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MUNICIPAL POWERS AND FUNCTIONS THE CHALLENGE OF UNFUNDED MANDATES 19/20 November 2012

MUNICIPAL POWERS AND FUNCTIONS THE CHALLENGE OF UNFUNDED MANDATES 19/20 November 2012. Preface.

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MUNICIPAL POWERS AND FUNCTIONS THE CHALLENGE OF UNFUNDED MANDATES 19/20 November 2012

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  1. MUNICIPAL POWERS AND FUNCTIONSTHE CHALLENGE OF UNFUNDED MANDATES19/20 November 2012

  2. Preface “The devolution of a new function to local government may occur without it being accompanied by the financial and administrative capacity required to sustain it - what is termed an unfunded mandate.” Not an academic dissertation Rather a practical approach to the phenomenon re What does it entail? Why is it a concern? What to do!

  3. 1. INTRODUCTION

  4. 1stTENURE OF COUNCILS Unfunded Mandates a prominent topic Old order laws continued to apply Numerous actions by municipalities* Other spheres not very active – had to fund or take-over function 2003/5 attempts at developing national policy: Policy for the Assignment of Powers and Functions to the Local Government Sphere

  5. 2nd TENURE OF COUNCILS Unfunded Mandates less prominent topic 2007 DPLG published the Guidelines on Allocation of Additional Powers and Functions to Municipalities Old order laws continued to apply Very little progress in correcting Unfunded Mandates Sporadic initiatives by municipalities Initiatives faded over time Financial burden increased

  6. 3rdTENURE OF COUNCILS New politicians and administrators Oblivious of struggle to correct Unfunded Mandates Old order laws continued to apply Very little progress in correcting Unfunded Mandates Initiatives by municipalities faded Financial burden further increased No visible progress - 12 years later

  7. WHY FUSS NOW? Budgets under tremendous pressure – Swartland example* Unfunded Mandatesremain patently unlawful Scrutiny by overseeing authorities* Parliamentary Portfolio Committee A-G: non-compliance rife Jeopardising clean audits LG must pursue solutions or face serious consequences

  8. 2. UNFUNDED MANDATES

  9. DEFINITION Common view - Functions undertaken by a municipality at its own expense, which fall outside its area of competence Not entirely correct - as we will see Try to provide some perspective

  10. ORIGIN Some deny existence Unfunded Mandates a fabrication LG a mere implementing agent Whitepaper on LG* – Conceived the term Warned against burdening LG Proposed decentralisation of powers

  11. ORIGIN ctd ‘The devolution of a new function to local government may occur without it being accompanied by the financial and administrative capacity required to sustain it - what is termed an unfunded mandate’ ‘Unfunded mandates strain local government's limited resources and, ultimately, result in a lack of delivery’

  12. ORIGIN ctd ‘In order to ensure that the combination of decentralisation initiatives by different departments does not overwhelm local government, and that unfunded mandates are avoided, it is proposed that all legislation dealing with the decentralisation or assignment of powers to local government is referred to the local government MinMec for discussion and comment. In addition, provincial government should monitor the extent to which coordination of governmental activities within a municipal area is taking place through the relevant municipality, and report to MinMec in this regard.’

  13. ORIGIN ctd ‘The coordinated decentralisation of powers and functions to local government. This will be achieved through: Avoiding unfunded mandates.’ Parliament’s reaction – introduced sections 9.10 and 10A of the Systems Act

  14. LABELLING MANDATES AS UNFUNDED Not all extra-jurisdictional functions are in fact Unfunded Mandates Confirmed by s 156 of Constitution and others Constitution – offers methods to lawful exercise powers or functions of another sphere – Assignment Delegation Agency

  15. UNDERFUNDED MANDATES Unfunded Mandates - often confused with underfunded mandates Municipalities often act as agent for another sphere: agency agreement – Requires consensus on financials Contract to own detriment not Unfunded Mandate Examples: Vehicle licencing/testing Libraries

  16. GENUINE UNFUNDED MANDATES Mostly historical in nature – they have been inherited through old order legislation Examples: Museums, Nature reserves (may differ from province to province)

  17. SELF ADOPTED UNFUNDED MANDATES Municipalities have taken upon themselves Often with encouragement of other spheres of government Not formally ‘devolved’ Examples: Sport Welfare services – early childhood development, street people

  18. UNFUNDED MANDATES DISGUISED AS FUNDED Introduced through legislation and other legal instruments Purports to assign No formal assignment processes Examples: Disaster management - Part A Schedule 4; Environment - Part A Schedule 4 - coastal management Recently more*

