ten years in the making

TEN YEARS IN THE M A K I N G

A History of the Evolution of Metropolitan Government in Johannesburg

RICHARD TOMLINSON

The Greater Johannesburg Metropolitan Council (GJMC) is currently in the ' interim' phase of transition. As mapped out by the Local Government Transition Act (LGTA) No. 209 of 1993, all South Africa's local governments are undergoing three phases of transition from apartheid structures:

�9 The 'pre-interim phase', which prescribed the establishment of local forums to negotiate the appointment of temporary local government council~ that would govern until municipal elections, which occurred in November 1995;

�9 The 'interim phase', beginning with the 1995 municipal elections and lasting until a new local government system has been designed and legislated upon and new local governments are elected; and

�9 The 'final stage', when the local government system is established in 2001.

In Johannesburg's case, the 'pre-interim' phase evolved from the anti- apartheid local struggles in the 1980s that led to the Soweto Accord in 1990 and culminated in a creative period of negotiations and research in the Central W/twatersrand Metropolitan Chamber from 1991 to 1993. The subsequent 'pre- interim' and 'interim' phases have been characterised.by an extended period of uncertainty and political dispute, financial difficulties, and cycles of centralisation, decentralisation and then centralisation again in the powers and functions of the GJMC. The earlier struggles and the GJMC's subsequent difficulties, and indeed the focus on "integrated development planning" in the 1998 White Paper on Local Government (in which government charts the 'final stage'), reflects both the inequities and inefficiencies intrinsic to the apartheid city and a history of political imperatives overriding management concerns.

In order to understand the Johannesburg study it is therefore best to begin at the beginning - to consider the impact of apartheid on the economic, social and administrative difficulties confronting local government today. This helps to explain why Johannesburg and South Africa entered into such a

2 URBAN FORUM 10:1, 1999

protracted and difficult process of local transition. The next section of the paper charts the processes underpinning Johannesburg's move from the 'pre- interim phase' to the 'interim phase'. We are then in a position to consider the financial malaise besetting Johannesburg as well as the organisational review that led to proposals, presently being implemented, for a major restructuring of local government. I conclude with a review of what the 'final stage' means for Johannesburg. The focus throughout the paper is on the metropolitan level of government, since it is this level of government that will survive in the 'final stage'.

Since this is a complex journey, Table 1 serves as a guide to the changing periods of centralisation and decentralisation. Note the reference to greater Johannesburg and Central Witwatersrand are to the same area. The essential borders of the metropolis were introduced in 1986 with the creation of a taxing authority 1 and accepted as the metropolitan border in 1993, but are once again up for re-demarcation, as explained below.

Table 1. Trends in metropolitan centralisation and decentralisation

Racially demarcated local

government bodies

Up to 1994 Rather than merely a period of decentralisation,

from a metropol i tan perspect ive this was essentially a period of disintegration as the

different races operated under different legal

and planning systems, had vastly different

resource bases and different service levels.

Negotiation Phase Central Witwatersrand

Metropolitan Chamber

Greater Johannesburg

Local Negotiation

Forum

1991-1993

1993/94

The 1990 Soweto Accord led to the formation of

the Chamber to resolve outstanding problems

that would lead to the resumption of rent and

service payments, and essentially to work out

how to integrate Metropolitan Johannesburg.

The Chamber was restructured into the Forum

in terms of the Local Government Transition Act

of 1993. The Forum was charged with

negotiating the appointment of a 'pre-interim'

council to govern until local gove rnmen t

elections in 1995. All financial, administrative

and political authority would be centralised at

the metro where the distribution of powers and

functions would be negotiated, then drawn

down by the substructures. Forum proposal of

strong metro with 7 substructures proclaimed in

November 1994.

TEN YEARS IN THE MAKING 3

Pre-interim Stage

Strong metro with seven

substructures

Interim S ta ge

Weaker metro with four

metropolitan councils

Strengthening of metro

Final Stage Dominant metro

Dec. 1994-Nov. 1995

Nov. 1995-Oct 1997

Expected in 2001

Strong GJMC established to

manage process of transition.

This arrangement was never

fully implemented as disputes

about the boundaries of the

substructures led to a

reassessment of the earlier

agreement and a revised

proclamation.

Greater powers and functions

assigned to metropolitan local

councils.

Financial difficulties

encountered by GJMC and the

metropolitan local councils,

problems with redistribution,

and management difficulties

throughout the system

prompted increasing re-

centralisation.

The White Paper on Local

Government prescribes a

dominant metropolitan

government and no

metropolitan local councils.

JOHANNESBURG UNDER APARTHEID

An Introduction to Johannesburg underApartheid

Prior to the election of the National Party in 1948 urban segregation mimicked the colonial city by reserving the more attractive, healthy and proximate parts of town for whites. Africans were forced to the urban periphery, to live in poorly serviced townships or in informal settlements largely devoid of services. After 1948, under apartheid, most well located Indian, coloured and the few 'close in' African suburbs were flattened and their residents forcibly ejected to the urban periphery. The notorious apartheid city was the result. The hollowed-out urban form, with low-density, high-income white suburbs close to the city centre and large, impoverished, sprawling settlements on the urban periphery is usually thought of in physical planning terms. In fact, the


apartheid city soon came to embody a variety of political and economic measures that subsequently came to impact negatively on a sustainable human settlement pattern and, notably, on the welfare of the low-income inhabitants of the cities.

The key features of the apartheid city and their manifestation in Johannesburg circa 1990 are summarised in points I to 9. They should be read in association with Map I that shows greater Johannesburg's urban form circa 1990, with African townships and informal settlements dispersed away from employment centres and areas of white residence.

D~BSONVJLLE

ZAKARIYYA PABK~

!IKE~.OF I:::: : ,~:~ I}/",.~'/{ KATLEHONG

GRASMERE t,/~K~I'S FBrl;I ~' WALKEP,~,LLE

TOKOZA

• White residential areas

~ African residenlial areas

, ~ Highways

[ ] Coloured residential areas

[ ] I n d i a n residential areas

Main roads

0 5 10 I ~ km

[ ] Squatler settlements

~ Industrial areas

Railway lines

Map 1 Johannesburg under apartheid

TEN YEARS IN THE M A K I N G 5

1. Until the 1980s, despi te the existence of a large urban African popula t ion , the unde r ly ing phi losophy was that Africans were temporarily in the cities to serve in the mines and in industries and services located in white parts of town. Once their working life was over they were supposed to go 'home' to the rural areas. This entrenched a migrant labour system that sffil produces a higher male to female ratio and smaller school-going populat ion as a proport ion of the total population in Johannesburg.

2. There were numerous prohibitions on black business and on economic development in the townships. The upshot of this economic segregation and apartheid zoning was that economic activity was forcibly located in white parts of town and created a tax base there. In Johannesburg's case, in 1990 these activities contributed 75 per cent of its rates revenue. 2 In contrast, 95 per cent of the revenue of Johannesburg's four black local authorities (BLAs) came from grants from the Central Witwatersrand Regional Services Council and from central government.

3. Residential segregation created broad sweeps of low-income and impoverished settlements located (with security planning in mind) some distance from employment sites, retail centres, and white areas of residence. The consequence, in 1994, was that the average annual per capita income in Randburg, one of Johannesburg's wealthiest suburbs, was R53 927, whereas the same figure in Soweto, perhaps South Africa's wealthiest black township, was R8 358. Moreover, about 40 per cent of metropolitan households still earn less than R1 500 per month (Palmer Development Group 1998).

4. With residential segregation went a housing delivery system that subsidised low-income whites and to a lesser degree coloureds and Indians, and relegated the black majority to either homelessness or rental status with no security of tenure, as well as extreme over- crowding arising out of shortages of accommodation. The severe housing shortages are reflected in the high incidence of backyard shacks and squat ter se t t lements , and the i m p e r m a n e n c e i n d u c e d by urbanisat ion restrictions and insecure tenure led to poor quality housing. For example, in the Pretoria-Witwatersrand-Vereeniging (PWV) area (roughly corresponding to the Gauteng Province) in the early 1990s, there were some 850 000 'informal' housing units (of a total of about 2,05 million), or 39 per cent of the total. Of all new housing being built in the PWV area, some 89 per cent being built in the early 1990s was estimated to be unauthorised. In similar vein, some 27 per cent of the housing stock was built of impermanent materials, and only about 34 per cent (300 000 of 850 000 units) in the informal housing stock was built of permanent materials. The PWV's urban housing stock is of far worse quality than is to be expected, and this proportion of urban


housing built of impermanent materials is only known to be exceeded by Antananarivo in Madagascar and Dhaka in Bangladesh (Abt 1998).

