NCOP LG WEEK

1. NCOP LG WEEK MR GODFREY LOUWMUNICIPAL MANAGER

2. FUNCTIONS ASSIGNED BY LEGISLATION Municipal Structures Act Section 83 of the Act states the following: • Ensuring integrated development planning for the district as a whole • Promoting bulk infrastructural development and services for the district • Building capacity of local municipalities in its area to perform their functions and exercise their powers where such capacity is lacking • Promoting the equitable distribution of resources between the local municipalities in its area to ensure appropriate levels of municipal services

3. FUNCTIONS ACCORDING TO MUNICIPAL STRUCTURES ACT Specific functions assigned to Eden DM • Integrated development planning for the district, including a framework for integrated development plans of all municipalities in the district • Potable water supply systems (assigned to LM’s) • Bulk supply of electricity (Local municipalities) • Domestic waste water and sewage disposal systems (Local municipalities) • Sold Waste disposal sites, in so far as it relates to: (i) the determination of waste disposal strategy (ii) The regulation of waste disposal (iii) The establishment, operation and control of waste disposal sites, bulk waste transfer facilities and waste disposal facilities for more than one local municipality in the district.

4. FUNCTIONS ACCORDING TO MUNICIPAL STRUCTURES ACT CONT. f) Municipal roads which form an integral part of a road transport system for the district area as a whole g) Regulation of passenger transport services h) Municipal airports serving the area of the district municipality i) Municipal health services j) Fire fighting services serving the area of the district municipality which includes: i)planning, coordination and regulation of fire services; ii) specialised fire fighting services such as mountain, veld and chemical fire services iii) coordination of standardisation of infrastructure, vehicles, equipment and procedures; iv)training of fire officers k) The establishment, conduct and control of fresh produce markets and abattoirs serving a major proportion of the district

5. FUNCTIONS ACCORDING TO MUNICIPAL STRUCTURES ACT CONT. l) The establishment, conduct and control of cemeteries and crematoria serving a major proportion of the district m) Promotion of local tourism for the district area n) Municipal public works relating to any of the above functions or any other functions assigned to the district municipality o) The receipt, allocation and, if applicable, the distribution of grants made to the district municipality p) The imposition and collection of taxes, levies and duties as related to the above functions or as may be assigned to the district municipality in terms of legislation

6. FUNCTIONS ASSIGNED TO DISTRICT MUNICIPALITIES SINCE THE MUNICIPAL STRUCTURES ACT (1988) Disaster Management Act,2002 • Eden DM establishment of Disaster management centre – currently fully operating • Eden DM complies with sections 44, 47, 48 and 49 of the Act • Disaster Management section takes the lead in coordinating disaster responses successfully in the region and continuously strives to improve their service to the communities National Health Act, 2005 • Eden DM delivers the following services according to section 1 of the National Health Act: • Water quality monitoring • Food control • Waste management • Health surveillance of premises • Surveillance and prevention of communicable diseases • Vector control • Environmental pollution control • Disposal of the dead • Chemical safety

7. FUNCTIONS ASSIGNED TO DISTRICT MUNICIPALITIES SINCE THE MUNICIPAL STRUCTURES ACT (1988) CONT. Intergovernmental Relations Framework Act, 2005 • Eden DM have two monthly meetings as follows: • District coodinating forums (mayors & municipal managers) • District Municipal Managers Forum (municipal managers) • Technical Forums: monthly meetings by technical experts within B-municipalities Additional functions performed by Eden DM (non-core) • Social Development (youth, HIV, War on Poverty, Gender, Disasbilities, Food security, Early Child Development Programmes, Substance abuse, Human rights - R4 760 042 – Total expenditure) • Municipal Resorts (Calitzdorp Spa, De Hoek, Kleinkrantz, Victoria Bay, Swartvlei - R3 445 745 deficit)

8. TURNAROUND STRATEGY • Council resolved on 30 March inter alia that a Turnaround Strategy be compiled . The view was also confirmed by the Audit Committee and Auditor General, as reported in the 2010/2011 Management Letter and Auditor General’s Report. • It is common knowledge that District Municipalities in the Western Cape and to a larger extend in the country is no longer financially viable. From 1 July 2006 the District Council levies were replaced with a Levy Replacement Grant and has become commonly known s the Equitable Share. The Equitable Share (ES) received form National Treasury over the last 4 years is as follows: 2008/2009 = R91 254 000 2009/2010 = R104 835 000 2010/2011 = R107 837 360 (note DMA EQS excluded) 2011/2012 = R122 912 000 As per the Abacus information on the system 2012/2013 = R125 699 000 2013/2014 = R129 788 000 2014/2015 = R134 520 000 As published in DORA BILL dated 7 February 2012.

