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PART V of the agenda of the Council Meeting of the

CITY OF TSHWANE METROPOLITAN MUNICIPALITY (FOURTH TERM OF THE CITY OF TSHWANE) will be held in the Council Chamber, Sammy Marks Conference Centre, cnr Lilian Ngoyi and Madiba Streets, Pretoria, on THURSDAY, 30 MARCH 2017 at 10:00. REPORTS OF THE MAYORAL COMMITTEE 03/2017 report 9 MARCH 2017 RK MATHEBE SPEAKER 10 March 2017

PLEASE RETAIN THIS PART V OF COUNCIL FOR PURPOSE OF THE COUNCIL MEETING OF 30 MARCH 2017

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COUNCIL AGENDA: CITY OF TSHWANE METROPOLITAN MUNICIPALITY: 30 MARCH 2017 F. REPORTS TO THE COUNCIL PART V: FROM THE MAYORAL COMMITTEE MEETING: 9 MARCH 2017 INDEX

PAGES

(The recommendation appears on the page indicated in brackets) 14. Environmental and Agricultural Management Department

Acquisition of servitude under the ownership of Quantidev (Pty) Ltd portion of the farm Sterkwater 108-JR (From the Executive Committee: 13 February 2017 and the Mayoral Committee: 9 March 2017)……………………………………… 3 – 42(9)

15. Housing and Human Settlement Department

Request for Power of Attorney for Portion 34 (a portion of Portion 19 of the farm Oog Van Boekenhoutkloof 288-JR and the Remainder of Portion 19 of the farm Oog Van Boekenhoutkloof 288-JR (From the Executive Committee: 6 March 2017 and the Mayoral Committee: 9 March 2017)………………………………………. 43 – 74(46)

16. Group Property Department Transfer of portion of Erf 221 Ga-Rankuwa Industrial

(From the Executive Committee: 12 September 2016 and the Mayoral Committees: 21 September 2016 and 9 March 2017)…………………………………………………………….. 75 – 107(85)

17. Group Property Department Proposed registration of servitude over Portion 1, 6 and 12 of the farm Rietvallei 377-JR (From the Executive Committee: 19 September 2016 and the Mayoral Committees: 21 September 2016 and 9 March 2017)……………………………………………………………. 108 – 122(115)

18. Group Financial Services Department

(Supply Chain Management) Irregular expenditure incurred up to 30 June 2016 (From the Executive Committee: 6 March 2017 and the Mayoral Committee: 9 March 2017)……………………………………..… 123 – 142(142)

COUNCIL AGENDA: CITY OF TSHWANE METROPOLITAN MUNICIPALITY: 30 MARCH 2017

Reference No 07078/1 Mthobeli Kolisa (2449) COUNCIL: 30 March 2017

14. ENVIRONMENTAL AND AGRICULTURAL MANAGEMENT DEPARTMENT ACQUISITION OF SERVITUDE UNDER THE OWNERSHIP OF QUANTIDEV (PTY) LIMITED: PORTION OF THE FARM STERKWATER 108-JR (From the Executive Committee: 13 February 2017 and the Mayoral Committee: 9 March 2017)

1. PURPOSE The purpose of the report is to seek approval for the acquisition of servitude RE: ZANKOP ZYN LAAGTE for the development of access road to Tshwane North Cemetery (portion 106 JR-Sterkwater).

2. STRATEGIC OBJECTIVES

The report addresses the following strategic objectives: Strategic Objective 1: Sustainable Services, Infrastructure and Human Settlements. Strategic Objective 3: Ensure sustainable safer cities and integrated social development. Strategic Objective 4: Promote good governance and active citizenry.

3. BACKGROUND

As part of the Integrated Development Planning process (IDP 2011-2016), the City of Tshwane (CoT) acknowledged that the provision of burial space is essential to cater for the growing needs of Tshwane. As a result, the IDP (2011-2012), identified and proposed the development of two (02) sites for terrestrial burial purposes. The projects are, 1. Development of Tshwane North Cemetery (WBS no.9.712809.1) and

2. Development of Klip-Kruisfontein Cemetery (WBS no.9.712808.1).

In respect of the Tshwane North Cemetery Development, the project commenced with the purchase of approximately 600 hectors of land which is Sterkwater farm 106- JR to the north of the city as far back as 2009 at a cost of R30 million (excluding VAT). The approval report for the purchase of the property is attached.

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The first phase of the cemetery was to develop 20 hectors, on the north eastern boundary of the property. The plan is to implement continuous expansions of this the cemetery in the future according to need. Meanwhile there are considerations for use of some portions of the remaining land area, especially those that may not be suitable for burials, for conservation or agricultural development until the areas that are suitable for burial are needed for that purpose. The Environmental Management Services Department has completed the development of the first phase of the Tshwane North Cemetery which is about 20 hectors. The development of the cemetery internal infrastructure is complete with the following having been achieved:

Perimeter fencing around 20 hectors of the farm

Paving of internal roads

Ablution Block

Admin Building

Water supply linked to a borehole and pump

Sanitation service linked to a septic tank

Entrance and guard house

Therefore, the outstanding infrastructure for the cemetery to be fully operational is the development of access road that will link the cemetery to the nearby community, as explained in more detail under discussion paragraph.

4. DISCUSSION The roads to access the cemetery for the nearest community that will use the facility takes an inconveniently long route. A shorter route that was identified will have to go along the eastern border of approximately 5 km onto an intersection with the Molefe Makinta provincial road, 2 km of which is within farm Zandkop Zyl Laagte 108-JR and 3km traverse a tribal land. See sketch plan attached as Annexure B. The Department entered into negotiations with owners of farm Zandkop Laagte 108JR. The intention of these negotiations was to achieve two outcomes, which are:

To get the owner of the farmer to permit users of the cemetery to use the route through the farm to access the cemetery until a proper road has been developed preferably through the farm; and

To establish a likely compensation amount that could possibly be paid if the City were to appropriate or purchase a portion of the farm for road servitude.

Through this negotiation, the owner of the farm gave permission to the City to utilize a route through the farm as a thoroughfare to the cemetery and for the City to even improve the road on this route while arrangements are being finalized for the establishment of a formal servitude through the Farm.

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In order to establish the fair value of the required piece of land with Zandkop Zyl Laagte 108-JR, the City valuers were requested to do a valuation. The City valuation report indicated a price of R3.00/m2. It also indicated that there are comparable transactions of properties sold in the vicinity and the rate per square meter ranging between R3.00/m2- R7.00/m2. See Annexure A. The neighboring property that was acquired by the City in 2012 for the development of Tshwane North Cemetery was at a price of about R6.00/m2. The owner of the property disputed the City valuation value claiming that he had a then unguaranteed offer for the land at a price of R75.5/m2 (attached as Annexure D). Through negotiations, the owner indicated willingness to accept compensation of R10/m2 for the servitude if the offer he had did not get a guarantee by the deadline. This was stated in a document sent by his lawyers dated 06 May 2016 (attached as Annexure C). This price equals to R450 000.00 for the 45 000 m2 required for the servitude. Tshwane North Cemetery has a lifespan of +-50 years, and as such investing in a road to access the facility is value for money and will be cost effective and safe for the communities to access the cemetery from the north unlike the south. There is also a need to connect electrical supply to the cemetery. Meanwhile the capital budget allocation to the cemeteries development program within the Department indicates that an amount of R2m has been allocated to the Garankuwa cemetery and R1,5 has been allocated to Klipkruisfontein cemetery. It is proposed that an amount of R450 000.00 plus electrification be moved from the Klipkruisfontein cemetery project to fund the acquisition of the servitude.

5. COMMENTS OF THE STAKEHOLDER DEPARTMENTS 5.1 COMMENTS OF THE CHIEF FINANCIAL OFFICER

Cognisance is taken of the contents of the report. It is recommended in the report that approval be granted for the acquisition from Quantidev (PTY) LTD of 45 000 m² of land for a servitude on a portion of farm Zandkop Zyl Laagte 108-JR. For accounting and administrative purposes, it is noted that all the documentation relevant to the registration of the servitude/s will be submitted to the Asset Management Unit for processing the necessary entries in the Asset Register. According to the sketch plan provided for the proposed servitude road over the Farm Zandkop Zyn Laagte 108-JR, the extent relevant hereon is indicated as 15 500m² and not 45 000m², as on your report. We therefore still confirm that the value hereof, is as was initially determined by Property Valuation Management on 17 December 2015 at R3/m², the amount calculating at R47 000, and being informed by the market information applied at the time.

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Furthermore, it is recommended that an amount of R450 000.00 be moved from Klipkruisfontein Cemetery project WBS No. 9.712808.1 to the Tshwane North Cemetery project WBS No. 9.712.809.1 for the purpose of acquisition of the servitude and electrification at the cemetery. It should be noted that a separate report (ref: 63003/1) was submitted for transfer of funds of an amount of R450 000.00 to be moved from Klipkruisfontein Cemetery project WBS No. 9.712808.1 to the Tshwane North Cemetery project WBS No. 9.712.809.1 wherein the Group Financial Services Department rendered positive comments in this regard. It is therefore Group Financial Services Department's understanding that the fund transfer request as per the report with reference number: 63003/1 will address the transfer referred to in the report (ref: 07078/1) now being commented on. The following amounts are available (on 26 October 2016) in the 2016/17 Medium-Term Revenue and Expenditure Framework, for the fund transfer to be effected: FROM:

IDP Project Name

Project Name

Funding Source

2016/17 (R)

9.712808.1

Development of Klipkruisfontein Cemetery

Borrowings

1 500 000

TO:

IDP Project Name

Project Name

Funding Source

2016/17 (R)

9.712809.1

Development of Tshwane North Cemetery

Borrowings

0

Paragraph 11.2.2 of the Budget Policy, approved 21 July 2016 reads as follows:

(Unaltered) “11.2.2 CAPITAL BUDGET FUND TRANSFERS

11.2.2.1.7 Comments of the City Strategies and Performance Management Department must be requested on the proposed fund transfer taking into consideration imperatives of the 5 year strategic plan. 11.2.2.1.8 The Mayoral Committee must consider the proposed fund transfer for approval once the transfer document (report) has been signed by the Strategic Executive Director, City Manager and the relevant MMC and the IDP Office comments have been included.” 11.2.2.2.2 The creation of a WBS element (s) (level 2) where it does not exist against an approved project will be allowed in order to ensure the approved transfer takes place.