5. The layout of public sector townships, the only form of urban housing allowed to black families (as opposed to hostels for single workers) involved a sprawling low built density layout. Not only was this layout particularly inefficient and costly for service delivery, so too was the location on the urban periphery. Metropolitan Johannesburg currently has a population of about 3,5 million, with over 2 million living in townships and informal settlements on the urban periphery.

6. Black household incomes and the ability to pay for housing and services were and still are diminished as a result of being forced to the urban periphery and being located in low built density townships. In the first place, transport subsidies became necessary to enable workers to survive at these peripheral locations but, despite the subsidy, black urban workers were paying 9-11 per cent of their household income on transport. This amount is twice the international average and as much as they are paying on housing. Secondly, unemployed, spatial ly isolated household members are removed from knowledge of informal sector opportunities or day-labour opportunities, or find the cost of investing in getting to employment centres too risky when set against the possibility of not finding a job. Thirdly, the sprawling layout of the townships diminishes small business opportuni t ies (when these became allowed) because the market is dispersed over great distances. With the lifting of barriers to black small enterprise, we have seen a relocation of enterprises from the townships to the Johannesburg city centre and the flourishing of many new enterprises there.

7. Urban black households only spend 8-10 per cent of their incomes on housing, whereas white households, by contrast, allocate between 18 and 22 per cent of their budgets for housing. The discrepancy in spending and saving for housing between blacks and whites is striking since elsewhere in the world it has been observed that low-income households tend to allocate a higher proportion of their budgets to housing than do higher income households. This can be explained by the black history of impermanence, subsidised public rental housing that created a false impression of reasonable housing expenditure, and the peripheral location of new housing opportunities that diminishes their marke t values. This has led to hous ing be ing re la t ive ly undervalued by the African community, with little sense that housing represents a secure store of value or a vehicle for the accumulation of wealth. The failure to develop a viable proper ty market in the townships has helped to prevent the emergence of a firm tax base for the institution of local property taxes that could support the provision and expansion of municipal services (Abt 1998). Currently the former


African townships generate about 10 per cent of the GJMC's assessment rates and service charges.

8. The budgetary priorities associated with limited expenditure on African housing were similarly revealed in municipal infrastructure and services, which were generally poorly supplied in the townships and scarce or non-existent in informal settlements. Thus, even in 1998, 62 000 households (23 per cent) in the Southern Metropolitan Local Council had inadequate access to water (defined as a communal standpipe within a reasonable distance) and 86 000 (31 per cent) had inadequate access to sanitation (defined as vent i la ted improved pit latrines) (Palmer Development Group 1998). 3 The cost of upgrading these services is estimated to be R600 million to R700 million. Shortages of water and poor sanitation are a primary contributor to disease and so to lost schooling and lost workdays and thus lost household income.

9. Local government was predicated on the notion that towns and cities could be compartmentalised into separate racial units presided over by racially separate local governments , with their own fiscal, legal, administrative, planning and 'representative' systems. Metropolitan Johannesburg had 13 local government structures. The protests against the illegitimate BLA system took the form of boycotts on payments for rents and services. In most instances households have not resumed paying for services and the legacy of the boycotts bedevils the financial sustainability of local governments today and impedes service delivery.

Local Struggles that Led to the Soweto Accord 4

Community Councils were introduced into African urban areas in 1977 and were given the powers to set rents and expected to administer the townships. They were replaced in 1982 by BLAs, but the BLAs were in an impossible situation - as illegitimate political structures, they were supposed to collect rents and services payments and use this inadequate revenue basis to run the townships. Especially from 1984 there were campaigns to boycott BLA elections and structures.

The Soweto Rent Boycott, eventually carried out by 80 per cent of Soweto's formal rent-paying households, began in mid-1986 in response to the increased service charges, deteriorating services, worsening economic conditions and as a repudiation of the BLA system. It was led by the Soweto Civic Association that was at the centre of a powerful network of neighbourhood structures. The rent boycott was built upon five key demands:

�9 The arrears owed by people who have supported the boycott must be written off.

�9 The houses must be transferred to the people.


�9 Services must be upgraded. �9 Affordable service charges must be introduced. �9 A single tax base for Johannesburg and Soweto must be introduced.

'One city, one tax base' became a national rallying cry. Negot ia t ions to end the boycott be tween the Transvaal Provincial

Adminis t ra t ion (the National Party government), the Soweto People 's Delegation (the negotiating arm of the Soweto Civic Association), and the Soweto, Diepmeadow and Dobsonville BLAs, began in earnest in July 1990 and were concluded three months later.

In the Soweto Accord, government essentially conceded all the Soweto People's Delegation's demands, writing off R516,2 million in arrears owed by residents and establishing a forum to negotiate the implementation of the remaining demands. The Central Witwatersrand Metropolitan Chamber was established for this purpose. The incentive to government for writing off the arrears was that the Soweto Civic Association undertook to negotiate an end to the rent boycott in the Chamber, but it subsequently failed to convince residents that they should resume paying for rent and services.

The Central Witwatersrand Metropolitan Chamber

The Chamber was established by agreement between key stakeholders as a po l i cy -mak ing body that made decis ions by consensus. The init ial membership of the Chamber comprised the Transvaal Provincial Admini- stration, the local government bodies in the greater Johannesburg area and five civic associations. This membership grew rapidly so that it eventually included 53 member bodies, notably all relevant local government bodies, many more civic associations, white ratepayer and residents associations, and, in particular, the now unbanned ANC and other political parties. There were also many observer bodies such as trade unions, educational institutions and organised business, all of which were invited to participate in the Chamber. The Chamber had extraordinary legitimacy as a transitional structure.

According to its chair, Van Zyl Slabbert, the Chamber aimed to 'provide a forum for non-racial and democratic structures of.. . local government and to improve the quality of life of the people by establishing a common tax base and upgrading the quality of essential services' (CWMC 1993:6). In effect, the Chamber aimed to set in place a process of remedying the apartheid city.

The Chamber established a number of working groups in tended to transform the urban system. These working groups set out to prepare detailed proposals while the Chamber, at the same time, responded to immediate crises concerning, for example, violence, land invasions and inappropr ia te development decisions. The greatest progress was made in developing recommendations in respect of the constitutional, institutional and financial


structures of urban governance and the physical and social infrastructure and associated operating services. To a significant degree, the Chamber developed an integrated and sustainable development framework for metropolitan Johannesburg. However, while the Chamber's consensus mode was useful for agreeing on process and preparing developing frameworks, it was of limited usefulness when it came to agreeing on products and seeing to implementation. The difficulty lay in discussing the allocation of powers and functions and the restructuring of a local government system employing 29 000 people in the absence of national guidelines regarding what the new local government system should look like.

The Chamber was not alone in facing such difficulties. During the second half of the 1980s there had been parallel challenges to the apartheid .city and town throughout South Africa. The process invariably consisted of denying the BLA income in the form of rates and services boycotts, and frequently also of consumer boycotts of white-owned shops, and retaliatory deprivation of services. With neither side able to win decisively, the local level result was frequently negotiations. 'Local forums became the schools of the new South African democracy' (Swilling and Boya 1997:171).

These local forums, the Chamber included, were on their own unable to substantively change fundamental aspects of the apartheid urban system. But in 1992-93 those negotiating the Interim Constitution realised that a national framework was needed to guide the local transition via the local forums. The National Local Government Negot ia t ing Forum was created in 1993 compris ing the national government , organised associations of local government, political parties and the ANC Alliance (that included trade unions, the South African Communist Party and the South African National Civic Organisation). The National Forum negotiated the LGTA. Schedule 2 of the LGTA indicated the powers and functions of local government, but as Padayachee (1996), at the time Chief Executive Officer of the GJMC observed, it was a particularly 'esoteric' piece of legislation. For example, Schedule 2 refers to 'Metropolitan promotion of economic development and job creation', 'Metropolitan environment conservation', and 'Metropolitan co-ordination, land usage and transport planning', without providing criteria to distinguish between metropolitan and local. The LGTA provided very little substantive direction; its focus was on process. The LGTA mandated local forums to negotiate locally appropriate solutions consistent with principles of non- racialism, democracy, accountability and one tax base. The task was to establish a new local government structure, the 'pre-interim phase'.

