Water Services Provision Decision Making Key Considerations for Councillors

1. Water Services Provision Decision MakingKey Considerations for Councillors JRT Joint Response Team - DWAF, SALGA, NT and dplg

2. Purpose of this presentation The purpose of this presentation is to: • Provide an overview of the purpose and process of s78 assessments • Highlight the role of Councillors in s78 decision making • Elaborate on the points within the section 78 process where Councillor involvement is most crucial • To empower Councillors with information to enable informed decision making

3. What makes water services decision making so challenging? Water is a resource and subject to resource constraints Water has social and economic value People have strong values and opinions about water because of its link to life and livelihoods Water is politically and emotionally highly charged Water services requires multi dimensional capacity Sanitation is highly personal and linked to dignity Technical constraints may limit operational efficiencies

4. Deciding on delivery mechanisms • Every municipality faces challenges related to: • Improving efficiency and effectiveness • Ensuring access through expanding infrastructure • Reducing costs • Providing free basic services and ensuring financial sustainability • Addressing problems related to remote rural areas • Delivery mechanisms is about solving service delivery challenges and problems • It is about finding the best mechanism to address specific challenges and problems • It is about improving the delivery of services

5. A municipality must know its service delivery challenges before starting any process to decide delivery mechanisms What are the challenges we face? What targets must be met? What improvements must be made?

6. Finding the right delivery mechanism means investigating options • The success of a delivery mechanism depends on how well it fits the local context within which it has to deliver services • A delivery mechanism has to be carefully designed so that it: • addresses existing and future service delivery challenges • meets the needs of local circumstances, and • brings the right capacity to deliver the services

7. What is a Section 78 Assessment? • A Section 78 assessment is a process required by the Municipal Systems Act to assess potential service delivery mechanisms for the provision of a municipal service • Section 78 assessments are only required when certain legislated circumstances occur. These circumstances are referred to as “triggers” • It is a strategic decision-making process which takes place BEFORE implementing the chosen service delivery mechanism

8. What is the Purpose of S78? • The purpose of a S78 is to make INFORMEDandGOOD DECISIONS about the most appropriate service delivery mechanism for a particular municipal service • If the right decision is made, consumers will have access to water services that are more: • Efficient • Affordable • Economical • Sustainable

9. S78 helps to assess different options and motivate the right option External Option 2? External Option 1? External Option 3? Combination Internal and External Internal?

10. S78 assessments link to many strategic decisions • The type of information that is collected and analysed in a section 78 assessment links into many strategic decisions: • By law, Councilors approve plans and budgets and set tariffs. This cannot be delegated. The decision about a mechanism has long term implications for these ongoing annual decisions of Council. Budget Section 78 Assessment Tariff setting WSDP Operational Budget (for MIG) WSP Business Plan

11. Why is Councillor involvement crucial? S78 Assessments..: • result in decisions about WHO will provide services to communities, and HOW • are strategic decisions with political implications • involve processes which require community and labour consultation • have long term consequences on Council decisions such as tariff setting and budgeting

12. Section 78 and Councillors • The decision about entering into a contract with an external mechanism cannot be delegated by Council. • Councillors are ultimately THE most crucial stakeholders in the section 78 decision making process, because of the long term implications of the decision! • Nominated councillors who are committed to the process (which can be long) – must be involved from the start of the process and provide regular feedback to the full Council

13. The full council and the Steering Committee • The full Council does not need to get involved in the detail. • Recommended that the Council mandate a steering committee with multi-disciplinary expertise and interest (finance/technical/professional and political) be appointed to drive the process and provide regular feedback to the Council. • The nominated councillors on the steering committee must be involved right from the start of the process (which can be long) - this means understanding the entire municipal area and the challenges it faces • The first step is scoping your area..

14. Before you start assessing mechanisms you need to know: • The area where the services will be provided • The needs that the mechanism should be designed to address • The different service delivery mechanisms (options) ? ?

15. Macro Scoping must look at: These issues are requirements of Section 11 of the Water Services Act which says: “In ensuring access to water services, a WSA must take into account..: • The need for regional efficiency • The need for lower costs • The availability of resources from neighboring WSAs • Alternative ways of providing access to water services • The need to achieve benefits of scale • The requirements of equity

16. Are you assessing a service delivery mechanism for the whole municipal area?

17. Or are you assessing a service delivery mechanism for part of the municipal area?

18. It may even be necessary to look at a cross boundary service delivery mechanism The Institutional Reform process may be relevant for some WSAs in this regard

19. Macro Scoping: Cross boundary infrastructure and Transfer Cross boundary infrastructure provides opportunities to look at multi-jurisdictional water services provider institutional arrangements You may also have to consider infrastructure to be transferred from DWAF. What are the implications of this infrastructure?