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Therefore, the comments of the City Strategies and Performance Management must be obtained and approval from the Mayoral Committee be sought in this regard.

5.2 COMMENTS OF THE GROUP HEAD: CITY STRATEGY AND ORGANISATIONAL

PERFORMANCE The City Strategies and Performance Management department take cognisanse of the report. The following comments are rendered: The title of the report refer to “ACQUISITION OF SERVITUDE UNDER THE OWNERSHIP OF QUANTIDEV (PTY) LIMITED: PORTION OF THE FARM STERKWATER 108 JR” whereas in the body of the report reference is made to “Zandkop Zijn Laagte 108-JR”. For the purpose of comments the department will provide comments for the acquisition of a portion of the farm Zandkop Zijn Laagte 108-JR for purposes of a servitude to provide access to the newly developed Tshwane North cemetery. The proposal to acquire land for the access road for the cemetery is supported however the following inconsistency has been picked up in the report which need to be corrected. The sketch plan attached as Annexure B to the report indicate that the area of land required for a 10 meter access road along the eastern boundary of the farm Zandkop Zijn Laagte 108-JR, measures approximately 1.55 hectares (15 500 m²) of land and not 45 000m² as indicated in the body of the report. The land required will therefore accommodate an access road, 10 meter wide and 1,5 kilometer long over the farm Zandkop Zijn Laagte 108-JR. This inconsistency has also been raised by the CFO. Based on the comments above and that the inconsistency in the report and recommendation 1 be corrected to reflect the correct size of the land which is required, the proposal to acquire the land for the purpose of an access road for Tshwane North Cemetery is supported as it will ensure the proper utilisation of Council facilities. The further request to transfer funding to accommodate the electrification of the cemetery from the Klipkruisfontein cemetery is also supported. The department should, after approval, update the respective project plans with regard to the two projects.

5.3 COMMENTS OF THE GROUP HEAD: GROUP LEGAL AND SECRETARIAT

SERVICES A Municipality's functions and powers are assigned to it in terms of sections 156 and 229 of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996). Further to the said functions and provisions, a local authority's power to acquire immovable property is prescribed in section 79(24) of the Local Government Ordinance, 1939 (Ordinance 17 of 1939). The said section 79(24)(i) read as follows: “79 The Council may do all or any of the following things, namely -

(a) subject to the succeeding paragraphs -

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(i) hire, purchase, expropriate or in any other manner acquire any movable or immovable property, including a servitude on or a right in immovable property, for the performance or discharge of any function or duty which the Council is in terms of any law authorized or required to perform or discharge;

POLICY The Policy Framework for Alienation and Acquisition which was approved on 29 November 2007 by Council stipulate as follows: "It is common practice to acquire property or servitude by means of purchase which involves negotiations between a willing seller and a buyer and is governed by the law of contract." The report is legally in order and supported.

6. IMPLICATIONS 6.1 HUMAN RESOURCES

None.

6.2 FINANCES

The acquisition of 45 000 m2 of Zandkop Zyl Laagte 108-JR for a servitude from Quantidev (PTY) LTD at cost of R 450 000.00.

6.3 CONSTITUTIONAL AND LEGAL FACTORS None.

6.4 COMMUNICATION

None.

6.5 PREVIOUS COUNCIL OR MAYORAL COMMITTEE RESOLUTIONS

None.

7. CONCLUSION Tshwane North Cemetery will be functionally ready and accessible if the earmarked

servitude is acquired. It is therefore essential that the City acquires the property in order to provide burial space for the community.

The Mayoral Committee on 9 March 2017 resolved to recommend to Council as set out below:

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ANNEXURES: A. Valuation Report B. Offer Letter by the owner C. Elijha Ragedi Agreement D. Sketch Plan RECOMMENDED: That approval be granted for the acquisition of 45 000 m2 of land at the amount of R450 000.00 from Quantidev (PTY) LTD for a servitude on a portion of farm Zandkop Zyl Laagte 108-JR.

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http://ceoctviis058.tshwane.gov.za/c9_tshwane/GovFlowAjax/DownloadAttachment/4047891




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ANNEXURE A

Sir ACQUISITION OF SERVITUDE RE: ZANDKOP ZYN LAAGTE 108-JR We refer to the above and confirm that we act on the instructions of Quantidev (Pty)

Limited (registration number 2006/039155/07) duly represented by Mr Dawie Swanepoel

(“our client”).

Pursuant to the aforegoing, we have been made privy to the content of the exchange of

correspondence between the City of Tshwane and our client over the period 17 December

2015 – 18 April 2016, which has been handed to us for consideration and reply.

Our instructions are to respond as follows:

1. Our client is amenable to the sale of a servitude measuring in extent ± 45000m² to

be registered over the eastern boundary of its property in favour of you (the full and

further particulars of which shall appear from an appropriate SG diagram);

2. The aforementioned sale shall be subject to the following material terms and

conditions:

CITY OF TSHWANE C/o MR NTOKOZO XABA ACTING DIRECTOR: PROJECTS IMPLIMENTATION & OPERATIONS [email protected]

ATTORNEYS, NOTARIES AND CONVEYANCERS

BLOCK E, GLENFIELD OFFICE PARK, 361 OBERON STREET,

FAERIE GLEN PRETORIA, 0043

PO BOX 34 PRETORIA, 0001

TEL (012) 346-3098

DOCEX 8 PRETORIA

Web : www.weavind.co.za

E-Mail: [email protected]

GPS CO-ORDINATE: S-25º 78.137’ E28º 29.0113’

Direct E-mail : Direct Fax :

[email protected] 0866820551 [email protected]

YOUR REF OUR REF DATE

CONRAD DORMEHL/BR/Q0000028 06/05/2016

WEAVIND & WEAVIND INC. REG. NO. 1976/002814/21 VAT NO. 4900106073 LEVEL 3 CONTRIBUTOR : BBBEE QSE/0003765/14

DIRECTORS: E R JOHNSON (Managing), J E LE ROUX, J T J VAN RENSBURG H VAN ROOY, S VAN DER MERW E, N J VIVIERS, B C M NGCOBO, C R DORMEHL, E J VAN HEERDEN ASSOCIAT ES: Y VIVIERS,R van der MERWE, T MATHULWE, N CLOETE,

U FOBIAN, G VAN BILJON, T LEPINKA BUSINESS MANAGER : J J ERASMUS

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mailto:[email protected]




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ANNEXURE B

P a g e | 2

2.1 The purchase price shall be calculated at R10m² such that the total consideration

payable to our client shall be ± R450 000.00 plus VAT;

2.2 The conditions of the servitude shall be that the City of Tshwane is obligated to erect

a fence along the boundary of the said servitude and our client’s property, the

particulars of which shall be set out in the agreement of sale concluded between the

parties;

2.3 The City of Tshwane shall be obligated to maintain the said fence at their own

expense;

2.4 The registration of the servitude over our client’s property shall be effected by

Messrs Weavind & Weavind Inc, and more particularly by the firm’s senior

conveyancer, Mr Theo van Rensburg;

2.5 The City of Tshwane shall be responsible for the costs associated with negotiating,

settling and concluding the sale agreement as well as registration of the servitude

arising therefrom.

We would be most obliged if you could advise as to whether or not the City of Tshwane

is in principal agreeable to the sale of the servitude on the material terms as set out above,

and whether pursuant thereto, writer may commence preparing a draft agreement of sale

for your consideration and approval, such that we can get the proverbial ball rolling herein

as soon as possible.

Kindly note that all future correspondence herein can be directed to the offices of writer.

We look forward to hearing from you as soon as possible.

Yours faithfully Conrad Dormehl WEAVIND & WEAVIND INC

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ANNEXURE C

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ANNEXURE D

Reference No 59643/1 Amolemo Mothoagae (4265) COUNCIL: 30 March 2017 15. HOUSING AND HUMAN SETTLEMENT DEPARTMENT

REQUEST FOR POWER OF ATTORNEY FOR PORTION 34 (A PORTION OF PORTION 19 OF THE FARM OOG VAN BOEKENHOUTKLOOF 288-JR AND THE REMAINDER OF PORTION 19 OF THE FARM OOG VAN BOEKENHOUTKLOOF 288-JR (From the Executive Committee: 6 March 2017 and the Mayoral Committee: 9 March 2017)

1. PURPOSE The purpose of the report is to request Council to approve the alienation of individual Low Cost Housing stands on the township Refilwe Manor.


SO1: Provide basic services and infrastructure SO2: Economic growth and development and job creation SO3: Sustainable communities with clean, healthy and safe environments and integrated social services The report also addresses the Tshwane 2055 Vision as follows: Outcome 3: quality infrastructure development that supports liveable communities.