The Greater Johannesburg Local Negotiating Forum

The Chamber was res t ructured into the Greater Johannesburg Local Negotiating Forum in terms of the LGTA. The power balance in the Forum


differed from that of the Chamber. The Forum comprised a statutory side - essentially the pre-existing white local government structures (effectively led by the Johannesburg City Council), and the non-statutory side - where the community organisations and non-governmental organisations led by ANC- oriented white, coloured, Indian and African activists schooled in consensus politics gave way to 'a different breed' of mostly African ANC politicians more accustomed to a confrontational political style. 5 'They insisted on cancelling all agreements and threw out all the previous research. '6

Unlike the wide-ranging agenda of the Chamber's working groups, the Forum's agenda focused on the tasks laid out in the LGTA. The Forum was charged with negotiating the appointment of a 50 per cent statutory / 50 per cent non-statutory council to govern until local government elections. There was quick ag reemen t on a two-t ier met ropol i tan s tructure, wi th the metropolitan government having the capacity to redistribute income across the metropolis. The difficulty lay in agreeing on the powers and functions of the metropolitan and local governments and agreeing on the borders of the governments.

Note that the concern was with the internal boundaries. The Chamber had effectively agreed upon the metropolitan boundary in 1992 when it accepted the area of the Central Witwatersrand Regional Services Council. After a few small additions in 1993, in August 1993 the Chamber decided on the outer boundaries. However, the inner boundaries and the number Of metropolitan substructures (MSSs) proved to be highly contentious. Without any sign of agreement, at the last meeting of the Chamber in the same month the matter was referred to arbitration. The arbitration committee was presented with a number of models that essentially fell into three categories (Mabin 1998):

�9 The ANC model consisting of three or four MSSs motivated by the need for an adequate tax base for each MSS and the redistribution of resources across the MSS

�9 The Democratic Party's suggestion of up to 20 MSSs motivated by the desire for small jurisdictions and greater democracy and participation

�9 The Civic Association of Johannesburg proposal for seven MSSs, which held that a strong GJMC would be able to undertake redistribution and that one needed seven MSSs in order to achieve democratic governance

In September 1994 the arbitrators decided in favour of seven MSSs, following the lines of the Civic Associations of Johannesburg, shown as a in Map 2.

In November 1994 negotiations in the Forum culminated in an agreement to replace the existing thirteen local government bodies with a transitional metropolitan structure and seven MSSs. The MSSs were not financially viable and depended on being part of a metropolitan system that would redistribute resources among them. The CBD was singled out as a special MSS because it


generates a substantial proportion of municipal revenue and has a small population. It would fall directly under the metropolitan council. The other MSSs would fall under MSS councils. The new councillors for metropolitan and MSS councils were appointed from statutory and non-statutory lists on a 50/50 basis (Padayachee 1996).

Until the allocation of powers and functions was dec ided among metropolitan and local elected representatives, all powers and functions were to be vested in the GJMC. In other words, original powers lay with the GJMC which was to manage the change process. The GJMC was also given the task of approving the overall budget for the metropolitan area and of determining minimum levels of service delivery in the area (Emdon 1998). This was a period of relative centralisation in Johannesburg's local government and was quite unlike the processes under way in the other metropolitan areas.

The agreement was announced in Proclamation 24, and on 1 December 1994 the GJMC and seven metropolitan MSSs were proclaimed into existence.

THE PROCESS OF LOCAL GOVERNMENT TRANSITION

Negotiating the New System of Metropolitan Government: A Period of Centralisation 7

The intention was that the GJMC and the MSSs would agree on the allocation of powers and functions and would then design organisations capable of delivering the allocated functions. The GJMC and the MSSs were to be staffed by redeploying personnel from the old local government bodies. This meant that the MSSs would 'draw down' powers when they had their administrations in place and were able to exercise those powers. Each MSS had to prepare and submit detailed management plans to the GJMC that addressed their newly agreed powers and functions and provided the necessary organisa t ional structure, budge t s , ins t i tu t ional and admin is t ra t ive requirements and implementation programme. However, this was not a case of bargaining among equals. In the case of the Eastern MSS, the management plan was superseded by one dictated by the GJMC. s

The GJMC prepared for the change process by establishing:

�9 Interim administrations for each MSS to help prepare management plans for the MSS

�9 AMetropolitan Management Team comprising the chief executive officers of the GJMC and the MSSs, the Town Clerks of the old local government bodies, and strategic support staff, which acted as the 'engine room' of the transition process

�9 A Strategic Support Team in the office the Chief Executive Officer of the GJMC


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�9 A Joint Negotiation Committee comprising political representatives from the GJMC and the MSSs

The Joint Negotiation Committee 'was the pivot of the change process, the decis ion-making clearing house, the political heart of the metropol is ' (Wooldridge 1996:6). It was here that the decision-making occurred; in essence it was where councillors first tried to make sense of Schedule 2 of the Local Government Transition Act. As Padayachee (1996) put it: 'Where does bulk water end and local water supply start? When is planning metropolitan and when isn't it?' Early in 1995 the Committee made good progress in answering such questions, in developing management plans, new organisat ional structures and budgets, and in orientating councillors to local government matters.

The Demarcation Process

Just when the Joint Negotiating Committee was close to reaching agreement, the issue of the MSS boundaries 'hijacked' the process (ibid.). The reason was that the Gauteng Demarcation Board had submitted its recommendations on 7 April 1995 to the Gauteng Premier, but the provincial MEC for Housing and Local Government had expressed disquiet about the empirical basis for the recommendations and asked the Board to consider 'further possible models for internal boundaries' (Morris 1998). It became known that the provincial ANC favoured three or four MSSs and this put paid to progress. No local politician could agree to an allocation of powers and functions without knowing the size and jurisdiction of the MSS (Wooldridge 1996). In other words, the management plans being prepared were of no avail and the an t ic ipa ted staff job ass ignments and locat ions were l ikewise void (Padayachee 1996).

The 22-person Demarcation Board was characterised by major differences of opinion reflecting their party positions (Morris 1998). A sub-committee had set out to explore criteria for boundary demarcation, but these were never formally considered by the Board, which proceeded on the basis of personal opinion and political slant (Mabin 1998). Mabin further documents that the Board's 'recommendation was not based on any scrutiny of detailed service maps or financial information at all - partly because greater Johannesburg had failed to provide such information to the Board' (ibid.:31). The Board's final recommendation, at its meeting in April 1995, attended by only nine members, proposed three MSSs comprising:

�9 Randburg, Sandton and Alexandra �9 Roodepoort and DobsonviUe �9 Johannesburg, Soweto and Diepmeadow


The model was based on pre-existing local governments, the hope that they might be financially viable, and the sense that they best represented 'integrated communities' (Morris 1998:9).

However, the Gauteng Provincial Government equivocated, worrying in particular about where parts of Soweto were to be placed. Finally, the provincial cabinet overruled these recommendations and proclaimed the four MSSs Johannesburg presently has, with their rather extraordinary boundaries. These MSSs serve to locate a large low-income population with a tax base and a pre-existing white local authority (that is, with institutional capacity), and would also serve to ensure an ANC majority during local government elections. The p resumpt ion is that they wou ld be more efficient and economically viable, and that the tax base is more evenly balanced. The four MSSs that were approved at a Cabinet meeting on 10 May 1995 are shown as b in Map 2.

The province ' s rul ing p rovoked considerable opposi t ion from the Democratic Party and the National Party, and were also opposed by the Gauteng Provincial Committee on Local Government. As a consequence a dispute was declared and the matter was referred to a Special Electoral Court in June 1995. The Court ruled in favour of the ANC's four-MSS model for several reasons, one being that seven MSSs do not cater adequately for people living in the low-income south.

Proclaiming a New System of Metropolitan Government: A Period of Decentralisation

Thus it was that on 1 September 1995 Proclamation 42 was issued setting up four (what are now called) metropol i tan local councils (MLCs). The proclamation was to come into effect on 1 November when there were local government elections, along with Proclamation 35 setting out 24 metropolitan functions, with the proviso that the MLC powers and duties were those not included on the list. (The metropolitan functions are the same as those listed in the LGTA of 1993.) Proclamation 35 introduced MLCs with fully-fledged municipal powers, but the debate regarding actual delineation of powers and functions continued into 1996 in the Joint Negotiating Committee.

The Mail and Guardian (3 Nov. 1995) interpreted the dilution of metropolitan powers as reflecting tension between the country's largest city and the new provincial structure (with less administrative and economic resources), and also competition between certain leading ANC figures in the city and province. But in fact there were centralists and decentralists in all parties, with many in the ANC who originated in the civic movement and were decentralists at heart. Perhaps the strongest commitment to centralisation came from the old Johannesburg City Council officials. It is often observed that the GJMC is the 'JCC in drag'.