  19. UNFUNDED MANDATES DISGUISED AS FUNDED ctd Draft National Estuarine Management Protocol ‘The identified responsible authority to develop the EMP needs to budget accordingly for the development and implementation of these plans’ Sectoral Disaster Risk Management Plan – Forestry and Fisheries ‘Local government is also charged with responsibilities regarding disaster risk reduction and management under Part B of Schedules 4 and 5 of the Constitution.” The role of Local Government extends beyond emergencies and relief efforts. As government institutions, Local Governments are also responsible for promoting risk reduction measures to reduce incidents of disasters’ Policy For Small Scale Fisheries ‘ …. building capacity and providing training to local fishing communities’

  20. SHARED FUNCTIONS Number of matters in Schedules 4 & 5 shared by national/provincial on the one hand and local government on the other Not unlawful Uncertainty about ambit Unnecessary expenditure where encroachment Legislation or agreement to correct Also major impact on finances

  21. 3. UNFUNDED AND UNLAWFULL

  22. DUTY TO ACT LAWFUL Powers must be exercised conformably with the requirements of administrative justice or legality When a municipality therefore acts outside the ambit of its constitutional conferred powers in pursuance of an Unfunded Mandateit acts unlawful Also duty to correct unlawful acts

  23. RULE OF LAW The exercise of public power must be authorised by law – see Fedsure-case * The discharge of a function outside the municipality’s area of constitutional competence is – unconstitutional and it is most likely that a court of law would find such conduct to be unlawful

  24. RULE OF LAW ctd Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others “It seems central to the conception of our constitutional order that the Legislature and Executive in every sphere are constrained by the principle that they may exercise no power and perform no function beyond that conferred upon them by law. At least in this sense, then, the principle of legality is implied within the terms of the interim Constitution.”

  25. CONSTITUTIONAL IMPERATIVES S. 41 supports Rule of Law- Respect for constitutional status, institutions, powers and functions May not assume any power or function except those conferred May not encroach on jurisdiction of government in another sphere- Fire brigade? Harbours?

  26. STATUTORY JURISDICTION Systems Act A municipality has all the functions and powers conferred by or assigned to it in terms of the Constitution, and must exercise them subject to Chapter 5 of the Municipal Structures Act

  27. 4.POWERS & FUNCTIONS

  28. COMPETENCIES What are the powers and the functions of local government that a municipality may lawfully exercise and perform so as to avert Unfunded Mandates? Time does not permit a proper discussion Briefly touch upon some important principles

  29. SCHEDULES 4 AND 5 MATTERS Constitution designates specific powers and functions to each sphere of government Local Government’s ‘original’ powers are set out in section 156 Executive authority Legislative Authority

  30. SHARED FUNCTIONS See discussion above Powers and functions are not divided amongst the government spheres in water tight compartments

  31. ASSIGNMENT Constitution permits devolution of powers and functions by means of assignment ‘Subsidiarity clause’ – s.156(4) responsibilities allocated to level of government closest to the people not method to accomplish assignment a principle that requires adherence when certain criteria are present

  32. ASSIGNMENT ctd Assignment by agreement  to specific municipalities by s. 99 & 126 Assignment by legislation to individual municipalities by s. 44(1)(a)(iii) and 104(1)(c) to municipalities in general by s.156(1)(b)

  33. OTHER POWERS OF LOCAL GOVERNMENT Financial and fiscal powers - s. 229 Agency functions - s. 238 Delegated powers - s. 238 Implied or incidental powers* - s. 156(5) A municipality has the right to exercise any power concerning a matter reasonably necessary for, or incidental to, the effective performance of its functions

  34. OBJECTS OF LOCAL GOVERNMENT Not confuse with ‘powers and functions’ objects are broadly defined Powers & functions more narrowly or specifically defined s. 156 limits s.152 in light of Rule of Law s. 156 primary means to achieve objects and development duties*

  35. 5. CONSEQUENCES

  36. LEGAL The performance and exercise of these powers and functions are patently unlawful – contrary to Rule of Law Risks – Legal challenges Usurping legislative powers in terms of Unfunded Mandates Qualified audit report

  37. FINANCIAL Budgets under severe pressure - using municipal ratepayers’ money to finance activities of other sphere of government Constitutes irregular expenditure Is a forbidden activity* - see section 164 of the MFMA Recovery from responsible political office bearers and officials

  38. DISCIPLINE Risk of disciplinary action against - Councillor in supporting a motion in council or its structures that conflicts with legislation – Item 2A of the Systems Act – A councillor may not vote in favour of or agree to a resolution which is before the council or a committee of the council which conflicts with any legislation applicable to local government. Official for financial misconduct as envisaged by the MFMA

  39. 6. CORRECTING UNFUNDED MANDATES

  40. Municipality ensure that it acts lawfully Where actions fall foul – must regularise consistent with the Constitution – assignment, delegation or agency Practical issue of governance Disputes or differences – IGR Act Underfunded mandates – re-negotiate terms of agency agreement

  41. THANK YOU KoosCelliers

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