3. BACKGROUND

Portion 34 (a Portion of Portion 19) of the Farm Oog van Boekenhoutkloof 288-JR and the Remainder of Portion 19 of the Farm Oog van Boekenhoutkloof 288-JR located in Region 5 (locality map attached as Annexure A), was acquired by the City on the 08th November 2011 (Mayoral Committee resolution attached as Annexure B). The region currently has a housing backlog of 13 198 households. Of the 13 198 households, 1 840 resides in Refilwe which has a relatively high growth since 1996 with an annual growth of approximately 5%. The area is characterized by its rural nature with the unavailability of well located land.

4. DISCUSSION

Refilwe Manor is an approved township in Region 5 and all the relevant studies such as Environmental Impact Assessment, Geo-technical, Traffic Impact Assessment, and Services report have been completed. The Power of Attorney (draft attached as Annexure C) is required in order to register the Notarial Deeds of servitude and registration and transfer of stands to qualifying beneficiaries that have been relocated from Machaka informal settlement. The City has already appointed the contractor to install the services (water and sewer reticulation) and construction of top structures.

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Cognizance is taken of the contents of the report. Having due regard to the contents of the report, the Group Financial Services Department has no objection to the issuing of powers of attorney to the appointed service provider since the granting of delegated authority to the City Manager to issue of Powers of Attorney to the Professional Service Provider to proceed with the registration of Notarial Deeds of servitudes, and registration and transfer of stands to qualifying beneficiaries at portion 34 (a portion of portion 19) of the farm Oog van Boekenhoutkloof 288 JR and the Remainder of Portion 19 of the Farm Oog van Boekenhoutkloof 288 JR (known as Refilwe Manor) will be done in the context of the Housing Code and the Constitution. The comments of the Group Legal Counsel should indicate whether this request is in line with the requirements of existing policies, guidelines, financial by-law and applicable legislation. The Group Financial Services Department will gladly render further financial comments on future reports on this regard.


SERVICES After due perusal of the report, Group Legal Services are of the view that Housing and Human Settlement Department intends to alienate a municipal immovable capital asset. It is therefore advised and emphasised that alienation of immovable municipal asset is reserved for the Municipal Council and that no other forum or committee outside the Municipal Council has the power to approve the request contained in this report. In general, when municipal land is transferred, the Municipal Supply Chain Management Regulations jointly with Chapters 2 of the Municipal Asset Transfer Regulations (MAT Regulations) apply to such a transaction. However, where housing on municipal land is developed and transferred to qualifying beneficiaries interms of the housing act, Chapters 2 of the MAT Regulations does not apply. In accordance with the provisions of section 9(1) of the Housing Act, 1997 (Act 107 of 1997), the Municipality is required, as part of the Municipality's process of Integrated Development Planning, to take all reasonable and necessary steps within the framework of national and provincial housing legislation and policy to, inter alia, ensure that the inhabitants of its area of jurisdiction have access to adequate housing on a progressive basis; services in respect of water, sanitation, electricity, roads, storm water drainage and transport are provided in a manner which is economically efficient; identify and designate land for housing development; and plan and manage land use and development. In light of the aforesaid, Group Legal Services supports the content of the report; subject to the following conditions that:

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1. the purpose of the report change and read that: "the purpose of the report is to request Council to approve the alienation of individual Low Cost Housing stands on the township Refilwe Manor. 2. That it be added on the recommendation that: 1. The Municipal Council approves the alienation of the property for low cost housing on the township Refilwe Manor. 2. Recommendation 1 of the report change to read that: The SED Group Legal Service issue the necessary power of attorney and sign all documentation to give effect to resolution 1 above.

5.3 COMMENTS OF THE HEAD: ENVIRONMENTAL AND AGRICULTURAL

MANAGEMENT The Environmental Management Services Department suggests that the following information be taken into consideration: The proposed request for the power of attorney on portion 34 (a portion of portion 19) of the farm Oog Van Boekenhoutkloof 288 JR and the remainder of portion 19 of the farm Oog Van Boekenhoutkloof 288 JR is supported by the Environmental Services Department. However, the Department has noted that the attached Annexures do not include the Township Establishment approval letter and the Environmental authorization letter as referred to in the report. These documentations should be attached to the report as proof that the township application and the environmental impact assessment applications have been approved as alluded to in the report. The Department has no objection to the proposed request the power of attorney subject to the consideration of inputs given above.

5.4 COMMENTS OF THE GROUP HEAD: ECONOMIC DEVELOPMENT AND

SPATIAL PLANNING The City Planning and Development; Regional Spatial Planning Department has no objection to the request for approval for the City Manager to issue Power of Attorney to the Professional Service provider to proceed with the registration of Notarial Deeds of servitude. Any effect on the land uses must be dealt with in terms of the relevant land use management processes and legislation.


The approval for the Group Legal Services to issue Power of Attorney to register the servitude and transfer stands to households for the Remainder of Portion 19 of the farm Oog van Boekenhoutkloof 288-JR will have no negative human resource implications for the City.

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6.2 FINANCES The approval for the Group Legal Services to issue Power of Attorney to register the servitude and transfer stands to households for the Remainder of Portion 19 of the farm Oog van Boekenhoutkloof 288-JR will have no negative financial implications for City.

6.3 CONSTITUTIONAL AND LEGAL FACTORS

The approval for the Group Legal Services to issue Power of Attorney to register the servitude and transfer stands to households for the Remainder of Portion 19 of the farm Oog van Boekenhoutkloof 288-JR will be done in the context of the Housing Code and the Constitution.

6.4 COMMUNICATION

Communication with the recipient community will be done via the Ward Councillor and the formation of a project steering committee during the actual physical implementation work.


Mayoral Committee resolution dated, 08th November 2011, attached as Annexure B.

7. CONCLUSION

The transfer of stands to households for the Remainder of Portion 19 of the farm Oog van Boekenhoutkloof 288-JR as the last milestone in the human settlement value chain is very crucial as the City will realize the return on investment.

The Mayoral Committee on 9 March 2017 resolved to recommend to Council as set out below: ANNEXURES: A. Locality Map B. Mayoral Committee resolution dated 08 November 2011 C. Draft Power of Attorney RECOMMENDED: 1. That the alienation of the property for low cost housing on the township Refilwe

Manor be approved; 2. That the registration of servitude on the Remainder of Portion 19 of the farm Oog

van Boekenhoutkloof 288-JR, also known as Refilwe Manor be approved; and 3. That the Group Head: Group Legal and Secretariat Services issue the necessary

Power of Attorney and sign all documentation to give effect on resolution 1 above.

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REFILWE MANOR

2016/02/26

1:10000

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ANNEXURE A

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ANNEXURE B

Ref: HP/16/52

CITY OF TSHWANE METROPOLITAN MUNICIPALITY

POWER OF ATTORNEY

I, the undersigned, Bruno Seabela, in my capacity as Group Legal Services of the City of Tshwane

Metropolitan Municipality, and duly authorised thereto, do hereby grant a Power of attorney to

PAUL AND PARTNERS ENGINEERING AND QUANTITY SURVEYORS,

and / or their representatives or a person or instance appointed by them for that purpose, in respect of Portion 34 (a Portion of Portion 19) of the Farm Oog van Boekenhoutkloof 288 JR and the Remainder of Portion 19 of the Farm Oog van Boekenhoutkloof 288 JR (proposed

Name Refilwe Manor):

a) Registration of Notarial Deeds of Registration, and

b) Registration and transfer of the stands to households,

This power of attorney is subject to the conditions of appointment as Turnkey in terms of Tender

No. CB131/2012.

This Power of Attorney does not bind the Municipality in any manner whatsoever and does not

imply the approval of the applications therein referred to.

THUS done and signed here at Pretoria on this, the ............ day of ……………………… 2016

WITNESS:

1............................................

.......................................................

2............................................ Group Legal Services of the City of Tshwane

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ANNEXURE C

Reference No 59456/1 Pule M Mmutlana (4488) COUNCIL: 30 March 2017 16. GROUP PROPERTY DEPARTMENT

TRANSFER OF PORTION OF ERF 221, GA-RANKUWA INDUSTRIAL (From the Executive Committee: 12 September 2016 and the Mayoral Committees: 21 September 2016 and 9 March 2017)

1. PURPOSE The purpose of the report is to obtain approval to rescind the council resolution dated 31 January 2013 to lease Erf 221 Ga-Rankuwa Industrial instead transfer Portion of Erf 221 Ga-Rankuwa Industrial to Eskom, an organ of the state, for purposes of construction of a new 11kV substation and relocation of existing Cables, in terms of Section 14(6) and MAT Regulation 20 (1)(f)and MAT Regulation 22.


To improve financial sustainability. To promote good governance and active citizenry.

