018 NCOP Local Government Week

convened from 8 – 10 May 18, encapsulated conceptual engagements covering a variety of pertinent matters relevant to the sector.

• The content focussed on the strategic locus of local government in terms of

– spatial transformation, – integrated planning, – review of the current fiscal disaggregation model, – obligatory monitoring, support and intervention by National and Provincial spheres of government to Local Government; and – Land Use Management and Planning.

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OUTCOMES OF THE NCOP LOCAL GOVERNMENT WEEK

NCOP Week resolutions

• i. Addressing existing legislative gaps in order to ensure the that

government operates as coherent single system and these included;

• a. Amending the MFMA to ensure that both SALGA and COGTA

receive statutory reports in order to enable packaging of a joint single national monitoring system and to create a mechanism for SALGA, COGTA & TREASURY to complement each other in terms of an early warning system

• b. Finalisation of the Support and Intervention Bill in order to create a

shared national model for provision of section 154 support and a relatively predictable basis for the evocation of section 139 constitutional intervention by provincial administrations

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OUTCOMES OF THE NCOP LOCAL GOVERNMENT WEEK

NCOP Week resolutions (Cont.) (ii) Urgently addressing systemic matters that are crippling the coherence of the government and these included the following

• a. Resolving the Local Government – ESKOM impasse in terms of the

constitutional authority of municipalities to distribute and where ESKOM is involved conclusion of appropriate agency agreement

• b. A requirement to review the current water distribution value chain

to strike a balance between water as a commodity that municipalities must buy in bulk and households must pay for, and access to water as a constitutionally entrenched right

• c. Review of the current formula of equitable share to enable local

government to deliver on its constitutional and legislative mandate

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OUTCOMES OF THE NCOP LOCAL GOVERNMENT WEEK

NCOP Week resolutions (Cont.) III Enhancing the robustness of the NCOP in terms of oversight as well as review of the NCOP rules

• a. Remodel the way the National Assembly, the NCOP and Provincial

Legislatures conduct oversight on sections 47 and 48 of the Municipal Systems Act to ensure that prior evocation of a constitutional intervention, the executive provides a substantive account on how they have complied with section 154 of the Constitution

• b. Review of the NCOP rules and engage the Presidency to ensure that

there is a specific provision in the budgetary allocation for SALGA’s participation in the NCOP (currently SALGA finances participation of the 10 representatives)

• c. Review rules to expand and enhance the participation of SALGA in the

NCOP in terms of all Committees, debates and outreach programmes as an integral part of the NCOP (This is linked to the transformation of the NCOP to truly reflect all the two spheres it seeks to represent in our Parliamentary system)

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IMPASSE BETWEEN ESKOM AND MUNICIPALITIES

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BACKGROUND: STRUCTURAL AND SYSTEMIC CHALLENGES IN ELECTRICITY RETICULATION

• Structural Challenges in Electricity Reticulation:

– Legacy issues in the reticulation of electricity, in particular the resultant inequity in terms of tariffs charged ; – The provision of public and street lighting in Eskom reticulated areas; and – The role of municipalities in renewable energy not clear/ or not considered.

• Systemic Challenges in Electricity Reticulation

– The current reality under ESKOM credit control mechanisms, for municipal bulk accounts and end users services by ESKOM in order to align it to municipal credit control by-laws and cycles; – The unsustainability of current payment agreements between ESKOM and municipalities in arrears; – The historical debt owed to and by municipalities; – Reconciliation of municipal debt to ESKOM; and – Eskom Notified maximum demand Penalties.

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SECURED ESKOM CONCESSIONS

DESCRIPTION OF CONCESSION POTENTIAL FINANCIAL IMPACT Decreased the interest rate charged on

• verdue balance from prime plus 5% to

prime plus 2.5% +/- R350 million per annum in favour of municipalities Rationalisation of Eskom’s Municipal Tariffs from 11 to 3 Rural municipalities will benefit +/- R460 million per annum Changed the payment period on Municipal Bulk accounts from 15 days to 30 days +/- R73 million per month interest to be accrued by municipalities Changed the payment allocation policy to allocate payments to capital first and then the interest Upon payment against the overdue balance, capital component will reduce Allow municipalities to pay connection charges over a period instead of cash up front Improves municipal cashflow

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WAY FORWARD

• Whilst the Eskom concessions are positive, however, do not resolve all the

systematic issues in the industry;

• The Inter-Ministerial Task Team continues to deliberate on the industry

structural and systemic issues with specific focus on the following:- – Clarity on the Executive responsibility of Electricity Reticulation; – Review the current model for electricity distribution; – Review of the current funding model for local government; – Revenue collection and protection; and – Policy reviews or shifts to enable the industry to adapt to the radical changes e.g. renewable energy roles.

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COUNCILLOR SUPPORT AND WELFARE

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CHALLENGES OF 2017/18 UPPER LIMITS NOTICE

• In comparing the Upper Limits Notice issued on 15 Dec ‘17 with

previous Notices, whilst a number of improvements have been introduced a number of short comings resulting in implementation challenges have been identified.