The MLC populations, rates revenue per person and revenue specifically from business are shown in Table 2. The Western MLC is in a particularly disadvantageous position due to a dependence on the declining gold mining industry. The Southern MLC is par t icu lar ly d e p e n d e n t on revenue from business due to the fact that only 38 per cent of households are paying for rates and services. However , the expected boon to the Southern MLC of including the inner-city rates base has not materialised as inner-city property values have fallen sharply. The Eastern MLC, which includes the Sandton commercial and retail node as well as the city's elite residential areas, is far better off than the other MLCs. The revenue per person particularly favours the Eastern MLC, which should be kept in mind when w e later consider the rates boycott by businesses and households in Sandton.

Table 2. Comparison of the populat ion and rates base of the four MLCs 1997

Eastern Southern Northern Western MLC MLC MLC MLC

Population 649 229 Revenue per person R939,07 Revenue from business / R382 090 000

As per cent of total rates income 61

1 617 936 684 565 553 967 R342,93 R519,91 R214,57

R327 170 000 R147 820 000 R27 432 000

76 49 28

Elections

The GJMC was responsible for the November 1995 elections, Johannesburg's first democratic local government elections. It was estimated that up to 1,78 million people could vote, there were 1,49 million registered voters, and 44 per cent did vote. Sixty per cent of the seats were allocated for ward candidates and 40 per cent of the seats for party candidates. The party candidates were elected on the basis of proportional representation. The allocation of seats to MLCs within the GJMC reflected the size of the MLC, as shown in Table 3.

Table 3. Councillors and Wards

Structure No. of Councillors Proportional Ward No. of Wards

Metro 50 20 30 Eastern MLC 60 24 36 36 Northern MLC 50 20 30 30 Southern MLC 70 28 42 42 Western MLC 40 16 24 24

Total 270 108 162 132


The total number of seats (ward and proportional representation) won by political parties is shown in Table 4. While the ANC majority in all MLCs is clear, the critical feature lies in the fact that the ANC does not have a two- thirds majority in the Eastern MLC, from which most redistribution is supposed to occur. The LGTA requires a two-thirds majority when a MLC passes its budget and the Eastern MLC's budget has been hotly contested between the ANC and the Democratic Party. The latter claims that the MLC is failing to maintain essential services and the ANC supports metropolitan efforts to redistribute income. As a consequence of deadlocks between these two parties, the MEC in the Gauteng Provincial Government responsible for Deve lopmen t P lann ing and Local G o v e r n m e n t has had to assume responsibility for approving the Eastern MLC's budget in each of the last two financial years.

Table 4. Political representation

Structure ANC DP NP Remainder

Metro 31 6 12 1 Eastern MLC 32 19 63 Northern MLC 29 8 13 Southern MLC 53 1 124

Western MLC 21 1 17 1

Implementing the New System of Metropolitan Government: A Period of Decentralisation

The consequence of the boundary dispute was that the transition process, already long drawn out, still had some way to go. Boundaries and powers and functions might have been determined, but the new administrations had to be constituted and 29 000 staff still had to be redeployed.

At the outset a set of guiding principle were adopted for the restructuring process which emphasised the GJMC's strategic vision and the values and frameworks underlying the Constitution and the new Labour Relations Act. These included a concern for a more gender and racially representative management structure. The vision itself was the product of a process undertaken in May 1996.

The formal structuring of the GJMC and the MLCs occurred through a clustering process. The respective Executive Committees identif ied the Councils' critical focus or functional areas. These were clustered together to


form strategic clusters. The posts of Strategic Executive Officers were created to head each cluster and were advertised in the press and the various posts were filled by June 1996.

Workshops were held for every cluster to design the functional groupings - the sub -c lu s t e r s - in each cluster . This was d o n e t h r o u g h i n t e n s i v e w o r k s h o p p i n g wi th Section 59 C o m m i t t e e s 9 Chairs , the .new Strategic Executives, union representatives, senior line managers and a r a n d o m cross- section of staff. The position of Executive Officer was created to head each sub- cluster and, once these appointments were in place, the staff was redeployed from the old administrations into the GJMC and the MLCs. For m a n y staff this was a period of considerable anxiety and the GJMC went to considerable effort to communicate the process of organisation transformation and to address individuals ' concerns.

The upshot is apparent in Table 5, with the number of employees having d ropped (especially wi th the loss of m a n y experienced senior staff to the private sector). There are five chief executive officers. The second tier of managemen t has a strategic executive officer heading each 'cluster ' . There were 31 strategic executive officers. The third tier of m a n a g e m e n t has an executive officer heading the sub-cluster. There were 222 executive officers. The fourth tier of management is the managers. There were 537 managers. Only then do we reach operational staff. The organisational structure is the same in every cluster regardless of w h e t h e r the cluster war ran t s it. The relevance of the Table will become apparent later, as it has been held that the new local government structures are ve ry top heavy and that there is an extraordinary duplication of posts.

Table 5. Staffing within the GJMC and the MLCs

GJMC Eas t e rn Northern Southern Western Total MLC MLC MLC MLC

CEO 1 1 Strategic Executives 9 5 Executive Officers 59 40 Managers 208 89 Other Staff 10 791 2 327 Total 11 067 2 461

1 1 1 5 5 6 6 31

39 44 40 222 72 81 87 537

3 970 6 201 2 212 25 501 4 086 6 332 2345 26 296

Source: E m d o n 1998


FINANCIAL MALAISE 1~

Financial Disarray

In October 1997 the Gauteng Provincial Government intervened in the financial affairs of the GJMC and the MLCs because the councils were experiencing a negative cash flow of R130 million per month. In addition, the metropolitan account to ESKOM for bulk electricity supply was three months in arrears (approximately R300 million). The five councils were heading for an unfunded position of R2 billion by the end of the 1997/1998 financial year, although this position would not have been reached as the councils would have been insolvent by the end of February 1998.

The reference to the five councils rather than to the finances of the GJMC and each MLC is because

... the operating budgets of the five councils were done on the single- balanced budget principle, that is, on the assumption that the aggregate operating budget of the councils balanced, and that any surpluses on the budgets of particular councils would be applied to offset deficits on the budgets of others. The metropolitan levy would be used as the mechanism through which the required inter- council transfers would be effected. (Lucas Opperman, attachment to Auditor-General Report 1997:91)

An explanation for this parlous financial situation requires reference to long- term causes and other more immediate considerations. Perhaps the most overarching long-term causes were the indebtedness of the councils together with their failure to exert credit control. At the time of writing, December 1998, the total outstanding rates and services charges to the five councils was R2,3 billion.

The most celebrated boycott was the partial rates boycott in Sandton (where many households and businesses continued to pay the old rate or the old rate plus 20 per cent). The introduction of a uniform assessment rate throughout the metropolitan area and the creation of a metropolitan council with the ability to impose levies on the wealthier councils is intrinsic to the realisation of 'one city, one tax base'. However, the manner in which the uniform rating system was imposed provoked a boycott by large corporations and high- income residents in Sandton that proceeded to the Constitutional Court where it was overturned on a split decision in October 1998. When the GJMC imposed a uniform assessment rate throughout the metropolitan area, the Sandton rate went up from 2,65 cents in the Rand to 6,45 cents. Contributing to the opposition was the fact that the GJMC imposed a 'metropolitan levy" on the Eastern MLC that in some years took more than 50 per cent of the rates collected.


The politics of rates increases have proved to be particularly onerous. The Sandton rates boycott cost R220 million, but the outs tanding rates and services payments in the Southern MLC is R790 minion. Democratic Party politicians in the northern suburbs claim that contrary to how it is presented in the media, the metropoli tan levy is not being used for redistributive purposes. This is evident in the fact that the operating budget of the Southern MLC has dropped in recent years, instead it is being used to pay off the debts incurred by the old Johannesburg City Council. They also claim that Sandton is paying for the ANC's unwil l ingness to bear the political cost of exerting credit control for services.

Table 6 shows repayment levels in different suburbs of the GJMC. Although repayment levels in areas formerly designated for Africans are uniformly low, the total billing for these areas represents only 7 per cent of aggregate billed income. In cash terms, therefore, the implicat ions of businesses and high income households boycotting services is particularly hard felt, especially as repayment levels used to be close to 100 per cent. The mid-level, Lenasia, is an Indian suburb. In regard to the low-income areas, the question that might be asked is wha t proportion of households in the south could afford to pay for their rates and services were politicians to aggressively turn the services off? A prel iminary measure of affordability might be the 74 per cent payments levels achieved in Soweto by ESKOM, which is k n o w n to come in and turn off the electricity supply if households fail to pay.