3. BACKGROUND

At its meeting held on 31 January 2013 the council resolved as follows: 1. That Erf 221, Ga-Rankuwa Industrial is not needed to provide the minimum

level of basic municipal services; 2. That the fair market value of the above mentioned property, the economic

and community value to be received in exchange for the property has been determined as set out in the report;

3. That Council consent to the lease of Erf 221, Ga-Rankuwa Industrial

measuring approximately 2062 m², in terms of Local Government: Municipal Asset Transfer (MAT) Regulation 34 (1) (b);

4. That this property be offered for lease for a period of 30 years at a market

rental as determined by Finance Department (Property Valuation); 5. That notice of the lease envisaged in recommendation will be given in terms

of section 79(18) of the Local Government Ordinance, 1939 (Ordinance 17 of 1993). Should any objections to or representation in respect of the proposed lease be received, the proposed lease together with such objections and/or representations, will be submitted to the Council for consideration and a final decision. Should no objections and/or representations be received, the process be proceeded with in term of the municipality’s Alienation Policy;

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6. That should a sewer connection be required for this application at any other point along the boundaries of the property all resulting costs to provide a sewer connection point as well as all costs incurred as a result of the protection by servitude/moving/provision of a private or municipal sewer necessitated by such application shall be for the account of the applicant;

7. That Erf 221, Ga-Rankuwa Industrial lies within Eskom Distribution for supply

of electricity and that an application must be submitted to the Eskom Northern Distribution for the supply to this property;

8. That any noise abatement, air pollution control measures as well as other

health requirements that the Strategic Executive Director: Health and Social Development;

9. That the lessee at its own cost and risks lodge site developments plans,

building plans, geological or traffic report as and required for the proposed development;

10. That the City Manager be authorized to issue power of Attorney to the

Lessees so that it can lodge the necessary applications for the development of the property;

11. That in the condition of lease, the following be included:

"That the final Rental agreement would only be determined once the rezoning has taken place";

12. That the application be approved on condition that the purpose for the lease

is in line with the provision of the rezoning certificate of Industrial 1; and 13. That the Municipality's further conditions of lease usually applicable to

transactions of this nature and the conditions embodied in this report be applicable.

Erf 221 Ga-Rankuwa measures 2062 m² in extent and it is zoned "industrial", Eskom submitted the application to acquire a Portion of about 540 m² of Erf 221 Ga-Rankuwa Industrial, there are electricity cables traversing through this property which were previously installed by Eskom that needs to be realigned and also relocate cables and the main substation from Erf 222 Ga-Rankuwa Industrial to the said proposed portion, and the remaining extent of about 1 522 m² will remain for Municipal. Therefore, the City of Tshwane intends to propose that the said portion be transferred to Eskom an organ of state, to enable them to relocate the cables and to move the main substation from Erf 222 to the proposed portion of Erf 221 Ga-Rankuwa Industrial, so as to enable Eskom to provide electricity in the Ga-Rankuwa area, the community and businesses are totally dependent on electricity from Eskom, further the increasing demand for electricity services in this area due to the industry growth and housing expansion in this area also places the challenge for electricity . therefore the city of tshwane doesn't have the capacity to provide this service in this area, hence the need for the municipality to support the local service provider Eskom to upgrade its infrastructure as proposed.

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"Note that the comments from the departments refers to servitude and lease transactions, but it should be ignored, since the transaction changed to "Land Transfer". 3.1 LEGISLATIVE FRAMEWORK In terms of Section 14(2) of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003) approval from Council must be obtained to alienate Municipal land. Section 14 reads as follows: (1) A municipality may not transfer ownership as a result of sale or other

transaction otherwise permanently dispose of a capital asset needed to provide the minimum level of basic municipal services;

(2) A municipality may transfer ownership or otherwise dispose of a capital asset

other than one contemplated in sub-section (1), but only after the municipal council, in a meeting open to the public -

(a) has decided on reasonable grounds that the asset is not needed to

provide the minimum level basic municipal services; and (b) has considered the fair market value of the asset and the economic

and community value to be received in exchange for the asset. (3) A decision by a municipal council that a specific capital asset is not needed

to provide the minimum level of basic municipal services, may not be reversed by the municipality after that asset has been sold, transferred or otherwise disposed of;

(4) A municipal council may delegate to the accounting officer of the municipality

its power to make the determinations referred to in sub-section (2)(a) and (b) in respect of movable capital assets below a value determined by the Council;

(5) Any transfer of ownership of a capital asset in terms of sub-section (2) and

(4) must be fair, equitable, transparent, competitive and consistent with the supply chain management policy which the municipality must have and maintain in terms of section 111; and

(6) This section does not apply to the transfer of capital assets to another

Municipality or to a municipal entity or to a national provincial organ of state …”

In terms of the Municipal Asset Transfer (MAT) Regulations published in terms of the MFMA on 22 August 2008, the municipal council must, when considering any proposed transfer or disposal of a non-exempted capital asset in terms of MAT regulation 5(1)(b)(i) and (ii), take into account – (i) whether the capital asset may be required for the Municipality’s own use at a

later date; (ii) the expected loss or gain that is expected to result from the proposed

transfer or disposal;

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(iii) the extent to which any compensation to be received in respect of the proposed transfer or disposal will result in a significant economic or financial cost or benefit to the Municipality;

(iv) the risks and rewards associated with the operation or control of the capital

asset that is to be transferred or disposed of in relation to the Municipality’s interests;

(v) the effect that the proposed transfer or disposal will have on the credit rating

of the Municipality, its ability to raise long-term or short-term borrowing in the future and its financial position and cash flow;

(vi) any limitations or conditions attached to the capital asset or the transfer or

disposal of the asset, and the consequences of any potential non-compliance with those conditions;

(vii) the estimated cost of the proposed transfer of disposal; (viii) the transfer of any liabilities and reserve funds associated with the capital

asset; (ix) any comments or representations on the proposed transfer or disposal

received from the local community and other interested persons; (x) any written views and recommendations on the proposed transfer or disposal

by the National Treasury and the relevant provincial treasury; (xi) the interests of any affected organ of state, the legal and economic interests

and interests of the local community; and (xii) compliance with the legislative regime applicable to the proposed transfer or

disposal. An approval in principle in terms of regulation 5(1)(b)(ii) that a non-exempted capital asset may be transferred or disposed of, may be given subject to any conditions, including conditions specifying – (i) the way in which the capital asset is to be sold or disposed of; (ii) a floor price or minimum compensation of the capital asset; (iii) whether the capital asset may be transferred or disposed or for less than its

fair market value, in which case the criteria set out in MAT regulation 13(2) must first be considered; and

(iv) a framework within which direct negotiations for the transfer or disposal of

the capital asset must be conducted with another person, if the transfer or disposal is subject to direct negotiations.

The full contract in terms of which a municipality transfers a capital asset must be made available in it’s entirely to the council of the municipality in terms of MAT Regulation 18 and may not be withheld from public scrutiny except as provided for in terms of the Promotion of Access to Information Act, 2000.

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B. ALIENATION POLICY This report of the proposed transaction complies with the Alienation Policy, as approved on 29/11/2007. The policy framework is applicable as follows: “Method of disposal 1.6.5 Disposal of municipal property to Organs of State”

4. DISCUSSION

Eskom, an organ of state, intends to acquire a Portion of about 540 m² of Erf 221 Ga-Rankuwa Industrial, in order to construct a new kV Substation over the subdivided Portion of Erf 221 Ga-Rankuwa (see attached sketch plan marked as annexture "B") and relocate cables and the main substation installed currently on Erf 222 Ga-Rankuwa Industrial and realign all on Erf 221 Ga-Rankuwa Industrial.


The purpose of this report is to obtain approval to register servitude over municipal property known as portion of erf 221 Garankuwa industrial for purposes of construction of a new 11kV substation to the existing servitude, in terms of the approved municipal's alienation policy. Since the proposed transfer is being dealt with in accordance with the legislative framework, the Group Financial Services Department cannot raise any objection to this action. For accounting and administrative purposes it is noted that all the documentation relevant to the transfer will be submitted to the Asset Management Unit for processing the necessary entries in the Asset Register. It is recommended in the report that the subdivision of portion of Erf 221 Garankuwa will be at the cost of Eskom. It must be noted that all aspects of the new Municipal Asset Transfer Regulations pertaining to the transfer of municipal assets must be adhered to. The market value for the above-mentioned property, 540 m² in extent, is R110 000. If consensus in respect of the proposed conditions of sale has not been reached and Council approval for such sale not been obtained before 31 March 2016, the market value must be reconsidered by this section. In determining the said market value it has been assumed that all services are available.

5.2 COMMENTS OF THE CHIEF OF POLICE The purpose of this report is to obtain approval to transfer Portion of Erf 221 Garankuwa Industrial to Eskom, an organ of the state, for purposes of construction of a new 11kV substation and relocation of existing Cables, in terms of Section 14(6) and MAT Regulation 20 (1)(f)and MAT Regulation 22. The Tshwane Metro Police Department (TMPD) takes cognisance of the content and importance of the report.

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The TMPD further supports the recommendations as outlined in the report provided this action would be carried out without contravening all other applicable legislation and utmost safety should be ensured throughout this process. It should further be noted that the property must be utilised for the purposes as stipulated within the land use zoning for the specific property and access to and from the premises must be provided in accordance with the National Road Traffic Act 1996 (Act 93 of 1996), as amended.


SPATIAL PLANNING The proposal to register a servitude on a Portion of about 540 m² of Erf 221 Garankuwa Industrial, in order to relocate all cables that are currently installed on Erf 222 Garankuwa in order to construct a new 11 kV Substation over the said Portion of Erf 221 Garankuwa, is supported.

5.3.1 CITY PLANNING AND DEVELOPMENT

Erf 221, Ga-Rankuwa is zoned INDUSTRIAL 1 for the purposes as listed in table B of the Tshwane Town Planning Scheme, 2008. The department has no objection to the proposed transfer of a portion of the above mentioned property to Eskom for the relocation of the sub-station located on erf 222 Ga-Rankuwa Industrial. The proposed use of the erf should be in line with the current zoning of the erf.