9. FUNDING MODEL • It has become evident that the ES will only increase by 3% year on year • The current salary budget stands at R100 m which represents 57% of the total budget of R172 m • Current ratio of municipality is 0.82:1 (based on the audited figures of 2010/2011 which in financial terms mean, for every R1.00 short term liability, there should R1.00 in cash to repay the liability when they fall due and payable within 12 months. • The ideal ratio for municipalities is 3:1 • In real terms we have to safe R20 m over the next 5 years to bring salary budget below the National Treasury norm of 35% - 38%

10. FUNDING MODEL Cont. The funding model for the macro structure is as follows: • 2008/2009 = R2 6629 580 (information obtained from AFS 2008/2009) • 2009/2010 = R3 178 910 (information obtained from AFS 2010/2011) • 2010/2011 = R5 049 634 (information obtained from AFS 2010/2011) • 2011/2012 = R5 380 000 (Adjustment budget 2011/2012) • 2012/2013 = R5 649 000 (based on 5% increase) • 2013/2014 = R5 931 450 (based on 5% increase) • 2014/2015 = R6 228 022 (based on 5% increase) • 2015/2016 = R6 539 424 (based on 5% increase)

11. FUNDING MODEL Cont. Councillor allowances: With the advent of 2011 local government elections the number seats in Council increased from 30 to 35, whilst District Management Area (Haarlem/Uniondale) has been transferred to George Municipality. The Councillors remuneration is as follows: • 2008/2009=R5 459 521 (information from 30 June 2009 financial statements) • 2009/2010= R5 393 158 (30 June 2011 financial statements) • 2010/2011 = R5 507 839 (30 June 2011 financial statements) • 2011/2012 = R7 256 668 (adjustment budget 2011/2012) • 2012/2013 = R7 619 501 (based on 5% increase from 11/12 as advised by CFO) • 2013/2014 = R8 000 476 (based on 5% increase from 11/12 as advised by CFO) • 2014/2015 = R8 400 499 based on 5% increase from 11/12 as advised by CFO) • 2015/2016 =R8 820 525 (based on 5% increase from 11/12 as advised by CFO)

12. FUNDING MODEL Cont. • Political Appointments • The following political appointments have been made,viz • Personal Assistants x 4 = R 642 384.00 • Office manages x 3 = R 960 000.00 • Chauffeur x 1 = R 160 000.00 • Total R1 762 384.00

13. KEY INTERVENTIONS/AUSTERITY MEASURES IDENTIFIED The following key interventions and austerity measures have been identified by management viz: • Revision of the macro structure – reducing the number of section 56/7 positions from 5 to 3 • Reducing the deficit on the 2012/2013 operating budget from R12 m to R358 00 surplus • Reducing the annual salary increase from 5% to 3% • Aligning the macro and micro structure with the core functions of district municipalities, as prescribed by sections 83 and 84 of the MSA, 1998 Act 117 of 1998, • Reducing the personnel expenditure ratio from 56% to 50% (R100 million to R90 million) for 2012/2013 financial year going forward from then as follows: • 2013/2014 - 50% - 46% • 2014/2015 - 46% - 44% • 2015/2016 - 44% - 40% • Moratorium on the filling of vacancies, except where legal compliance is regarded as an inherent requirement;

14. KEY INTERVENTIONS/AUSTERITY MEASURES IDENTIFIED Cont. • Repositioning of the operations of the municipality to remain within the financial parameters, in terms of affordability, • No overseas travel, except where the full cost is borne by the host destination • Payment of 60% per kilometer in the case of officials and 70% per kilometer in the case of councillors, in respect of trips outside the jurisdiction of the municipality • Matching and placing of all available resources to ensure effective utilisation of municipality • Revisiting the remuneration package of section 56 managers • Combine key positions on the middle and lower levels of the organisation to enhance efficiency • Expedite the benefits that are accrued / associated with the shared services model • Priority is to be given to the refurbishment and replacement of capital equipment within the fire fighting section,

15. KEY INTERVENTIONS/AUSTERITY MEASURES IDENTIFIED CONT • No spending of internal funding will take place on unfunded mandates • Maximise the rental income from resorts and other properties • Conduct a productivity analysis to maximise productivity levels and fit for purpose principle, • Develop a blue print for the management of strategic properties • Develop a 5 year maintenance plan for the replacement and maintenance of moveable assets (property, plant and equipment

16. POSSIBLE SOLUTIONS • WCDM - Water Services Authority – guarantee additional income of R20 m. • Revisit - assignment of powers and functions • Revisit - formula determining Equitable Share • Devolution of powers and functions i.e. Municipal Health

17. THANK YOU