20. Macro Scoping: Water Resources If the water resources are inadequate, arrangements to acquire water from neighbouring schemes may be an option. This impacts on options for service delivery mechanisms. No water resource

21. Macro Scoping: Regional Efficiencies Regional efficiencies may be achieved through delivery options for more than one municipal area – especially where there are existing WSPs with capacity to serve large areas.

22. Macro scoping: More than one delivery mechanism Existing regional institutional capacity Dense urban and peri-urban area Shared infrastructure Mountain range It may be necessary to have more than one delivery mechanism in the municipal area. For example where there are remote rural areas, difficult topology, and where there are different service delivery needs / challenges Remote rural area Remote rural areas

23. You need to know your area! Economies of scale Financial issues Water resource issues HR issues Institutional issues Capacity issues Consumer issues Operation and maintenance issues Backlogs Infrastructure issues Levels of service Legal issues

24. Where in the process is Councillor involvement most crucial? • It is crucial that Councillors provide political direction and support to the overall assessment process • They need to be represented on the S78 steering committee or task team and need to ensure effective communication and report back to Council • There are, however, specific points where their input is most needed..

25. IDP WSDP S78 (2) decision S78 (4) decision Macro Scoping T R I G G E R S Status Quo and Needs Analysis Terms of Reference Status Quo and Needs Analysis Report Implement Internal Mechanism Internal Assessment section 78(1) S78 Process OR External Assessment and Feasibility Study section 78 (3) Implement External Mechanism

26. IDP WSDP Councillors and Planning • IDP and WSDP planning is where decisions are made about targets, priorities and projects • Councillors must give direction to and lead development planning processes • They have a role to play in ensuring that these processes are participatory • They should ensure links between s78 and water services plans, policies, bylaws and targets

27. Councillors and Macro Scoping Macro Scoping • Councillors need to determine the overall parameters of the assessment process • They need to know the challenges and the potential solutions to address those challenges • Preferred options need to be identified in terms of how they improve service delivery

28. Councillors input to the Needs Analysis Status Quo and Needs Analysis Report • Councillors have a role to play in articulating needs and in verifying needs that are identified • Councillors should therefore give input to the needs analysis (even if limited to a brainstorm) • Councillors should also gain an overview of the needs identified in the status quo so that these can be verified and expanded upon if necessary. Affordability is key.

29. S78 (2) decision Councillor Decision to Implement Internal Mechanism or Explore External Mechanisms Implement Internal Mechanism Internal Assessment section 78(1) • This is a critical decision. Councillors need to be clear as to the reasons for the decision. • If the decision is to go internal, Councillors must be confident that this mechanism will result in improved service delivery, and HOW this will be achieved • If the decision is to explore external options, Councillors must be able to motivate WHY external options are being explored and why the internal option may not be the best option OR External Assessment and Feasibility Study section 78 (3)

30. S78 (2) decision Where external mechanisms are to be explored, notice must be given to the local community Implement Internal Mechanism Internal Assessment section 78(1) Councillors need to drive community liaison: • Understand community needs and priorities • Ensure effective representation and consultation with communities • Involve ward councillors in community consultation in keeping with chapter 4 of the Municipal Systems Act OR External Assessment and Feasibility Study section 78 (3)

31. S78 (4) decision Councillor Decision to Implement External Mechanism/s External Assessment and Feasibility Study section 78 (3) Implement External Mechanism • The decision to implement an external mechanism is a politically charged decision and may be questioned • Councillors must therefore be able to motivate and defend such a decision • This means understanding the reasons for opting for an external mechanism, including how the quality of services, affordability, efficiency, customer relations and so on, will be better addressed

32. Councillors and Decision making • Councillors are ultimately accountable to ensure service delivery • Experience is proving that participation on a steering committee results in a greater level of trust in the process and accordingly the recommendations made to Council. • Lessons learnt from implementing s78 decisions highlight the importance of political support and Council commitment to the decisions taken • They make ongoing decisions about funding service delivery – setting tariffs, allocating equitable share, and accessing MIG • They also need to make input to and support water services policies such as credit control and debt collection

33. Councillors and Implementation • Once the strategic decision is taken by Council , the administration must be left to implement the restructuring. • If an internal mechanism is chosen this involves change management, allocating sufficient resource and capacity, and entering into performance management contracts. • If an external mechanism is chosen this involves contracts (which need to be procured in terms of supply chain management), negotiated and implemented by the municipal manager and his team.

34. Insufficient Councillor involvement could result in: • Outcomes being pre-empted by consultants and officials (Councillors would ensure that all strategic possibilities are considered) • Exclusive focus on legal compliance without sufficient attention to community and political needs • Choosing an “easy way” • Focus on municipal boundaries and organisational issues, not on the interests of the community • Inadequate consultation with labour, communities, regulators, stakeholders

35. Thank You