Ad clause 2
Section 9(1) in its current form provides for the assignment of "a power or function" generally to all municipalities in the RSA, in terms of Section 156(1)(b) of the Constitution. (1)

The assignment of a "matter" in terms of Section 156(1)(b) means that the municipalities nation wide would then have executive as well as legislative powers in regard to the "assigned matter". The scope of the legislative power may however be circumscribed in the assignment legislation.

The omission of "generally" as well as the proposed revised heading will extend the application of Section 9 to also include "individual assignments" by way of national legislation, e.g. those in terms of Section 44(1)(a)(iii). The consultation process in these instances will then be limited to national institutions only.(2)

Section 9(2) in its amended form will now extend its application also to "individual assignment" in terms of Section 104(1)(c) of the Constitution.(3)

Ad clause 3
The only other assignment available in terms of the Constitution is to be found in Sections 99 and 126.

The phrase "in terms of a power contained in an Act of Parliament or a provincial act" -
(a) implies a fourth type of assignment, for which the Constitution does not provide; or
(b) is a reference to the proposed Sections 9(1) and 9(2) which already contain the memorandum provision.

The constitution only allows assignments by parliament, provincial legislatures, cabinet members and members of a provincial executive council and not "organs of state" at large. The proposal seems to be in conflict with the Constitution.

Ad clause 4
The proposed Section 10A is a repeat of the current Sections 9(3) and 10(3) - no comments.

Ad clause 5
The introduction of e-technology is to be welcomed. However, the municipality should not alone have the benefit of relaying information electronically. The public should also be permitted to respond to documents and notices by e-mail.

Section 21(4) and the proposed Section 21A(2) should be revised to allow for e-mail responses from the public.

Ad clause 6
The proposed amendment to Section 46 omits the inclusion of certain reports in the annual performance reports. The Municipal Finance Management Act now deals with these reports.

Ad clause 7
The proposed sub-section 3(a) places a duty on the municipal manager to also report prima facie breaches of the Code to the MEC. Not even a councillor who wants to lodge a complaint to the speaker has such a statutory duty and will have to make use of other measures, as was suggested in Van Wyk v Uys No (2001) JOC 8076, if the speaker does not pursue a complaint.

The proposed sub-section 3(a), should rather be included in the code itself.

Ad clause 8
No comment, but it is recommended that some of the provisions in the MFMB on performance management contracts should rather be included in the Systems Act, e.g. the duty to publish the contracts (Section 49 of MFMB - Jan 2003 version), etc

Ad clause 9
The proposed repeal of Section 58 s is due to a similar worded provision in the proposed MFMA (Section 124 - Jan 2003 version).

Ad clause 11
The Bill proposes the introduction of stricter measures before a municipality may consider providing a municipal service through an external mechanism and may well discourage the future use of external mechanisms.

The required feasibility study will be time consuming and costly, but is to be welcomed.

Ad clause 12
The current Section 80 allows a municipality to freely negotiate and enter into a service delivery agreement with a national or provincial organ of state. The Bill proposes in sub-sections (3), (4) and (5) a number of conditions and prerequisites that must be met before a service delivery agreement may be concluded.

It is clear that the conditions and prerequisites are aimed at primarily safeguarding the interests of the other organ of state to whom the execution of a function is (by means of agency)devolved. Whilst such a view is appreciated, it is rather ironic that when powers or functions are assigned to municipalities no such severe conditions and prerequisites are required by law.

The concern about "encroachment" in sub-section 5(b) seems unwarranted, as an agency agreement is a measure to "authorise" controlled encroachment. The proposed Section 5(a) seems to be at odds with Section 238 of the Constitution.

Ad clause 13
The proposed Section 80A is very prescriptive. The proposed terms and conditions of service delivery agreements impacts greatly on the contractual freedom of a municipality.

No similar prescriptions are embodied in legislation where municipalities are to perform in terms of assignment agreements.

Ad clause 15
A service delivery agreement is but one of many (and in many cases much more complex) agreements which a municipality may conclude, yet it was never necessary to introduce legislative measures. It is an inherent duty of the municipal manager as head of the administration.

The introduction of Section 81A is over regulatory.

Ad clause 16
The repeal of Section 82 is necessary as an entire new chapter on municipalities is introduced, i.e. "Chapter 8 A Municipal Entities", from Sections 86B - 86K.

Ad clause 20
Three kinds of municipal entities are proposed, namely

(a) a private company
(i) wholly owned by the municipality
(ii) holding an interest with other municipalities or organs of state

(b) a service utility under the sole control of a municipality
a multi jurisdictional service utility established by two or more municipalities.

A municipality may no longer (if the amendments are approved) participate in the establishment of, or acquire or hold interest in another kind of corporate body of whatever nature, including a trust, as was permissible in terms of Section 82. A fund for the benefit of employees in terms of legislation regulating pension or medical aid schemes is however permissible. This prohibition extends also to municipal entities themselves (see Section 93K). The bill makes provision in clause 32 for transitional provisions where municipalities will be in conflict with these provisions.

The powers and functions of municipal entities may not exceed that of the municipality.

Although these provisions seem rather complicated, it nevertheless provides a better guidance than the current position.

Ad clause 21 - 27
The proposed amendments to Sections 87, 88, 89, 90, 91, 92 and 93, are of a consequential nature due to the substitution of -

- "multi jurisdictional service utility" for "service utility"
- "governing body" for "board of directors"
- "representatives" for "directors".

Ad clause 28
The insertion of new Section 93A - 93K is proposed. These provisions regulate the duties of parent municipalities and the governance of municipal entities.

These provisions are necessary and no comments are offered.

Ad clause 29
The proposed amendment to item 11 of the Code is not really necessary as the current item 11 is wide enough to cover the circumstances foreseen in the proposed sub-items (aA) and (aB). It will however serve a very useful purpose to iterate the municipal manager's responsibility and accountability in terms of Section 55 of the Systems Act.

Ad clause 30
The proposed introduction of a new item 14A is an unwarranted interference in the municipality's right to develop appropriate personnel administration systems in terms of Section 67 of the Systems Act.

Ad clause 31
The proposed modifications to the Code for Councillors are not sufficient to allow the application of the entire code to councilors who are directors. The following items need to be modified or excluded:

- item 5 : full-time councillors
- item 12 A : councillors in arrears
- item 13 : duty of chairperson of municipal councils
- the term "municipal manager".

It is possible that a breach of the proposed code may also constitute a breach of the Code for Councillors by the director in his capacity as councillor. Action taken against the "director" should not prevent any action against the relevant (director)"councillor" in such events.

Ad clause 32
The proposed clause provides for remedial action where municipalities have, prior to the coming into effect of the amendments, been involved in the establishment or acquiring/holding of interest in a non-permitted corporate body, trust or fund.

The provisions are necessary and reasonable time is allowed for rectification.