• These challenges as highlighted municipalities include the

following:-

• 1. Capacity Building; and
• 2. MEC Concurrence.

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CHALLENGES OF 2017/18 UPPER LIMITS NOTICE

• SALGA Presidency held a meeting with the Minister of COGTA on 8 May 2018,

followed by a further meeting on 5 July 2018. The following specific recommendations were made to the Minister:- – The current provisions on capacity building in the Upper Limits Notice should be amended by removing the reference to “but excludes tertiary education”; and – The concurrence process by MEC must be harmonized across all provinces through the development of Regulations and/or guidelines.

• In response to the aforementioned recommendations, the meeting agreed to the

following:- – SALGA to conduct an analysis of the impact of the changes in the remuneration regime (annual Upper Limits changes) on councillors and municipalities; – SALGA and COGTA jointly finalise the standardisation of the concurrency process across all provinces; – The package of concerns from the 15 December 2017 Upper Limits notice be referred to the SALGA-COGTA technical team for consideration with the development of the 2018/19 Notice.

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DRAFT COMMISSION REPORT RECOMMENDATIONS

SALGA lobbied the Independent Commission to finalise the Review of system of Remuneration of Councillors, with following key changes:-

• Grade 6 Mayor (Metro) benchmarked against Member of Provincial

Legislature;

• Review of linking the grades and salaries to municipal revenue and

population;

• The role of the Whip should be legislated in consultation with SALGA;
• Concurrence process by MECs to be reviewed;
• The full-time and part-time nature classification of councillors to be

reviewed;

• Compulsory Pension and Medical Aid benefits;
• The extension of the Section 8 (1)(d) Public Office Bearers Allowance to

Councillors;

• Funding model for payment of councillor remuneration to be reviewed.

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Some of the Curators actions since their appointment

• 1. Took full control of all the bank accounts and investments of MCPF
• n the 19 December 2017. The funds are safe;
• 2. Managed to settle outstanding issues with the staff and the union

and now have full cooperation of all staff and the backing of the union of the curatorship process.

• 3. Embarked on streamlining and cost cutting exercise - requested all

service providers to prepare presentations and present the full extent of the services they provide and the fees being charged;

• 4. After discussions with some of the service providers they have

agreed to reduce their charges and fees;

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Some of the Curators actions since their appointment

• 5. Revisited all attorneys instructions;
• 6. Working with the investment advisors, to deal with non-

compliance with Regulation 28;

• 7. Reports filed in terms of court order - Curators reports to placed
• n the FSB and MCPF websites;
• 8. In the process of investigating all allegations of mismanagement,

fraud, theft and negligence - Section 26 trustees have reported matters to the Law Society and the Hawks – recover the R120m.

• 9. Investigating the purchase of vacant property and the reasoning

behind these investments - No development will take place until

• ur monies are repaid.
• 10. Have conducted provincial road shows meeting with members.

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OUTCOMES OF NEC ENGAGEMENT WITH MCPF CURATORS

The NEC noted the report and resolved as follows:

• i. The status of off-shore investments be outlined to the NEC and all

members;

• ii. A report on the investments be provided to all members;
• iii. The webpage on member benefits and growth be activated for all

members to access;

• iv. The issue of the SA Constitution vs the rules of the fund with regard

to withdrawals and other related matters be looked into and an update be presented in the next NEC meeting;

• v. The MCPF investment strategy be presented in the next NEC

meeting;

• vi. The Curators be allowed to do work and to provide updates on

developments to members;

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The NEC noted the report and resolved as follows (Cont.):

• vii. The Presidency and the Chairperson of the Councillor Welfare,

Governance and IGR be mandated to seek additional expertise and act as an advisory committee to the Curators of the MCPF;

• viii. Terms of Reference be developed to govern the relationship

between the SALGA and the Curators of the Fund;

• ix. Regular briefings be held between the advisory committee and the

Curators;

• x. A joint circular be sent to all municipalities to provide explanations on

curatorship and progress made and to further persuade municipalities to review withdrawal from the fund; and

• xi. The matter of pursuing Government regarding the merger of the

fund with Public Office Bearers Pension Fund be pursued as a matter of extreme urgency.

OUTCOMES OF NEC ENGAGEMENT WITH MCPF CURATORS

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UPDATE ON SALARY AND WAGE NEGOTIATIONS

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UPDATE ON SALARY AND WAGE NEGOTIATIONS

Salary and Wage Negotiations have been concluded as follows:-

– An across the board salary & wage increase of:-

• 7% with effect from 1 July 2018;
• CPI plus 1,5% with effect from 1 July 2019; and
• CPI plus 1,25% with effect from 1 July 2020.