5.4 COMMENTS OF THE GROUP HEAD: ROADS AND TRANSPORT 1. In order. The following conditions apply:

1.1 A rezoning application must be submitted, if the site is not zoned appropriate

for the proposed usage, whereby our Division will determine the relevant conditions.

1.2 A complete Site Development Plan must be submitted before any building

construction may commence, at the cost of the applicant, for the approval of the Division: Transport and Infrastructure Planning.

1.3 The applicant must register the servitude over the portion of land required.

5.5 COMMENTS OF THE GROUP HEAD: UTILITY SERVICES

5.5.1 ENERGY AND ELECTRICITY

The property lies within Eskom Distribution for supply of electricity, therefore, the applicant must lodge an application through Eskom Northern Distribution.

5.5.2 WATER AND SANITATION Water is available and the applicant may apply for a water connection at any of the One-Stop-Service-Desks for Water- and Sanitation Services, after building plan approval. The contact numbers are 012- 358 7983/7978/7984. The existing pipe line for sewerage is already installed at midblock.

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A sewer connection is available. Should a sewer connection be required for this application at any OTHER point along the boundaries of the property all resulting costs to provide a sewer connection point as well as all costs incurred as a result of the protection by servitude / moving / provision of a private or municipal sewer necessitated by such application shall be for the account of the applicant. Such sewer and connection must be designed by a Consulting Engineer and installed by a suitably qualified private plumbing contractor under the Engineer’s certified supervision. Information and specifications are available from any of the One-Stop-Service-Desks for Water and Sanitation Services.


SERVICES The purpose of this report is to obtain approval to transfer Portion of Erf 221 Garankuwa Industrial to Eskom, an organ of the state, for purposes of construction of a New 11kV Substation and relocation of existing Cables, in terms of Section 14(6) and MAT Regulation 20 (1)(f)and MAT Regulation 22. Since the municipal electricity services are not available in Garankuwa and surrounding areas, the Municipality has to support the local service provider ESKOM to upgrade its infrastructure, such as this proposed Substation. LEGISLATION The MAT guidelines defines an “Organ of State” as follows: 3.5.1 Organ of State; “An organ of state is defined in regulation 1 and includes a national or provincial government department or entity, a municipality or a municipal entity or any other organ of state as envisaged in section 239 of the Constitution. Examples of organs of state include a national government department, a provincial government department, a public entity such as Eskom and a municipal entity such as Johannesburg municipality’s Pick-It-Up. Each is effectively controlled by a sphere of government to exercise a constitutional power (regulation 1, MSA – section 1, Constitution – section 239). Regulation 40 of the Municipal Supply Chain Management Regulations, prescribes in that by way of a Municipality’s Supply Chain Management Policy an asset may be disposed of by way of inter alia : 2 (a) (ii) Transferring the asset to another organ of state in terms of a provision of

the act enabling transfer of assets; “2 (a) (ii) Transferring the asset to another organ of state at market related value or

when appropriate free of charge;”.

MAT Regulations Chapter 3 regulates the transfer by Municipalities of exempted capital assets to organs of state qualifying for such transfers in terms of section 14(6) or 90(6) of the MFMA. MAT Reg 20 & 22 is applicable. In this case the asset transfer would be the result of ESKOM providing a municipal service to the local community, and now needs to develop a bigger substation on municipal land in order to provide electricity for the growing needs of the local community of Garankuwa.

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This statute also makes provision for free transfer of the land to an Organ of State in circumstances where a municipal service is provide for public interest. Circumstances in which transfer of municipal capital assets to organs of state is exempted from sections 14 and 90 20. (1) Section 14(1) to (5) and section 90(1) to (5) of the Act does not apply if a municipality or municipal entity transfers a capital asset to an organ of state in any of the following circumstances: (a) When transfer of a capital asset emanates from a review by a municipality of

its service delivery mechanisms for the performance of a municipal service in terms of Chapter 8 of the Municipal Systems Act and the municipality appoints another organ of state as the preferred option for the performance of the service;

(f) any other circumstance not provided in paragraph (a) to (e), provided that -

(i) the capital asset to be transferred is determined by resolution of the council to be not needed for the provision of the minimum level of basic municipal services and to be surplus to the requirements of the municipality; and

(ii) if the capital asset is to be transferred for less than fair market value,

the municipality takes into account -

(aa) whether the capital asset may be required for the municipality or a municipal entity under the municipality's sole or shared control at a later date;

(iii) the interests of any affected organ of state, the municipality's own

strategic, legal and economic interests and the interests of the local community; and …

Refer to regulation 22 as quoted in the report regarding the Municipal decision-making processes for transfer of exempted capital assets and specific reference to 22 (3); since ESKOM provides electricity in that area of the City of Tshwane’s boundaries. (3) A municipality transferring a capital asset to an organ of state in the circumstances described in regulation 20(l)(a) must take all reasonable steps to ensure that the transfer will result in the continuation of the municipal service concerned at least at the same or better level that would otherwise have been rendered by the transferring municipality had it not transferred the asset. Since the Municipality and ESKOM are Organs of State, MFMA 56 of 2003, section 14(6), is applicable, which prescribes that the supply chain management process is not applicable to the transaction. Bid Committee approval for this transaction is NOT needed, but the Accounting Officer's approval is requred. Tshwane Alienation Policy as approved on 29 November 2007 makes provision for direct sale / transfer to Organs of State, without the requirement of tender or Bid Committee process.

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Therefore, the proposed transaction complies with the MFMA and MAT regulations, and the Alienation Policy. CONCLUSION Group Legal Services Department therefore, recommends that the property be transferred to the Gauteng Local Government and Housing Development subject to the following conditions, which should be added to the recommendations of the report:

That ESKOM bear all costs and fees of registration and transfer of the property into its name.

That ESKOM bear all cost related to the subdivision, and municipal services and its connection fees.

That the Erf 221 Garankuwa Industrial is only used for constructing a substation, and everything needed in the provision of electricity.

The content and draft recommendations of the report is legally in order.

5.7 COMMENTS OF THE HEAD: COMMUNITY AND SOCIAL DEVELOPMENT

SERVICES The Regional Administration has no objection with the proposed lease to the successful bidder provided that all the relevant land use rights applicable in the City of Tshwane are adhered to

5.8 COMMENTS OF THE HEAD: EMERGENCY MANAGEMENT SERVICES

The purpose of this report is to obtain approval to transfer Portion of Erf 221 Garankuwa Industrial to Eskom, an organ of the state, for purposes of construction of a new 11kV substation and relocation of existing Cables, in terms of Section 14(6) and MAT Regulation 20 (1) (f) and MAT Regulation 22. The Emergency Services Department takes cognisance of the content of the report and further supports the recommendation(s) as set out in the report. However, the following must be taken into consideration during the developmental phase when a building is constructed: access for fire-fighting and rescue purposes must be provided in accordance with Regulation T(1)(1)(e) of the National Building Regulations, read with the Deemed to Satisfy rules, Clause 4.54 of SANS 10400 – 2010 (The application of the National Building Regulations). Any further structures/buildings being erected on the premises must conform to the provisions of the National Building Regulations and the mentioned National Standard: SANS 10400. Communication channels for close liaison between the future developer’s professional team and the operational divisions of this department (Fire Brigade, Emergency Medical Services and Disaster Management) must be established in the planning, construction and commissioning phases of the development, for purposes of the fire protection, fire installation, pre-incident and emergency plans are required.

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MANAGEMENT The Environmental Management Department has no objections to the application from environmental management and open space management perspective. Notwithstanding the above, all other relevant National, Provincial and CoT legislative and policy requirements pertaining to the proposed development must be met including where necessary the undertaking of Environmental Impact Assessment and acquisition of Environmental Authorisation in terms of the National Environmental Management Act (NEMA) from the Gauteng Department of Agriculture and Rural Development.

5.10 COMMENTS OF THE HEAD: HEALTH

The purpose of this report is to obtain approval to register servitude over municipal property known as portion of ERF 221 GARANKUWA Industrial for purposes of construction of a new 11kV substation to the existing servitude in terms of the approved Municipal's Alienation Policy. The Health and Social Development Department supports the recommendations of the report subject to adherence to the relevant health policies and legislation.

5.11 COMMENTS OF THE HEAD: HOUSING AND HUMAN SETTLEMENT

The purpose of the report is to obtain approval to transfer portion of Erf 221 Garankuwa Industrial to Eskom for construction of a new 11KV Substation and relocation of existing cables. the application to acquire Erf 221 Garankuwa Industrial, measuring 540m2, is currently zoned "industrial" Housing has no objection to the report and the recommendations are supported.


None.

6.2 FINANCES Income will be derived from service delivery.


Refer to paragraph 3.1, in the LEGISLATIVE FRAMEWORK paragraph for the applicable terms of Section 14 of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003), as quoted.

6.4 COMMUNICATION

Notice of transfer envisaged in recommendation will be given in terms of Section 79(18) (b) of the Local Government Ordinance, 1939 (Ordinance 17 of 1939). Should any objections to or representation in respect of the proposed be received, the proposed lease, together with such objections and/or representations, will be submitted to the Council for consideration and a final decision.Should no objections and/or representations be received, the process be proceeded with in terms of the municipality’s Alienation Policy.

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31 January 2013.

7. CONCLUSION

According to all comments received from the relevant department, the above mentioned property is not required for Municipal Services and further confirm that conditions as laid down by the department in their comments will be incorporated in this report.

