Transcript municipal powers and functions the challenge of unfunded mandates

MUNICIPAL POWERS AND FUNCTIONS
THE CHALLENGE OF UNFUNDED MANDATES
19/20 November 2012
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!
1. INTRODUCTION
1st TENURE 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
•
•
•
•
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
3rd TENURE 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
WHY FUSS NOW?
• Budgets under tremendous pressure –
Swartland example*
• Unfunded Mandates remain 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
2. UNFUNDED MANDATES
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
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
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’
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.’
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
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
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
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)
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
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*
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’
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
Provincial/ National
Local
Provincial Roads (4A)
Municipal Roads (5B)
Provincial Traffic (5A)
Road Traffic Regulation (4A)
Health Services (4A)
Public Transport (4A)
Pollution control (4A)
Environment (4A)
Regional Planning & Dev (4A)
Urban & Rural Dev (4A)
Provincial Planning (5A)
Tourism (4A)
Traffic and Parking (5B)
Municipal Health Services (4B)
Municipal Public Transport (4B)
Air pollution (4B)
Municipal Health Services (4B)
Municipal Planning (4B)
Local Tourism (4B)
3. UNFUNDED AND
UNLAWFULL
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
Mandate it acts unlawful
• Also duty to correct unlawful acts
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
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.”
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?
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
4. POWERS & FUNCTIONS
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
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
SHARED FUNCTIONS
• See discussion above
• Powers and functions are not divided
amongst the government spheres in water
tight compartments
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
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)
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
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*
5. CONSEQUENCES
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
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
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
6. CORRECTING UNFUNDED
MANDATES
• 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
THANK YOU
Koos Celliers