Table 6. Repayment levels in 1997 in the GJMC

Orange Farm 5 per cent Doornkop 35 per cent West of Soweto 14 per cent Lenasia S/E 55 per cent Alexandra 21 per cent Johannesburg (EMLC) 85 per cent Meadowlands 24 per cent Sandton 87 per cent Dobsonville 25 per cent Johannesburg (SMLC) 89 per cent Soweto 27 per cent Johannesburg (NMLC) 92 per cent Diepkloof 30 per cent Randburg 94 per cent Ennerdale 34 per cent Roodepoort 98 per cent

Source: Lucas Opperman, attachment to A u d i t o r ~ e r a l Report 1997, p. 92.

Unfortunately, the councils have consistently budge ted on the basis of 100 per cent payments of billings for rates and services, despite repeated cautions from the Audi tor -Genera l , a consequence of w h i c h was the dep le t ion of cash reserves. Price Waterhouse et al. (1998a) comment on a 'culture of abundance ' on the part of both officials and politicians, believing that taxes can be raised to pay for p lanned expenditure, and a view that amounts included in the budget represent a r ight to spend, regardless of need, changing circumstances or


actual income. Indeed, Price Waterhouse et al. continue that the duplication of posts and the lack of performance measurement within the councils led to a lack of accountability, including a lack of accountability for budgets (ibid.).

More immediate causes have been poor management of the finances arising from the creation of the MLCs, and then poor financial management by the councils. In the first place, the transfer of responsibility for billing to each of the four MLCs with effect from I July 1997 disrupted what had been an integrated cash management system. Nowadays, payments for services can take up to six weeks to reach their destination. In the second place, the councils operate a General Account for revenue and not a specific account for particular services, which does not promote good financial practices and distresses banks when it comes to lending for capital investment for a particular service.

The GJMC consequently sought offshore funding and negotiated a loan with Sumitomo Bank, but the loan was deemed illegal by the DepartuLent of Finance. n The GJMC had been under taking capital expendi ture from operating income while in anticipation of the above loan and after it was turned down the GJMC was forced to undertake current expenditure from reserves, further increasing its financial difficulties and lowering its credit rating.

The major sources of income and expenditure for the GJMC and MLCs are shown in Tables 7 and 8.12

Table 7. Income (R billion)

Electricity 1,96 Water, sewerage and refuse 1,49 Assessment rates 1,42 RSC levies 0,65 Sundry income 0,80 Metropolitan levy 0,35 Less - Working capital provision (0,49) Total 6,18

The income estimated for the year is R6,18 billion, made up primarily from services charges, such as electricity, water and sewerage, as well as assessment rates and RSC levies. Only R93 million comes from central government in the form of grants and over half of that takes the form of housing subsidies. Essentially, Johannesburg is not receiving financial assistance from central government. The working capital provision was created in the current year due to the fact that payment levels have been less than 100 per cent.


Table 8. Operating Expenditure (R billion)

Salaries and allowances Bulk purchases (electricity & water) General expenses, repairs & maintenance Capital charges Metropolitan levy Less - Internal recharges 13 Total

1,89 1,92 2,35 1,10 0,35

(1,43) 6,18

Planned capital expenditure for the fiscal year was initially R1,7 bilhon, but due to the unavailability of external funding, this programme was reduced to only those items for which contracts were in place, an amount of R581 million, which will be financed from operating income (essentially from the collection of a proportion of debtors outstanding). Councils have traditionally financed a large proportion of their capital expenditure from long-term loans and aimed to repay their loans over the life of the asset. The present unwillingness of local financial institutions to provide loans, despite the fact that the proportion of operating income servicing debt is only 17 per cent, is causing significant difficulties.

October Notice 1997 / Committee of Ten

In October 1997 a notice 14 was issued by the provincial MEC responsible for Development Planning and Local Government creating a management committee, known as the Committee of Ten to deal with the financial crisis and undertake a number of specified financial and administrative matters. It was composed of ten councillors, two from each local council and two from the metropohtan council and assisted by a technical task team 'experienced in institutional, operating and capital budget restructuring'.

The following tasks had to be completed within three weeks of the Committee of Ten been being set up by the Notice.

1. Revise the 1997/1998 operating budgets of the five councils in order to provide for a working capital reserve sufficient to fnance the anticipated shortfall in payment of rates and services charges for the 1997~1998financial year.

This meant that the councils had to make provision for bad debts, which was done by reducing the budgeted operating expenditure to balance with the amount of income likely to be collected.

It was estimated that the amount of revenue that would not be collected would be R494 million. This was based on an analysis of existing payment levels and by making an assessment of the reahstic amounts that could be

22 U R B A N F O R U M 10:1, 1999

generated by implementing effective credit control measures. The assumption was that an average current collection rate of 94 per cent could be achieved, and significant amounts of outstanding debt at the start of the 1997/1998 financial year would be collected.

A major part of the reduction of the operating budgets was achieved by removing the provision for filling vacant posts. On this basis, the operating budget was revised and is R6,18 billion. Despite the revision, the projected shortfall at the end of the 1997/1998 financial year was approximately R336 million, caused largely by an overestimate (in the original budget) of the proceeds from the sales of electricity.

2. Revise the 1997/1998 capital budgets of the five councils to provide for already committed projects only.

As already noted, the five capital budgets were reduced from a planned total of R1,728 billion to R581 million by adopting a very narrow definition of 'committed' capital expenditure (only if a contract was in place was a project accepted as being 'committed').

3. Formulate credit control policies and practices within two weeks of the Committee's establishment to enable officials of the GJMC and the substructures to collect~recover outstanding debts within the operating budget cycle (12 months).

The Committee of Ten approached the issues of credit control holistically, from the delivery of the service, to meter reading, compilation of the account, delivery of the account, improving arrangements for payments and dealing with queries, to action for failure to pay including termination of service and attachment of property. But most importantly, the Committee of Ten also made a decision to start cracking down on defaulters and being prepared to cut off services. The MLCs started to take action against non-payers by obtaining judgments, attaching properties and terminating services. This had the effect of raising payment levels from an average of 85 per cent in October 1997 to 92 per cent in March 1998 for the whol.e metropolitan area. 15 This approach has also required the development of a policy to identify and support those who are genuinely indigent, as opposed to those who simply choose not to pay.

4. Determine proposals and the conditions on which existing short-term capital finance as well as the under-funding of the 1996/1997 capital programme of the five councils are to be converted into long-term loans.

At present , the l i qu id i ty of the five councils depends on the use of approximately R400 million of 'call bonds'. Because of the expense of these bonds, attempts have been made to turn them call bonds into conventional medium-term loans (between five and ten years maturity); none of the domestic f inancial inst i tut ions, however, are wi l l ing to make fur ther


unsecured loans to the councils and the Department of Finance is opposed to foreign borrowing.

5. Determine proposals and conditions on which the committed capital budgets of the five councils for the 1997~1998financial year are to be financed.

On the premise that the R581 million capital expenditure could not be financed from loans, it was assumed that the total amount of this expenditure would have to be met from operating income - essentially from recovering sufficient debt outstanding at the start of the financial year. The consequence will be that over the last two financial years the councils will have incurred capital expenditure of R1,8 billion, of which only a quarter will have been financed from medium-term loans - the remainder will have come from current income and cash reserves.

Certain matters set out in the October Notice related to improving administrative systems. Of particular interest is the fact that the October Notice also covered matters relating to the organisation, structure and functions of the councils. The Committee of Ten thus also took ownership of the Organisational Review that had been started by the councils prior to October 1997. The Notice required that the Committee must:

�9 Analyse all existing functions performed by the councils with a view to reducing operating costs

�9 Produce mechanisms for an effective, economical and more efficient performance of the functions, including effective utilisation of personnel of the five councils and the management of their affairs

�9 Identify the core functions that need to be performed by local government, including those functions that will generate income/profit for the local authority and those that can be outsourced

The effect of these requirements was to bring the Organisational Review within the scope of the technical task team serving the Committee of Ten.

April Notice 1998 / Committee of Fifteen

The April Notice 16 changed the size of the political committee from ten to fifteen by including opposition parties. Senior management people from the councils were also incorporated within the technical task team (previously it had only been consultants) and the role of the Committee of Fifteen was widened.

Three tasks are significant for our purposes, in so far as they show the GJMC rushing headlong towards what might well be termed a provincially imposed, but willingly adopted, structural adjustment programme.


The first is that the Committee must develop and implement programmes and projects according to the policy on public-private partnerships, and finalise partnerships in respect of fleet management, the fresh produce market, airports and other functions that the Organisational Review process had identified as being able to be outsourced. The Committee should also identify projects, particularly land and buildings and other assets of the council, that might be sold in order to generate revenue.