– Employees earning a basic salary of R9000.00 per month or less shall receive a further 0.5% increase with effect from 1 October ’18, based on the salaries as at 30 Sept ‘18; – With effect from 1 July ‘18 the minimum wage is R 7324.24 per month; to increase to R 7360.86 with effect from 1 January ‘19; – Homeowner's allowance & medical aid employer contribution will be adjusted by the percentage of salary increases for the 3-year duration of the salary and wage agreement. – The Non-Pensionable Allowance for the GAP market employees will remain unchanged from its current level of R350 and will only be adjusted in year two (2) and year three (3) of the agreement by the same percentage as the salary and wage increase applicable for those.

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APPOINTMENT OF SENIOR MANAGERS

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CHALLENGES Competency Assessment for selection decision making

• Overdue accreditation of the SALGA Competency Assessment Centre by CoGTA,

notwithstanding the decision by JEXCO of 6 July 2016 to do so; Upper limits of the total remuneration packages payable to municipal managers and managers direct reports

• The impact of the upper limits Notice trigger and bottom up pressure, especially

during contract renewal. Undermines retention and succession efforts Lower level management reluctant apply for senior post due to pay cut imposed by the Upper Limit remuneration scales;

• Pay scale determined by competency outcome is problematic as other outcomes of
• ther selection measures are ignored;

APPOINTMENT OF SENIOR MANAGERS

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CHALLENGES (Cont.) Minimum Qualification requirement

• Equivalent/ relevant qualifications should be recognized and provided for in the
• regulations. This would also assist in minimizing the deluge of applications for

waiver in this regard to the Minister; Disciplinary Code

• Dual regime of discipline occasioned by the MFMA and MSA provisions;

Role of the MEC and Head of department at CoGTA provincial offices

• Role of the MEC and certain CoGTA provincial offices - delayed response and the

concurrence conundrum;

• Encroachment of council executive authority on decision making in respect of

contract renewals and appointment of senior managers by directives/circulars issued by COGTA in certain provinces;

• Seemingly parallel contract renewal legislative provisions in respect of the MSA on

versus the Performance regulations and those of the appointment and conditions

• f senior managers

APPOINTMENT OF SENIOR MANAGERS

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APPOINTMENT OF SENIOR MANAGERS

OUTCOMES OF THE MEETING WITH MINISTER ON 5 JULY 2018

• 1. The accreditation of the SALGA Municipal Leadership Competency

Assessment was confirmed;

• 2. COGTA to obtain a legal opinion to provide certainty on involvement of

the role of the MEC;

• 3. The scope of the MSA amendments be extended to address other burning

issues, including those relating to the appointment and conditions of employment of senior managers.

• 4. COGTA to engage NT in order to ensure a seamless amalgamation of the

MFMA and MSA provisions for discipline.

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UPDATE ON CAPACITY BUILDING

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ICIP CREDIT BEARING PHASE 2:

• SALGA is in the process of commencing with the ICIP Phase 2 which is

about helping the councillors with lower qualifications go through a learning journey, certification process of developing portfolios of evidence, assessment, moderation of portfolios of evidence until they are certified as competent in two learning pathways articulating into full qualifications at NQF Level 3 (SAQA ID 58578) and NQF Level 5 SAQA ID 67467 and/or SAQA ID 60529).

• SALGA acts as an implementation agent for the LGSETA;
• Post the implementation of the ICIP Phase 1, a total of 517

councillors indicated that they will be interested in enrolling for ICIP Phase 2;

• Of the 517,a total 417 councillors have confirmed and SALGA is in the

process of issuing municipalities encouraging Speakers to confirm councillors who are keen on enrolling for this programme.

CAPACITY BUILDING

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UPDATE ON REGISTRAR OF LABOUR RELATIONS

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SALGA’S ROLE AS EMPLOYER BODY

• As an employers’ body the organisation is also enjoined by the

Labour Relations Act, Act no. 66 of 1995 (“LRA) in section 100 to provide information to the Registrar of Labour Relations.

• Notice no. 591 was issued on 15 June 2018 informing that the

Registrar of Labour Relations intends to deregister SALGA as an employers’ organisation for non-compliance with sections 98, 99 and 100 of the Labour Relations Act (LRA) and ceasing to function in terms of its constitution.

• The aforementioned intention was also widely captured in the

media.

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SALGA’S ROLE AS EMPLOYER BODY

STEPS TAKEN BY SALGA

• 21 June 2018 SALGA met with the Registrar with a view to ascertain what

informs the said Notice and to resolve the matter. During the meeting the following became evident:- – SALGA had always complied with Sections 98 and 99 of the LRA as attested to by reports of the Auditor-General. – At no stage had SALGA acted outside the scope of its constitution or ceased to function as such. – In response to non-compliance with regards to Section 100 of the LRA, it was established at the meeting that correspondence from the Registrar had not reached SALGA.

• SALGA has since submitted its declarations required in terms of section

100 of the LRA and the Registrar of Labour Relations has confirmed that all requirements have been met.

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RECOMMENDATIONS

It is recommended that the Provincial Members Assembly resolve to:-

• 1. NOTE the key policy advances made by the NEC.

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THANK YOU!