The Mayoral Committee on 9 March 2017 resolved to recommend to Council as set out below: ANNEXURES: A. Sketch Plan B. Valuation report C. Council resolution 31.01.2013 (Proposed lease of Erf 221 Ga-Rankuwa Industrial) RECOMMENDED: 1. That resolution 3 of the Council resolution dated 31 January 2013 to lease erf 221

Ga-Rankuwa Industrial, be rescinded and that the property be transferred as follows;

2. That Council approves the transfer of Portion of Erf 221 Ga-Rankuwa Industrial

measuring about 540m² in extent indicated as figure GDEF on a sketch plan attached as Annexure "A" to Eskom an organ of state, for purposes of construction of 11 kV substation and relocation of existing cables.in terms of the Municipal Finance Management Act (MFMA) Section 14(6) and MAT Regulation 20(1) (a) and 20 (1)(f), and MAT Regulation 22;

3. That the transfer of Portion of Erf 221 Ga-Rankuwa Industrial for purposes of

construction of 11 kV Substation and relocation of existing cables be granted at the applicant's cost;

4. That the proposed subdivision of Erf 221 Ga-Rankuwa Industrial, into two portions

about 540m² in extent indicated as figure CDEF and the remainder which will remain for municipal owned be approved;

5. That Notice of transfer to an organ of state, be given in terms of section 79(18)(b) of

the Local Government Ordinance, 1939 (Ordinance 17 of 1939). Should no objections and/or representations be received, the process must be proceeded with in terms of the Municipality’s Alienation Policy. That should there be any objections to or representatives in respect of the transfer, together with such objections and/or representations, be submitted to the council for consideration and a final resolution;

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6. That the subdivision will be at the cost of Eskom; 7. That Eskom relocated the existing Eskom electricity cables over Erf 221 Ga-

Rankuwa Industrial at its cost, to the proposed portion of Erf 221 Ga-Rankuwa Industrial to be transferred to Eskom, and the Erf boundaries of the proposed remainder, to that remainder is not burdened with Eskom servitudes, preventing development on the remainder of the erf. The Eskom servitudes on Erf boundaries of the proposed remainder of the erf, will be registered at Eskom servitudes on the Erf boundaries of the proposed remainder of the erf, will be registered at Eskom's cost, after development the substation and cables are reallocated;

8. The cost of the registry of the property in the Deed Office will be for the applicant's

account; 9. That the property be transferred to the beneficiary free of charge; 10. That the Municipality's further conditions of transfer usually applicable on a

transaction of this nature and the conditions embodied in this report be applicable; and

11. That the Group Head: Group Legal and Secretariat Services be authorised to issue

power of attorney to the beneficiary so that they can lodge the applications necessary for the development of the property.

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221

168

169

223

163

222

251

2

water line

water line

sewer line

sewer line

water line

storm water

street light

electric pole540m²

15. 00

15. 00

3 6 . 0 0

3 6 . 0 0

SKETCH PLANof proposed servitude over

Erf 221

GA-RANKUWA INDUSTRIAL

Scale 1:1 000

I S Bredenkamp February 2014

A

B

C

D

E

F

G

Notes:

1. The figure ABCEF represents Erf 221 = 2062m².

2. The figure GDEF represents the proposed servitude = 540m².

3. All dimensions are subject to final survey.

4. This plan was prepared from the 2011 aerial photography. No survey was done.

STREET

STREET

Existing Substation

CPD 9/3/1/6 Att : V Mapoti S080/14

87

MarieB1

Typewritten Text

ANNEXURE A

88

MarieB1

Typewritten Text

ANNEXURE B

93

MarieB1

Typewritten Text

ANNEXURE C

Reference No 94911/2 Pule M Mmutlana (4488) COUNCIL: 30 March 2017 17. GROUP PROPERTY DEPARTMENT

PROPOSED REGISTRATION OF SERVITUDE OVER PORTION 1, 6 AND 12 OF THE FARM RIETVALLEI 377-JR (From the Executive Committee: 19 September 2016 and the Mayoral Committees: 21 September 2016 and 9 March 2017)

1. PURPOSE The purpose of the report is to obtain approval to register servitude over Portion 1, 6 and 12 of the farm Rietvallei 377-JR for Rand Water R5 Pipelines, in terms of Section 14(2) of the Municipal Finance Management Act (Act 56 0f 2003) and MAT Regulation.


Promote good governance and active citizenry. To improve financial sustainability

3. BACKGROUND

Rand Water has submitted applications for the registration of servitude over the following Municipal properties; Remainder of portion 1 of the Farm Rietvallei 377 JR. measures 15,1151 ha in extent, indicated as figure ABCDEFGH A1 H1 JKLMNPQR, Portion 6 measuring 4,0156 ha in extent, indicated as figure A1 B1 C1 D1 A2 H2 E1 F1 G1 H1 and Portion 12 of the farm Rietvallei 377 JR, measures 7,7042 ha in extent indicated as figure A2 B2 C2 D2 A3 D3 E2 F2 G2 H2, on the sketch plan attached as Annexure "A" and all zoned "Undetermined". Rand Water is a service provider responsible for transporting potable water to various areas such as Mamelodi and surrounding city of Tshwane Metropolitan area, now they intends to develop and construct a R5 pipeline infrastructure over the above mentioned Municipal land in order to stabilize the increasing water demand. Since its Organ of the state, the above properties can be transferred in term of section 14(6) of the Municipal Financial Management Act, to allow this organ to provide the necessary services required by the Municipality. It has to be noted that this is the proposed alternative route aligned alongside the eastern boundary of the Rietvallei Nature reserve therefore does not fall within Rand Water's existing servitude (within the reserve).

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4. DISCUSSION The proposal to register a servitude for R5 pipe lines over the above mentioned properties was circulated to all the relevant departments for comments, and all comments received are in favor of this proposal as there is a need for the City of Tshwane to acquire more supply of water in order to address the need of the community. However the applicant has previously installed the infrastructure of two pipes towards the Vlakfontein area to serve the water need but now due to the demand it has proved to be insufficient and does no longer address the need as envisaged. therefore it is recommended that the application to install duplication of the R5 Steel Pipelines be considered to enable the Rand Water to supply clean and potable water.


Cognisance is taken of the contents of the report. Since the proposed registration will be dealt with in accordance with the legislative framework, the Group Financial Services Department cannot raise any objection to this action. For accounting and administrative purposes it is noted that all the documentation relevant to the registration of the servitude/s will be submitted to the Asset Management Unit for processing the necessary entries in the Asset Register. It is recommended in the report that the cost for the registration will be borne by the applicant. The applicant of the above mentioned servitude/s must submit proof that all municipal rates and taxes and municipal service charges payable by them are not in arrears. The compensation amounts for the above servitudes are as follows: Portion Size (m²) Compensation 1/R 151 151: R750 000, 6 40 156: R200 000 and 12 77 042: R385 000.In the determination of the above compensation it is assumed that the servitudes are for Rand Water purposes

5.2 COMMENTS OF THE CHIEF OF POLICE

The purpose of the report is to obtain approval to register servitude over Portion 1, 6 and 12 of the farm Rietvallei 377 JR for Rand Water R5 Pipelines, in terms of Section 14(2) of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) and MAT Regulation. The Tshwane Metro Police Department takes cognisance of the content of the report and further supports the recommendation(s) as set out in the report. It should be noted that the property must be utilised for the purposes as stipulated within the land use zoning for the specific property and access to and from the premises must be provided in accordance with the National Road Traffic Act, 1996 (Act No. 93 of 1996), as amended.

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5.3 COMMENTS OF THE GROUP HEAD: UTILITY SERVICES 5.3.1 ENERGY AND ELECTRICITY

This application is inside Tshwane's and Electricity supply area and therefor we have no objections to the proposed registration of servitude. However, there are existing Eskom 275kV electrical service servitudes to the Njala Substation. Application to register servitudes must also be made at Eskom Transmission and Distribution.

5.3.2 WATER AND SANITATION

The Water and Sanitation Department supports the report.


SPATIAL PLANNING The granting of a right to register a servitude over a Portion of the Remainder of Portion 1of the Farm Rietvallei 377JR (indicated as figure ABCDEFGH A1 H1 JKLMNPQR on the Diagram attached as Annexure "A"), zoned “Undetermined” and measuring approximately 15,1151ha and a Portion of the Remainder of Portion 6 of the Farm Rietvallei 377JR (indicated as figure A1 B1 C1 D1 A2 H2 E1 F1 G1 H1 on the Diagram attached as Annexure "A"), zoned “Undetermined” and measuring approximately 4,0156ha and a Portion of Portion 12 of the Farm Rietvallei 377JR (indicated as figure A2 B2 C2 D2 A3 D3 E2 F2 G2 H2 on the Diagram attached as Annexure "A"), zoned “Undetermined” and measuring approximately 7,7042ha in favour of Rand Water is supported.

5.4.1 CITY PLANNING AND DEVELOPMENT

Your request for this departments C9 comment refers. 1. Application has been made to The City of Tshwane, for the registration of a

servitude, for the distribution/transporting of water by Rand Water. 2. In terms of the Tshwane Town-Planning Scheme, 2008, the mentioned farm

portion is zoned as Undetermined. 3. In principle this Department has no objection to the proposed registration of the

mentioned servitude over the farm portion. 5.5 COMMENTS OF THE GROUP HEAD: ROADS AND TRANSPORT

The application to obtain approval to register a servitude for Rand Water over Portion 1, 6 and 12 of the Farm Rietvallei 377 JR is supported by this Department.