The second is to finalise and implement the change management plan 'to ensure the performance of existing functions in a cost effective manner ' , and to identify core and non-core functions. The Committee of Fifteen has ins t ructed the consul tan ts to implemen t Opt ion 3 (described in the Organisational Review below). Agreement has been reached to implement the recommendations proposed in respect of the top two or three tiers of the councils as soon as possible, and then to imp lemen t the r ema in ing reorganisation over a longer period.

Finally, the Committee must compile a balanced operating budget for 1998/ 99 and also a realistic five-year capital and operating budget, endeavour to obtain capital finance for the unfunded capital programmes of previous financial years, and attempt to reduce the turnover rate of debtors to 6-8 weeks.

Transformation Lekgotla

The October and April Notices both had a six-month duration. In order to cont inue wi th the imp lemen ta t ion of the f inancia l reforms and the recommendations of the Organisational Review, an ongoing Transformation Lekgotla has been appointed. The Transformation Lekgotla is a section committee, which means that it 'has delegated powers to decide on key policy issues in relation to the transformation process' (iGoli 2002, p. 29). In addition, a new 'super chief executive' with experience in privatisation has been appointed (Ketso Gordhan) as well as a transformation specialist (Pascal Moloi). Aprocess of restructuring the top tiers of the metropolitan government and incorpora t ing the funct ions of the MLCs into the met ropo l i t an government is now under way.

ORGANISATIONAL REVIEW

The origin of the Organisational Review lies in the redeployment of staff into four MLCs and the GJMC. It had always been intended to evaluate the effectiveness of these structures once there was experience of their operation, and a decision was taken by all five Councils to appoint consultants to begin this review in August 1997. However, the timing of the Review coincided with significant perceived problems in local government and preceded the restructuring of local government that would eventuate as a result of the


implementation of the White Paper on Local Government. The significance of the Organisational Review was therefore far greater than might otherwise have been the case and, as has transpired, the review has led on to the five councils anticipating the White Paper, envisaging the forthcoming changes, and beginning to implement them in advance. This change process has been facilitated by the fact that all five councils are controlled by the ANC.

The Organisational Review identified far-reaching problems with the current local government administration and proposed sweeping changes. The consulting consortium undertaking the Review was not asked to and did not examine the background and context to Johannesburg's local government's difficulties, and relied upon interviews with staff and frequently inadequate documentation provided by local government personnel. They none the less felt empowered by their model of local government to advance yet another restructuring of Johannesburg 's local government system. Johannesburg, one staff member observed, has undergone nine organisational reviews and restructurings in eight years (Emdon 1998). If a trace of scepticism is revealed, it is not because such a restructuring is unnecessary, nor because the consortium failed to identify serious problems. My concern, instead, centres on the understanding of the problems and the means through which alternative models of local government are identified.

In the first instance, while not seeking to adopt a blaming tone, the consor t ium emphasises that inept managemen t is the main cause of Johannesburg's local government problems (Emdon 1998). While conceding that a lack of management is a critical problem, there are, in addition, other problems:

�9 Local government was trying to resolve many years of urban apartheid. �9 Johannesburg had inherited considerable outstanding debts and an

ongoing rates and services boycott (Emdon 1998). �9 The ongoing process of negotiat ion since the Soweto Accord had

essentially led to a 'paralysis' of local government between 1990 and 1996 and considerable disruption due to the loss of many skilled staff (Mabin 1998).

�9 The debacle sur rounding the number of substructures and their boundaries significantly contributed to the paralysis (ibid.).

�9 The hiatus arising from another restructuring may duplicate many of the difficulties experienced in the past.

�9 The economic transformation associated with South Africa's globalisation, pressures on employment, the move of offices and manufacturing enterprises to the northern suburbs, and the decline of the inner city and related loss of rates income would have occurred anyway, and better management would have served only to ameliorate the posi t ion (Tornlinson 1999).


With such problems persisting, the question is whether the consortium's model of local government, implemented as it will be by a centralised metropolitan government, will necessarily do better. There are three issues here. The first concerns the model that guided the thinking of the consortium that, it seems, suffices in place of any consideration of the mandate and the strategic vision of local government (Swilling 1998). The second concerns the quality of leadership likely to be found in the new metropolitan government and the capacity of the officials. As Morris (1998:19) notes, the concern is that within a centralised system, the impact of failures in a few areas will be felt all the more keenly. This is not a problem that the consortium appears to have considered, despite the concerns that have been raised regarding leadership and capacity over the years. The third concerns the anticipation of unforeseen consequences. For example, based on his study of the periodic reorganisations of the governments of Paris, New York and London over the last century, Savitch (1994:567, 568) comments that 'the problem of reorganisation is not its weakness but its strength and contradictory effects ... reorganisation produces outcomes that are difficult to predict. More said, reorganisation is fraught with conflict that can reverse the intent of decision-makers.' One has the sense that far-reaching changes are being implemented with scant regard for context, history and the future, in the confidence that a simple model will show the way.

In the ensuing paragraphs I will address:

�9 The local government model employed by the consortium �9 The problems that were identified in terms of the model �9 The restructuring option selected for the future

Local Government Model

The consulting consortium's local government model is based on two key distinctions, those between core and non-core activities and between client and contractor roles. The consortium also employs an implicit assumption, namely the need to centralise powers at the metropolitan level. This assumption accords with the White Paper and disregards the considerable debate surrounding the merits of decentralised local government with financial redistribution between local governments being undertaken by a higher level of government.

In regard to core and non-core activities, the idea is that Councils should focus on their core activities and non-core activities should be 'cut out or externalised'. Core activities are defined as those required by legislation. It is assumed that these will typically be activities where the local government is the regulatory authority and/or the provider of last resort. In the case of core activities, the consortium argues that whereas the Councils' obligation is to ensure delivery of the relevant service, the same is not true of actually


delivering the service. Service delivery can and often should be outsourced. The consortium urges that the lack of financial resources makes it imperative that the Councils dispose of non-core activities as soon as possible. Examples provided are the Zoo, Rand Airport, the produce market and the Civic Theatre. If the non-core activities do not generate a surplus then they should be discontinued. The Councils should only consider continuing to provide profitable non-core activities.

In regard to client and contractor roles, the key role of local government is that of a client. This involves

providing an overall vision for the metropolitan area... Developing and maintaining an effective corporate framework of rules within which all officers and committees must operate.., interdepartmental co-ordination.., business planning.., strategic service development - which includes setting policy objectives for services, obtaining users' views, setting service standards and performance measures, and identifying and planning ahead for major changes to services ... the day to day management and monitoring of performance, responding to complaints and representations and remedying the performance of the provider ... (Price Waterhouse et al. 1998a:8)

The contractor is the actual service provider who deals directly with customers. The contractor may be either an in-house unit or an external contractor. The consortium favours the use of public-private partnerships.

Such raw criteria do not provide consistent insight into the role of local government and the type of city that one hopes to generate. It is unlikely that the structures of government can be drawn up independently of a concern for local government 's mandate and vision, and of an understanding of the economic and political context within which the local government operates. To define core activities in terms of the legislation is to abdicate the broader responsibility of the local political leaders.

More caustically, Swilling (1998:40) has commented that the consortium 'have recommended a "purchaser-provider" contract management model copied directly from Thatcherite Britain. Now the laughing stock of public management practices ... this model rests purely on the assumption that everything can be managed by contracts, financial controls and performance management ...'

Problems Identified

The two distinctions between non-core activities and between client and contractor, and also the presumed benefits of metropolitanisation, underlie the problems identified by the consortium during the Organisational Review.

28 U R B A N F O R U M 10:1, 1999

1. The structure was 'unrealistic in terms of the number of posts and the levels of managemen t ... and they were never going to be achievable in practice as they are unaffordable" (Price Waterhouse et al. 1998a:4). Each cluster and sub-cluster has the same structure regardless of the service provided and the differing demands levied upon it. There is no evidence to suggest that the managemen t structures are based on any assessment of workload or need. The support services were designed in isolation from the product ive services they were des igned to support and 45 per cent to 50 per cent of the execut ive officer and strategic execut ive appointments are for suppor t services. The international norm is closer to 15 per cent.

2. There are problems of duplicat ion within councils in respect of research, a d m i n i s t r a t i o n and p l a n n i n g ; and b e t w e e n counci ls in r ega rd to economic deve lopment and project implementat ion. For example, each MLC has an official wi th economic development in his or her title and the GJMC has two. With three MLCs having a slice of the inner city and the Southern MLC, in particular, contesting control of the inner city with the GJMC, there were confused, ad hoc responses to the decline of one the city's key assets.

