Municipalities and COVID-19: What the national disaster management directions mean for municipal governance

On the same day, the Minister of Finance also issued a notice that exempts municipalities and municipal entities from complying with certain provisions of the Municipal Finance Management Act of 2003 (MFMA) and its Regulations.

In two articles we set out these various measures. What is the scope and content of these notices and directions? Who implements them? What do they mean for municipal governance? An earlier article focused on the service delivery functions of municipalities. The second article focuses on how the directions and regulations impact on governance arrangements.

Council meetings have been suspended

The Directions state that municipalities are still expected to perform legislated functions such as consultation processes, the passing of budgets and the adoption of IDPs. This provision seems to suggest that the council may meet, during the Lockdown period, to pass a budget or adopt an IDP. However, the remainder of the Regulations prohibit the council from meeting because it instructs municipalities to suspend all council meetings during the 21 Day Lockdown period. This does not apply to meetings of the Metropolitan and District Command Centres (see below). This is confusing as it is now not clear what the Regulations mean when it states that the passing of budgets and adoption of IDPs must continue. It is only the council that may pass a budget and adopt an IDP.

Aside from the above confusion, the rationale for the instruction is obvious. However, it does raise the question: does this necessarily prohibit a municipality from convening a meeting in a manner that does not violate the prohibition on the movement of people (e.g. via the internet)? In terms of section 29(1) of the Municipal Structures Act, the speaker of the council decides where and when the council meets. Does this not permit the convening of a meeting via an online platform?

Meetings after the Lockdown

The Regulations already anticipate that after the Lockdown period, but during the national state of disaster, restrictions on the movement of people will continue. After the Lockdown period, municipalities must avoid the convening of meetings attended by more than 100 people. For meetings requiring more than 100 persons to be present, alternative arrangements must be made. These may include viewing the proceedings from different venues (i.e. via the internet), and then casting their votes in the council chamber in groups smaller than 100 people. Alternatively, the votes may be cast in those different venues.

IDPs and budgets

IDPs and budgets must now be aligned with COVID-19 Regulations. Municipalities are required to revise their budgets and when doing so, they should prioritise programmes and projects aimed at containing the spread of COVID-19. These revised budgets must be submitted to the national COGTA before the end of May 2020. However, during the Lockdown period, municipalities are not permitted to convene any public meetings, including any IDP community and public consultation processes.

MFMA Exemption and special adjustment budgets

Another important aspect of the special regime for municipalities during the national disaster was issued on 30 March 2020 by the Minister of Finance. Minister Tito Mboweni issued a notice in terms of section 177(1)(b) of the MFMA. This provision empowers the Minister of Finance to exempt a municipality or municipal entity from complying with provisions of the MFMA if practicalities impede compliance. The Minister exempted all municipalities and municipal entities from complying with any provision of the MFMA or its Regulations that requires specific actions to be undertaken during the period of the national state of disaster. In other words, whatever the MFMA instructs municipalities to do during the national state of disaster, does not need to be done. However, it must be done within 30 days after the national state of disaster lapses or is terminated. Furthermore, municipalities have been given the leeway to pass special adjustment budgets before the end of the 2019/2020 financial year to authorise all expenditure linked to COVID-19 response. 

Emergency procurement

The Directions also target emergency procurement of goods and services by municipalities which must now be undertaken within the framework of the Disaster Management Act. It can also be undertaken in terms of transversal contracts that were finalised by the Municipal Infrastructure Support Agent before the state of disaster. When undertaking the emergency procurement in response to COVID-19, municipalities are required to adhere to National Treasury Regulations and the MFMA Circular 100. Lastly, the emergency procurement undertaken during the state of disaster must be reported to the first council meeting after the lapsing of the National State of Disaster.

Municipal managers granted all executive powers?

The Constitution places a municipality’s executive and legislative powers with the municipal council. The council may delegate executive and administrative powers to its political structures, office-bearers and staff members. This includes committees of the council, the mayor, the municipal manager etc. The municipality has a system of delegation in place for this purpose.

The Regulations insist on a different regime during the Lockdown. They instruct each municipality to make sure that all decisions that would normally require the approval of the council, a committee of the council, or the mayor (whether executive or not), will now be taken by the municipal manager.

The municipal manager may only act on written advice or recommendation of the chief financial officer and with the approval of the mayor or executive mayor. The Regulations provide that municipal managers may only make emergency decisions that cannot wait until after the Lockdown. Any decisions taken by the MM under the regime must be reported and ratified in the first meeting of the council or the relevant committee. This is intended to enable the municipal manager to make swift decisions. Similar powers and related conditions have been given to the chief accounting officer of a municipal entity.

There are a number of problems with this provision. First, it is not clear what the exact intention of the Regulation is. Does it instruct all municipal councils to adopt a resolution to empower the municipal manager as set out in the Regulations? Or does it intend to make the change happen without any council resolution? Some municipalities will (or already have) adopted council resolutions to empower their mayor and/or municipal manager. What happens to those arrangements, particularly if they deviate from the regulations?

Secondly, this Regulation is most likely unconstitutional in any event. There is nothing in the Constitution that permits the national government to change the way a municipality distributes power within its organisation, in particular how it structures the oversight relationship between the council, the executive and the administration. This power is reserved for the municipal council. The council has been elected to govern the municipality, also during a disaster. The only exception could occur when a municipality is subject to an intervention in terms of section 139 of the Constitution.

There is also nothing in the Disaster Management Act that suggests that this is permitted. The Regulation is based on section 27(2) of the Disaster Management Act, which makes no mention of any national powers to amend municipal governance arrangements during a disaster. The Minister may argue that it must be read into the broad phrase “necessary to .. minimise the effects of the disaster” (s 27(2)(o) of the Act). However, this would really stretch the meaning of that provision. It is also not necessary for the national government to impose a governance arrangement on a municipality because the council may do so and then determine arrangements that suit the municipality. The Minister may argue that she must do this ‘on behalf of municipalities’ because municipal councils are not able to convene during the Lockdown. However, the Regulations do envisage councils to continue performing legislated functions such as adopt IDPs and budgets. Is the complete handover of executive power to the municipal manager and the mayor not as important as the adoption of an IDP? Isn't this an issue that is equally important, if not more important for a council to engage with and structure in a way that suits the organisation?

The above argument may come across as the splitting hairs in a time of crisis. However, elected representatives play a crucial role in a time of crisis. They must exercise oversight over the executive and the administration. The disaster may never become an excuse to do away with democracy. It is important that mayors, municipal managers and councils work out an arrangement that (1) acknowledges the need for swift decision making, (2) leaves the council’s oversight role intact and (3) is tailored to the specifics of that municipality. It is not correct for the national government to impose a one-size-fits-all solution on all 257 municipalities. 

By Jaap de Visser & Tinashe Carlton Chigwata

 ** This article was amended on 23 April 2020 to correct a mistake with respect to the adjustments budgets. **

The publication of the Bulletin is made possible with the support provided by the Hanns Seidel Foundation and the Bavarian State Chancellery.