SERVICES SOUTH AFRICAN LAW REGARDING SERVITUDES

A servitude is a right that one person has to use or enjoy the property of another person - other than by means of a lease. A servitude provides a right to legally use property belonging to someone else.

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A servitude comes into existence as a right only when it is registered against the title deed of a property. Unless a servitude is registered against the title deeds of the properties in the Deeds Registry, it will not be binding on subsequent owners of the property except if they were aware of it.

LEGISLATION:

All property rights on municipally owned land may only be transferred if complied with Section 14(2) (a) & (b) of the Municipal Finance Management Act, 2003 (Act 56 of 2003) (MFMA) and Chapter 2 of the Municipal Asset Transfer Regulations (MAT Regulations) Regulation 5(1)(b). In terms of the Local Government: Municipal Asset Transfer Regulation 34 (1) (b) municipality may grant of a right to use municipal property.

The proposed transaction complies with Section 14 of the MFMA and the Local Government: Municipal Asset Transfer Regulation 34 (1) (b).

The City of Tshwane Alienation Policy does not address servitudes over municipal land, and is therefore not applicable.

DISCUSSION OF RECOMMENDATIONS

The words “the following portions of the farm Rietvallei 377 JR are not required for basic municipal services” are incorrect with regard to granting a servitude over land that remains in the ownership of the Municipality.The Municipality as land owner can still execute all its ownership rights on the property, as long as the servitude right being granted is not being infringed upon. Therefor Recommendation 8 can be deleted.

The following Recommendations need to be added to the report: 1. That Council consent to the registry of the water servitudes, as specified in

recommendation 1.

2. That the fair market value for the servitudes, as determined by the Property Valuation Division of the Municipality, be received in exchange for the granting of the water servitudes.

3. That the consent is given by Council subject there to that the consent from Eskom be obtained by Rand Water for the registration of the servitude in the area where there is an existing Eskom 275 kv electrical services servitude.

CONCLUSION Group Legal Services Department hereby submits that the report is legally in order and supported subject to the amendments as set out above.

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5.7 COMMENTS OF THE HEAD: COMMUNITY AND SOCIAL DEVELOPMENT SERVICES The purposed registration of a servitude over Portion 1, 6 and 12 of the farm Rietvallei 377 JR for Rand Water R5 Pipelines , in terms of Section 14(2) of the Municipal Finance Management Act (Act 56 0f 2003) and MAT Regulation, is supported.

5.8 COMMENTS OF THE HEAD: EMERGENCY MANAGEMENT SERVICES

The Emergency Management Services Department does not have any objection to the proposed registration of the servitude as mentioned in the report.


MANAGEMENT Following discussions with Rand Water regarding the Environmental Authorisation (Gaut: 002/13-14/E0045) issued in June 2012, City of Tshwane’s Environmental Management Services Department support Rand Water understanding that the proposed route alignment is the preferred alternative route as detailed in the application with reference to the Rietvlei Nature Reserve. The alternative alignment does not fall within Rand Waters’s existing servitude (within the Reserve) but rather alongside the eastern boundary of the Reserve. City of Tshwane’s Environmental Management Services Department supports the above route alignment and recommends that a new servitude along the boundary of the Rietvlei Nature Reserve shall be made available for Rand Water's use. This Department thereby confirms that the alternative route alignment is an environmentally viable option.

5.10 COMMENTS OF THE HEAD: HEALTH

The Health and Social Development Department takes note of the contents of the report and its recommendations. The Department however that should a building or any structure be developed on the premises, no activity in the building should emit noise that is audible beyond the boundaries of the premises. Any activity generating noise should be monitored in line with the stipulations of the Noise Control Regulations. Furthermore during operationalization of the above mentioned property all health regulation and by laws should be adhered to.

5.11 COMMENTS OF THE HEAD: HOUSING AND HUMAN SETTLEMENT

In principle this Department has no objection to the proposed registration of the mentioned Rand Water servitude over the farm Portions 1, 6 and 12 of the farm Rietvallei 377-JR.


None.

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6.2 FINANCES The income will be generated (see comments from the Finance Department and the attached valuation).


This transaction complies with the following Municipal Asset Transfer Regulations: 3.1 LEGISLATIVE FRAMEWORK In terms of the Municipal Asset Transfer (MAT) Regulations published in terms of the MFMA on 22 August 2008, registration of servitude of municipal property is authorised as follows: 34 "Granting of rights to use, control or manage municipal capital assets (1) A municipality may grant a right to use, control or manage a capital asset

only after -

(a) the accounting officer has in terms of regulation 35 conducted a public participation process regarding the proposed granting of the right; and

(b) the municipal council has approved in principle that the right may be

granted. (2) Subregulation (1)(a) must be complied with only if -

(a) the capital asset in respect of which the proposed right is to be granted has a value in excess of R10 million; and

(b) a long term right is proposed to be granted in respect of the capital

asset. (3) (a) Only the municipal council may authorise the public participation

process referred to in subregulation (1)(a).

(b) A request to the municipal council for authorisation of a public participation process must be accompanied by an information statement stating -

(i) the reasons for the proposal to grant a long term right to use,

control or manage the relevant capital asset;

(ii) any expected benefits to the municipality that may result from the granting of the right;

(iii) any expected proceeds to be received by the municipality from

the granting of the right; and

(iv) any expected gain or loss that will be realised or incurred by the municipality arising from the granting of the right.

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(4) A municipal council may delegate to the accounting officer its approval power referred to in subregulation (l)(b) excluding the power to grant long term rights to use, control or manage capital assets of a value in excess of R10 million."

"36 The municipal council must, when considering in terms of regulation 34(1) (b)

approval for any proposed granting of a right to use, control or manage capital assets, take into account-

(a) whether the capital asset may be required for the municipality’s own

use during the period for which the right is to be granted;

(b) the extent to which any compensation to be received for the right together with the estimated value of any improvements or enhancements to the capital asset that the private sector party or organ of state to whom the right is granted will be required to make, will result in a significant economic or financial benefit to the municipality;

(c) the risks and rewards associated with the use, control or management

of the capital asset in relation to the municipality’s interests;

(d) any comments or representations on the proposed granting of the right received from the local community and other interested persons;

(e) any written views and recommendations on the proposed granting of

the right by the national treasury and the relevant provincial treasury;

(f) the interests of any affected organ of state, the municipality’s own strategic, legal and economic interests and the interests of the local community; and

(g) Compliance with the legislative regime applicable to the proposed

granting of the right." B. ALIENATION POLICY There is no existing policy for the granting of servitude. Each application is being dealt with on its own merits.

6.4 COMMUNICATION

Notice of the registration of the servitudes envisaged in recommendations will be given in terms of section 79(18) (b)of the Local Government Ordinance, 1939 (Ordinance 17 of 1939).Should any objections to or representation in respect of the proposed registrations be received, the proposed servitudes, together with such objections and/or representations, will be submitted to the Council for consideration and a final decision. Should no objections and/or representations be received, the process be proceeded with in terms of the municipality’s Alienation Policy.


None.

114

7. CONCLUSION The comments from all relevant departments have been received on the above mentioned registration and it is confirmed that conditions as laid down by the department in their comments have been incorporated in the recommendations.

The Mayoral Committee on 9 March 2017 resolved to recommend to Council as set out below: ANNEXURES: A. Rand Water Sketch plans B. Randwater way leave approval and extension C. Valuation report RECOMMENDED: 1. That the following portions of the farm Rietvallei 377-JR are not required for basic

municipal services; Portion 1 measuring 15,1151 ha in extent, indicated as figure ABCDEFGH A1 H1 JKLMNPQR, Portion 6 measuring 4,0156 ha in extent, indicated as figure A1 B1 C1 D1 A2 H2 E1 F1 G1 H1 and Portion 12 measuring 7,7042 ha in extent indicated as figure A2 B2 C2 D2 A3 D3 E2 F2 G2 H2 on the sketch plan attached as Annexure "A";

2. That Council consent to the registry of the water servitudes, as specified in

recommendation 1; 3. That the fair market value for the servitudes, as determined by the Property

Valuation Division of the Municipality, be received in exchange for the granting of the water servitudes;

4. That Council approves the registration of servitude over the following portions of the

farm Rietvallei 377-JR; Portion 1 measuring 15,1151 ha in extent, indicated as figure ABCDEFGH A1 H1 JKLMNPQR , Portion 6 measuring 4,0156 ha in extent, indicated as figure A1 B1 C1 D1 A2 H2 E1 F1 G1 H1 and Portion 12 measuring 7,7042 ha in extent indicated as figure A2 B2 C2 D2 A3 D3 E2 F2 G2 H2 on the sketch plan attached as Annexure "A" to Rand Water for purposes of installation of R5 Pipeline, in terms of section 14(2)(a) and (b) of the Municipal Finance Management Act (Act 56 of 2003) and the Local Government: Municipal Asset Transfer Regulation 34(1)(b);

5. That the registration of servitude for Rand Water R5 Pipelines over the municipal

property, Portion 1 measuring 15,1151 ha in extent indicated as figure ABCDEFGH A1 H1 JKLMNPQR, Portion 6 of the farm Rietvallei 377-JR measuring 4,0156 ha in extent indicated as A1 B1 C1 D1 A2 H2 E1 F1 G1 H1 and Portion 12 measuring 7,07042 ha in extent, indicated as figure A2 B2 C2 D2 A3 E2 F2 G2 H2 , all on the sketch plan attached as Annexure "A", be granted, subject to the following conditions;

115




6. That Notice of the granting of the servitude be given in terms of section 79(18)(b) of the Local Government Ordinance, 1939 (Ordinance 17 of 1939). Should no objections and/or representations be received, the process must be proceeded with in terms of the Municipality’s Alienation Policy. Should there be any objections to or representatives in respect of the granting of the servitude, together with such objections and/or representations, be submitted to the council for consideration and a final resolution;

7. That the cost of the registration be borne by the applicant; 8. That the property will be registered as servitude to be used for Water services by

Rand Water; 9. That the consent is given by Council subject there to that the consent from Eskom

be obtained by Rand Water for the registration of the servitude in the area where there is an existing Eskom 275 kV electrical services servitude;

10. That the Municipality’s further conditions of registration of servitude usually

applicable to transactions of this nature or other conditions that will be set by the Municipality will be applicable; and

11. That the Group Head: Group Legal and Secretariat Services be granted Power of

Attorney to enable Rand Water to implement the above-mentioned recommendations.