3. Because of the unclear legislative f ramework there was uncertainty as to which Council was responsible was for wha t service. This uncertainty r e g a r d i n g roles and respons ib i l i t ies w a s pa r t i cu la r ly p r o n o u n c e d between the GJMC and the MLCs. Similar confusion within and be tween MLCs caused individuals to fail to assume responsibility for issues and problems.

4. The available resources in the Councils are not focused on priorities. As a consequence of their participation in non-core activities, Councils are d ra in ing resources f rom pr ior i ty needs . There are also imbalances be tween the Councils, and these result in the inequitable del ivery of services. Scarce capacity such as geographical information systems has been d i v i d e d b e t w e e n the Counci ls , at t imes leaving some of the Councils unable to provide the necessary service.

5. Rather than being customer orientated, 'more time and effort is devoted to the in ternal w o r k i n g of the Counci ls and a t tending in ternal co- ordinat ion meet ings, to ensure that no one Council does someth ing d i f fe ren t , t h a n to m e e t i n g the n e e d s of c o m m u n i t i e s . . . ' (Pr ice Waterhouse et al. 1998a:8).

6. The Organisa t ional Rev iew found that ' there is a lmost a comple te absence of operational plans that identify measurable objectives, defined actions and quantified targets . . . . Consequently, there is no measur ing or monitor ing of performance either of activities or of staff' (ibid.:8).

T E N Y E A R S IN THE M A K I N G 29

Three Options

Three options were developed, based on prior agreement on ten 'design' principles. The principles are derived from the conceptions of core/non-core and client/contractor and are intended to be consistent with the White Paper on Local Government.

1. The organisational design must be realistic and affordable. 2. The organisational structures should be based on the needs and

requirements of the community.... 3. The structure and role of support services should be determined by the

service and corporate support needs they are intended to meet. 4. The management structure of the councils should only be considered

once the options for all services have been determined. 5. The organisational design should adopt the principles of 'Cl ient /

Contractor (provider)' roles. 6. The organisational design should ensure no duplication or overlap of

functions or responsibility. 7. The organisation design should have as few levels of hierarchy as

possible (a maximum six or seven levels between the lowest worker and the CEO) and there need not be a standard hierarchy and reporting structure ... .

8. The organisation design should be based on the most efficient and effective use of available resources.

9. The organisation design should, where appropriate, ensure optimal local (decentralised) service delivery and should be accessible to the local community.

10. The organisation design should focus on the core functions of the councils (Price Waterhouse et al. 1998b:3-5)

The options were derived from workshops with councillors, senior officials and the Committee of Ten. The vast majority of workshops considered that

the benefits of a single metro-wide client, including consistency across the city, and efficiency gains from the pooling of resources, significantly outweigh any potential disadvantages. Conversely, in most cases it was believed that contractor operations and activities should be provided on a local/area basis. This leads to the conclusion that there should be only one Chief Executive heading an organisation featuring a single client for all services with area based contractors. (Price Waterhouse et al. 1998b:16, 17)

This was the starting point for the identification of the three options. Figure I


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provides assistance with the interpretation of the preferred option, Option 3. Option 3 involved the separation of the client and contractor roles at the highest level, with four client departments and a single Director responsible for all contractor operations. These are delivered through a number of multi- functional area-based departments. Option 3 provides the clearest focus and specialisation between policy, strategy and operational service delivery, and clearly identifies core clients. However Option 3 requires the most disruption to the existing local government structures. It is the structure preferred by the Committee of 15 and others participating in the workshops.

The Final Stage

In the eyes of government, the 'local level transition has been largely concerned with the amalgamation of previously separated municipali t ies, and ... significant changes to administrative systems have not yet taken place'. The 'final stage' is intended to introduce 'developmental' local government in terms of the Constitution, namely:

152(1) The objects of local government are -

a) to p rovide democrat ic and accountable government for local communities;

b) to ensure the provision of services to communities in a sustainable manner;

c) to promote social and economic development; d) to promote a safe and healthy environment; and e) to encourage the involvement of communit ies and communi ty

organisations in matters of local government.

With this in mind, government contemplates the significant redesign of local government. The implications for the GJMC include:

�9 A new electoral system, 50 per cent proportional and 50 per cent ward (reducing ward representation by 10 per cent and increasing the sway of the dominant party)

�9 Reallocating all powers and functions to metropolitan government, which will then decentralise (contract) powers and functions to optimise service delivery and local accountability

�9 Reconsidering the metropolitan boundaries �9 Creating the potential for new leadership arrangements, including

provision for an executive mayor and reducing the number of councillors �9 Exploring the full range of service delivery options, especially including

public-private partnerships


Needless to say, through implement ing the recommendat ions of the Organisational Review, the GJMC is already making many institutional adjustments in anticipation of the White Paper. Centralisation is again under way. But in other respects, the GJMC appears focused on crisis management and the role of local government is defined rather narrowly. This is apparent in its agenda.

The agenda of the city's leadership is clear: democratic local governance based on the pr inc ip les of accountab i l i ty and transparency; rigorous financial management to ensure a sustainable local government; a single administration geared to development, responsiveness and quality service delivery. (Fihla 1998:35)

In fact, what we see is a city administration withdrawing from the holistic vision of a developmental local government advocated by the Constitution and by the Department of Constitutional Development in its White Paper on Local Government. Instead we see a local government struggling to master its essential responsibilities and aiming to deliver services in historically disadvantaged areas. With national elections in 1999 and local government elections coming in 2001, this seems a practical response to overwhelming difficulties.

Concluding Observations

The Auditor-General (1997:87) commented of the last restructuring that 'The increasing shortage of suitably skilled personnel, coupled with ongoing changes to council structures, management and systems, has weakened the control environment and hampered efficient service delivery.' The question concerns the implications this inefficiency has for the economy of Johannesburg and for jobs for its inhabitants.

Johannesburg forms part of an integrated urban system, with business centres stretching from the Johannesburg CBD to the Pretoria CBD, and spreading east and west along the ring roads and towards the airport. The fastest growing urban centre in the province is Midrand, situated north of the GJMC boundary between Johannesburg and Pretoria and not far from the airport. Midrand offers lower rates than Johannesburg, no levy, and attracts many global companies, often of a high-tech nature.

In contrast, the Johannesburg CBD has been in sharp decline for some years (Tomlinson 1999). This decline has been accentuated by mismanagement and is now spreading to surrounding areas. However, the property section in business newspapers now complain about 'urban decay' in Sandton, with newspapers voicing misgivings about the overloaded sanitation system 17 and investors such as the Johannesburg Stock Exchange indicating that the major drawback to Sandton was the traffic. While Sandton has become the new financial centre of


the country, replacing the Johannesburg CBD, there are clear trends that commercial property development is moving still further north.

The inner city was perceived as a 'cash cow' and this is how Sandton is currently perceived. If the existing business centres are to be sustained, then there has to be reinvestment in both the inner city and Sandton. In addition, due to the fact that the various local governments within the province comprise an integrated property market and some are more efficient than others and have smaller services backlogs and debts and can thus charge lower rates, there presently exists a natural tendency for business to move out of Johannesburg. This trend becomes self-reinforcing as the financial constraints accentuate the services backlogs and can spin out of control. The provincial government needs either to steer planning with a view to preventing harmful competition among local governments or to demarcate the present local government boundaries so as to divide the present Midrand Metropolitan Council between Johannesburg and Pretoria. The former is necessary because at p resen t the local governments are gran t ing d e v e l o p m e n t r ights considerably in excess of demand and existing vacancies (in the city centre) and damaging areas such as the Johannesburg city centre whose replacement value exceeds R30 billion. The Demarcation Board is presently considering the latter.

