RESTRUCTURING PROCESS WORKSHOP FOR MERGED AND SPLIT MUNICIPALITIES 1 Introduction Need for Restructuring:  The need to strengthen institutional management by merging municipalities  The need to strengthen Local Government Sector and build stability  The need for strategic planning within restructured municipalities  To promote social cohesion  Sustainable infrastructure development  Good governance. 2 Commitment For the restructuring process to succeed, commitment is required from all role players:  Accounting Officers must take ownership of the process  Accounting Officers must provide leadership to ensure the process is implemented  Heads of Departments must ensure monthly Task Teams meetings are held  Heads of Departments must ensure Task Team reports are tabled with Technical CMC’s  Heads of Departments must provide support and guidance to relevant Task Teams  District municipalities must play the co-ordinating role to ensure processes are implemented  Cogta to provide technical support at Task Team level. 3 Adherence to Section 14(5) Notice A commitment needs to be made by merging and split partners to adhere to the Section 14(5) Notice:     Appointment of staff Disposal and acquisition of assets Use of reserve capital Asset management. Sharing of staff and resources:     Less than 14 months to dis-establishment Concerted effort to be made to share staff No new staff appointments to be made unless of critical nature New programmes must be implemented for the new area of jurisdiction. 4  Each CMC must develop a Road Map setting out key milestones, objectives, timeframes, budgetary requirements and Responsible persons to manage the process  The Road Map to be approved by the CMC and relevant Councils  Road map to include a meeting schedule for the CMC’s  Meeting schedule to form part of the official Council meeting schedule of Committees of Council  Technical CMC’s to meet monthly  Task teams to provide monthly reports to Technical CMC’s. 5 Human Resource Issues  Cogta has provided support in the form of external service providers to draft new organograms  Earnest request is made to relevant HOD’s to arrange meetings with the service Provider to ensure timeous completion of organograms  Organograms must be approved urgently in order that JD’s and job evaluation exercise can be undertaken  Placement of staff cannot commence without approved organogram  Grading of new municipality has to be undertaken • Union involvement is of vital importance. 6 Administrative Matters  By-laws and policies need to be rationalised and adopted for the new municipality  The necessary CMC resolutions for rationalisation and implementation have to be taken  Rates policies have to be drafted to apply to the requirements of the new dispensation  Tariff policy and by-laws need to be drafted and approved 7 New Section 14(5) Notice The proposed new Section 14(5) Notice is being drafted to deal with the following issues:  Implementation of Rates by new municipality where both have been disestablished (sections 32 and 33 of the MPRA)  The transitional arrangement in sections 32 and 33 does not cater for instances where two or more municipalities are disestablished and then amalgamated.  The transitional arrangement as contained in Section 32 and 33 of the MPRA Amendment Act should be applied through a Section 14 Notice.  Budget approval process  IDP approval process 8 Restructuring Grant       An amount of R 39m has been approved by National Treasury for both KZN and Gauteng Provinces for the 2015/16 financial year Of this R3.25m has been approved per merging/split municipalities, excluding the metro A business plan needs to be provided per merger/split before 15/03/15 for this R3.25m Projects which have been identified for this funding/business plan include the following: - rationalisation of by-laws - consolidation of IT/Financial systems - valuation rolls - IDP Process - organograms and other HR related matters - communication strategy No provision has been made for office/Council Chamber buildings As a result of the re-opening of the re-demarcation process, the FFC and National Treasury are currently reviewing the financial assistance and criteria for funding to affected municipalities 9 Communication Strategy  Each CMC has to develop a communication strategy to keep the community informed of the process  Mechanisms must be developed whereby communities can form part of the restructuring process  Communities must be afforded the opportunity to voice their concerns  The following mechanisms may be utilised: - radio - printed media - ward committees - CDW’s - Amakhosi structures - ratepayer organisations - IDP process - budget process 10 Rapid Response Teams  Municipal Rapid Response Teams must be strengthened in the affected municipalities  Service delivery protests and protests around the restructuring must be identified early on, where possible, which could affect the restructuring process in the build up to the elections in 2016  The Cogta Rapid Response Teams will assist where needed 11 Naming and Seat of new Municipality  The process of naming the new municipality has to be commenced with  The seat of the new municipality has to be identified based on sound economic and financial principles  The seat would also have an effect on the organogram as satellite offices would of necessity have to be determined 12 Municipal Viability The municipal Viability of the new municipality needs to be determined.  Financial viability refers to the fiscal state of the municipality  Viability of governance focusses on general local government conditions  Community viability focusses on the demographic, social and economic aspects of the community. Challenges must be identified and addressed. Factors to be determined in Financial Viability will be the following:  The liquidity ratio  External gearing ratio 13 Factors of Viability of Governance  Was the annual budget approved timeously  Was the IDP reviewed annually  When last was the budget related policies of the municipality reviewed  Does the municipality have an annual report  Were the annual financial statements submitted timeously  What was the audit outcome  Institutional stability  Does the municipality have a long term Financial Plan 14 Post Merger Support  Factors that that would affect the post merger have to be identified  Critical challenges that would need support should be identified so that timeous interventions can be implemented. 15 Thank you 16