Intervening in Municipalities

1. Seminar 12 Intervening in Municipalities

2. Provincial intervention: s 139 Four types of interventions: Regular intervention � s 139(1) � draft legislation MFMA: Discretionary �serious financial problems� intervention � s 139 (1) Constitution Mandatory budgetary intervention � s 139 (4) Constitution Mandatory �financial crisis� intervention � s 139(5) Constitution

3. Intervention 1: S 139 regular intervention In terms of s 139 Constitution Decision-maker: MEC for LG (and provincial executive) Discretionary power MEC, Mpumalanga v Imatu Substantive requirements: Failure to fulfil executive obligation: definition of executive obligations? Mnqunu Local Municipality v EC Provincial Government Appropriate steps Issuing directive Court action Assumption of responsibility Dissolution of council

4. Regular intervention: Directives and other measures Directive precondition for later more intense measures � assumption of responsibilities Substantive requirements � identification of executive obligations Procedural requirements � prior notice Court action to enforce obligation where not able / suitable for assumption of responsibility

5. Regular intervention: Assuming responsibility Substantive requirements Procedural requirement: prior notice Procedural requirement: notice to Minister and NCOP and provincial legislature Review of intervention: Minister of Provincial and Local Government Must positive approve within 28 days NCOP Positive disapproval Positive approval within 180 days

6. Regular intervention: Dissolution of council Constitutional amendment in 2003, overrides s 34(3)(b) of Structures Act of 1998 to extent of inconsistency Substantive requirement: �if exceptional circumstances warrant such a step� Dissolution not first intervention measure Procedural requirements: Notifying Minister PLG: can set aside dissolution within 14 days � no need for approval Notifying provincial legislature Notifying NCOP: can set aside dissolution within 14 days � no need for approval

7. Intervention 2: discretionary �serious financial problems� Section 137 MFMA structures use of s 139 Substantive requirement Serious financial problems � defined in MFMA Caused by failure to comply with executive obligation Conditions of s 139(1) Constitution met Decision-maker: MEC for LG Assess seriousness of problems Seek solutions Consider financial recovery plan

8. Intervention 2: Financial Recovery Plan Financial recovery plan Procedural requirements - consultation Substantive requirements � content If imposed, must be applied Further steps if plan has not been implemented: Assumption of responsibility for implementation Dissolving council i t o section 139(1) � procedural safeguards apply Dissolving council i t o section 139(4) (budget and revenue raising measures) � no procedural safeguards

9. Intervention 3: s 139(4) failure to adopt budgetary measures S 139(4) Constitution and MFMA Substantive requirement Failure to comply with legislative duty to adopt budget and adequate revenue raising measures (legislative measures) Decision-maker: MEC for finance (and provincial executive) Mandatory intervention Appropriate steps: Dissolving council Appointing administrator Approving temporary budget or revenue raising measures No prior requirements for approval No post review of intervention, only notification of Minister of LG, provincial legislature and NCOP National intervention in place of province if province fails to intervene or intervenes inadequately Overberg District Municipality v W C Provincial Government

10. Intervention 4: s 139(5)- financial crisis S 139(5) Constitution and MFMA Substantive requirement Serious and persistent breach of obligations to provide basic services Serious and persistent breach to meet its financial obligations Indicators in s 140 MFMA (and admission by municipality) Decision-maker: MEC for finance (and provincial executive) Mandatory intervention

11. Intervention 4: s 139(5) financial crisis Appropriate steps: (a) Imposition of financial recovery plan (b) Other steps if municipality does not implement plan Dissolving council Appointing administrator Financial recovery plan prepared by Municipal Financial Recovery Service (National Treasury) Procedural requirements of consultation Substantive requirements on content Approval by MEC Finance if these requirements have been met No post review of intervention, only notification of Minister for LG, provincial legislature and NCOP National intervention in place of province if province fails to intervene or intervenes inadequately

12. Financial stoppages S 216(2) Constitution