Postscript

Since the writing of this paper the GJMC and the four MLCs have published iGoli 2002 that 'ushers in the birth of the unicity by transforming local government in Greater Johannesburg through changed governance, financial viability, institutional transformation, sustainable development and enhanced service delivery' (p. 3). The transformation process is intended to ensure that 'Johannesburg must work effectively, efficiently and dynamically' (ibid.). Notably absent is 'equitably'. It is observed in the document that the financial crisis precludes even effective maintenance of the services that exist, let alone the extension of services to overcome backlogs. The emphasis is on getting the basics right. (It should be noted that the most powerful economic statement a city can make is to have a reputation for effective and efficient management and service delivery.) TM

However, this is not to repeat the criticism earlier level led at the Organisa t ional Review. iGoli 2002 represents a cons iderab ly more sophisticated effort at local government transformation. In particular, it involves:

�9 Seeking a mandate and vision for the years 2002 and 2010 �9 Conceptualising the 'big picture' (see Figure 2) �9 Implementing a financial plan


Programme E - Core Administration

CEO

Community Services

Planning & Development

Corporate Services &

Finance

Community Strategic Information health, Welfare, planning, Land technology, Arts & culture, use management Finance & Museums, enforcement, revenue, Libraries, Sport Valuation, Communications, & recreation, Environmental Legal, Human Emergency health & resources, services management , Security

Housing, Project facilitation

Infrastructure & Contract

Management

Regulation for utilities, Regulation for agencies, Contract management

~ F

Metropolitan Police

Service

Traffic, By-laws, Crime prevention

Metropolitan Transport Authority

Planning, Contracts, Regulation

Community health, Welfare, Libraries, Sport and recreation, Environmental health and management, Land-use management enforcement, Housing, Corporate services & finance, Human resources, Administrative support

Figure 2. Intended new municipal structure, iGoli 2002


The vision comprises targets for 2002 ('Three year plan - getting the basics right') and 2010 ('Greater Johannesburg - a world class city'). The vision consists of:

Johannesburg The Pulse of Africa

A city for living A city for business A city for people A city for the millennium

that has culture, sport, health and education that is safe, has excellent services and clear rules that provides housing, services and recreation wired and mobile, fast and connected

The Transformation Lekgotla is actively seeking a mandate from all stakeholders for implementing the vision.

Programme E is the centrepiece of Figure 2. The central administration will perform the "client' function by formulating policy, determining what the Council wants from each service that is contracted out, regulating service delivery regulation, and managing contracts. The regional administration relates directly to the public and is responsible for those functions requiring localised implementat ion. The regional administrat ion will serve as a contractor and the regional administrator will be responsible for the delivery of specific services.

There are seven other programmes in addition.

Programme A-

Programme B -

Programme C -

Programme D -

Programme F - Programme G -

Programme H -

Utilities, designed for water and sanitation, electricity and waste management. Agencies, designed for roads, stormwater, parks and cemeteries. Privatisation, intended for Metro Gas, the fresh produce market, the Rand Airport, stadiums etc. Corporatisation, is intended for the Zoo, the Civic Theatre, the Bus Company etc. Financial plan. Special projects such as Y2K compliance, the All Africa Games and the elections. Labour relations.

The distinction between utilities, agencies, privatisation and corporatisation is shown in Table 9. This represents a more thorough conceptuaLisation of the Council 's responsibili t ies and arrangements for service del ivery than anticipated in the earlier work of the consultants during the Organisational Review.


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Programmes A and B, utilities and agencies, account for 50 per cent of the Council's business; Programme E, the core administration, makes up another 40 per cent; Programme C, assets to be privatised, represent 3 per cent of the Council's business; and Programme D, corporatisation, accounts for the final 7 per cent.

Finally, the financial plan is intended to restore Johannesburg's financial viability and to ensure access to private capital (investment and loans) for service delivery. The plan involves writing off R1 billion in bad debt and persisting with the attempt to recover the other R1,1 billion in arrearsY The operating and capital budgets have been cut back substantially, so much so that (as noted) effective maintenance of existing services cannot be sustained. Despite the cutbacks, a deficit is predicted for the current financial year. The aim is to ensure a balanced budget by 1999/2000, to increase capital spending to R500 million, and to establish a Capital Development Fund with R150 million in cash.

NOTES

1. The Central Witwatersrand Regional Services Council was intended to enhance the revenue base of black local authorities by taxing payroll and turnover in the metropolitan area.

2. By comparison, in the current tax year, revenue from business for the entire GJMC comprises 64 per cent.

3. Most of these households were located in informal settlements, especially in Orange Farm, and in backyard shacks in Soweto.

4. The description of the struggles leading up to the Chamber and much of the discussion of the Chamber are based on Swilling and Boya 1997.

5. The Chamber had a profound influence in shaping national expectations regarding what was possible at the local level and considerably influenced the drafting of the LGTA. Its contribution and legacy, however, was dismantled by the ANC members who were late in joining the process due to their hitherto having been banned and their subsequent hegemonic style. Perhaps the most important lasting impact of the Chamber has been the networks established among people from very different backgrounds.

6. Cir. E Clogg, comment on this paper. 7. The title of this section combines material from Emdon (1998) and

Padayachee (1996). 8. Clr. E. Clogg, comment on this paper. 9. Section 59 Committees do not have decision-making powers and are

purely advisory bodies without delegated powers. The contrast is with Section 60 Committees that do have full delegated decision-making powers on specified topics.

10. This section is substantially based on Emdon (1998) and financial data provided by Phil Sinnett.


11. The Department is unwilling to let local governments negotiate with foreign lenders wi thout its oversight and approval as this could exacerbate foreign debt in an uncontrolled fashion.

12. Unless otherwise stated, the figures quoted below relate to the fiscal year that ends on 30 June 1998.

13. Recharges refer to transactions between departments where the income earned by one is an expense to another.

14. General Notice No. 401 publ i shed in Gauteng Provincial Gazette Extraordinary, 10 Oct. 1997.

15. This percentage refers to the budgetary shortfall. It is considerably higher than might be expected from the fact that 62 per cent of households in the Southern MLC are not paying for rates and services because their consumption of services is very low when set against large industrial users and because their property values are low.

16. Amendment of Instructions in Terms of Section 10G(2)(m)(i) of the Local Government Transition Act 1993: Greater Johannesburg Metropolitan Council (GJMC) and the Eastern, Western, Southern and Northern Metropolitan Local Councils (MLCs) April Notice.

17. The central government Department of Water Affairs has threatened legal action against the GJMC due its inadequate treatment of sewerage.

18. Indeed, the foremost local economic development strategy aims to foster such administration and service delivery. More interventionist local economic development strategies build on this reputation.

19. R1 billion and R1,1 billion are the figures mentioned in iGoli 2002. R2,1 billion in arrears is less than the R2,3 billion mentioned earlier that was provided by consultants to the GJMC.

REFERENCES

Abt Associates Inc. 1998. Indicators for Assessing Progress in Housing and Urban Development Policy Achievements in South Africa. A report prepared for US.AID, South Africa.

Auditor-General. 1997. Report of the Auditor-General on the Financial Statements of the Greater Johannesburg Metropolitan Council and the Northern, Southern, Eastern and Western Metropolitan Local Councils for the Financial Year ended 30 June 1997.

Central Witwatersrand Metropolitan Chamber (CWMC). 1993. Building Tomorrow Today. Johannesburg: Central Witwatersrand Metropolitan Chamber.

Emdon, Erica. 1998. Research into the Johannesburg Metropolitan System. Consultant's report.

Fihla, Kenny. 1998. Jo'burg moves beyond romantics. Mail & Guardian 11-17 Dec., p.35.


iGoli 2002: It Cannot be Business as Usual. 1999. Published by the GJMC and the four MLCs.

Mabin, Alan. 1998. From Hard Top to Soft Serve: Demarcation of Metropolitan Government in Johannesburg for the 1995 Elections. Report for the Arbitration Committee for the Central Witwatersrand Metropolitan Chamber.

Morris, Alan. 1998. Local Government in Greater Johannesburg. Consultant's report.

Padayachee, N. 1996. Metropolitan Transformation: The Experience of Greater Johannesburg. Paper presented at the Conference on Metropolitan Government and Development in South Africa, University of Durban- Westville.

Palmer Development Group. 1998. Report on the Financial Modelling of Water Supply and Sanitation Services in the Southern Metropolitan Local Council. June.

Price Waterhouse, Ebony Financial Services and KMMT Brey. 1998a. Organisational Review: Greater Johannesburg Metropolitan Council and Local Councils. Case for Change Report. 26 Jan.

- - 1 9 9 8 b . Organisational Review: Greater Johannesburg Metropolitan Council and Local Councils. Envisioning Organisation Design. 6 April.

Savitch, H.V. 1994, Reorganisation in three cities: Explaining the disparity between intended actions and unanticipated consequences. Urban Affairs Quarterly 29(4):565-95.

Swilling, Mark. 1998. Mismanaging Jo%urg. Mail & Guardian 4-10 Dec., p.41. Swilling, Mark and Boya, Lawrence. 1997. Local Governance in Transition. In

Patrick Fitzgerald, Anne McLennan and Barry Munslow (eds), Managing Sustainable Development in South Africa. Cape Town: Oxford University Press, pp.165-91.

Tomlinson, Richard. 1999. From exclusion to integration: Re-thinking the Johannesburg central city. Environment and Planning A (forthcoming).

Wooldridge, Dominique. 1996. Overview of the Organisational Change Process in Greater Johannesburg. Consultant's report.

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