116

AR B

Q CP

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L

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C1F1 D1A2H2

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Existing 35m wide servitude

Proposed 35m wide serv itude

PORTION 6/R

PORTION 34

PORTION 4/R

PORTION 11

PORTION 7

PORTION 12

PORTION 9

PORTION 2/R

PORTION 3/R

PORTION 13/R

PORTION 1/R

PORTION 6

PORTION 32

PORTION 34

POR TI ON 1/R

PORTION 26/RPORTION 24/R

PORTION 20/R

PORTION R

PORTION 62/ R

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Hennops River

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Witkoppies Spruit

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G E O M A T I C SG E O M A T I C S

S K E T C H P L A NPROPOSED SERVITUDE OVER PORTION 26 OF THE

FARM WITKOPPIES 393-JR, REMAINDER OF THE FARMGROOTFONTEIN 394-JR AND PORTION 1, PORTION 6

AND PORTION 12 OF THE FARM RIETVLEI 377-JR

1:30 000SCALE:

NOTES

1. The figure ABCDEFGH A1 H1 JKLMNPQR = proposed 35m wide servitude over Portion 1 of the farm Rietvlei 377-JR = ±15,1151 ha2. The figure A1 B1 C1 D1 A2 H2 E1 F1 G1 H1 = proposed 35m wide servitude over Portion 6 of the farm Rietvlei 377-JR = ±4,0156 ha3. The figure A2 B2 C2 D2 A3 D3 E2 F2 G2 H2 = proposed 35m wide servitude over Portion 12 of the farm Rietvlei 377-JR = ±7,7042 ha4. The figure A3 B3 B4 A4 C3 D3 = proposed 35m wide servitude over the Remainder of the farm Grootfontein 394-JR = ±1,7466 ha5. The figure A4 B4 C4 D4 = proposed 35m wide servitude over Portion 26 of the farm Witkoppies 393-JR = ±3,2357 ha6. This plan was prepared from the 2013 aerial photography. No survey was done7. All dimensions are subject to final survey

L O C A L I T Y P L A NL O C A L I T Y P L A N 1 : 1 5 0 0 0 01 : 1 5 0 0 0 0

Attention: V. MapotiYour Ref: Our Ref: CPD 9/3/1/6IS Bredenkamp Tel: 012 358-7870Date: June 2015Sheet No: 1Job No: S325/15S325/15

AB

©Water PipeSewer PipeExisting ServitudesProposed servitude

(A3 Landscape)

ELAR DUSPARK X 3ELAR DUSPARK X 6

MORE LETA PARKX 50

MORE LETA PARKX 52 MORE LETA PARKX 62MORE LETA PARKX 64WING ATEPARK X 1

IRENEX 31

MORE LETA PARKX 51

PIERR E VA NRYNE VELDX 15

IRENEX 1

IRENEX 2

IRENEX 9

PIERR E VA NRYNE VELD



PIERR E VA NRYNE VELD X 2



PIERR E VA NRYNE VELD X 7

IRENEX 4

RIETV ALLE IRAN DX 32

IRENEX 5

IRENEX 44

RIETV ALLE IRAN DX 34RIETV ALLE IRAN DX 33

IRENEX 49

IRENEX 39




IRENEX 43IRENEX 55


IRENEX 60


IRENEX 72

RIETVA LLEIR ANDX 47


IRENEX 67

RIETVALLE

IRAND

X 57

RIETVALLEIRA

NDX 14


IRENEX 52

MORE LETA PARKX 60

RIETVALLE

IRAND

X 55

RIETVALLE

IRAND

X 48


RIETVALLE

IRAND

X 62

MOOI KLOO FRIDGE X 13


MOOIK LOOFRIDGE X 14 MOOI KLOO FRIDGE X 10


IRENEX 30

MOOI KLOO FRIDGE





DORIN GKL OOFX 1

RIETVALLE

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IRENEX 36

IRENEX 70

LYTTE LTONMANO R X 1 1

LYTTE LTONMANO R X 5


IRENEX 77


THE H ILLSX 3

THE H ILLSX 4

THE H ILLSX 5

PRAIR IEGIANT SX 3

COUN TRYVIEWESTAT E

COUN TRYVIEWESTAT E X 1

THE H ILLSX 6

IRENE

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IRAND

X 59

IRENEX 50

IRENEX 86

RIETV LEIHEIGH TSIRENEX 10

HIGHV ELDX 7HIGHV ELDX 73

RIETV ALLE IPAR K

IRENE X169

IRENEX 172

IRENE X149

DOOR NVAL LEIX 1

IRENEX 148

IRENEX 64

IRENEX 173

IRENEX 174

IRENE X105

IRENE X175

IRENEX 98

IRENE X106

IRENE X104

IRENE X150

IRENEX 152IRENEX 151IRENEX 153

IRENE X155IRENE X156

IRENEX 154

LYTTE LTONMANO R X 3

DORIN GKL OOF

RIETV LEI

IRENEX 157IRENEX 159

IRENEX 51 RIETV ALLE IRAN DX 21

IRENEX 147

MIDST REA MESTAT E X 5 6

MOREL ETAPA RKX 48

IRENE X185

IRENE X179

IRENE X171IRENE X170

G

117

MarieB1

Typewritten Text

ANNEXURE A

118

MarieB1

Typewritten Text

ANNEXURE B

Kgoro ya Ditirelo tša Ditšhelete tša Dihlopha • Departement Finansiële Groepsdienste • Lefapha la Ditirelo tsa Matlotlo a Setheo Ndzawulo ya Ntlawa wa Vukorhokeri bya swa Timali • UMnyango Wezemisebenzi Yezezimali Zesikhungo

Group Financial Services Department

OFFICE OF THE EXECUTIVE MAYOR Attention: V. Mapoti

8 March 2016

REGISTERING OF SERVITUDES OVER PORTIONS REMAINDER OF PORTION 1, 6 AND 12 OF THE FARM RIETVALLEI 377-JR Your C9 report refers The compensation amounts for the above servitudes are as follows:

Portion Size (m²)

Compensation

1/R 151 151 R750 000

6 40 156 R200 000

12 77 042 R385 000

In the determination of the above compensation it is assumed that the servitudes are for Rand Water purposes.

T.I. Lehobye: Director: Property Valuation F EXECUTIVE DIRECTOR: REVENUE MANAGEMENT

On request, this document can be provided in another official language.

My ref:

W10/1/1/1/510/674/1 (08911)

Tel:

(012) 358 8364

Your ref: Fax: (012) 358 8355 Contact person: T. DU TOIT/lt Email: [email protected]

Finance Department Revenue Management Division Property Valuation Section Room 615 I 6

th Floor I BKS Building I 373 Pretorius Street I Pretoria I 0002

PO Box 2067 I Pretoria I 0001 Tel: 012 358 8377 | Fax: 012 358 8355 Email: [email protected] | www.Tshwane.gov.za

122


MarieB1

Typewritten Text

ANNEXURE C

Umar Banda (8110) COUNCIL: 30 March 2017 18. GROUP FINANCIAL SERVICES DEPARTMENT

(SUPPLY CHAIN MANAGEMENT) IRREGULAR EXPENDITURE INCURRED UP TO 30 JUNE 2016 (From the Executive Committee: 6 March 2017 and the Mayoral Committee; 9 March 2017)

1. PURPOSE

The purpose of the report is: (a) to comply with section 32 of the Municipal Finance Management Act (MFMA)

to inform Council in respect of irregular expenditure incurred by the City of Tshwane (CoT) up to 30 June 2016 ; and

(b) to advise Council on the appropriate actions to be taken in terms of the

MFMA Section 32 and Circular 68 in relation to the expenditure. 2. STRATEGIC OBJECTIVES

To ensure financial sustainability, good governance, financial viability and optimal institutional transformation with capacity to execute its mandate”

3. ABBREVIATIONS AND ACRONYMS CoT City of Tshwane MFMA Municipal Finance Management Act MEC Member of Executive Council

3. BACKGROUND In terms of section 4(2)(a) of the Municipal Systems Act (MSA) the council has a duty to use the resources of the municipality in the best interest of the local community. This duty is extended to individual councillors through the Code of Conduct for Councillors which states that a councillor must: i. “perform the functions of office in good faith, honestly and in a transparent

manner, and ii. at all times act in the best interests of the community and in such a way that

the credibility and integrity of the municipality are not compromised.” All irregular expenditure (payments made without having followed the normal official process of supply chain management) are reported to the Accounting Officer and are governed by Section 32 of the MFMA (Irregular expenditure). Section 1 of Municipal Finance Management Act 56 of 2003 defines irregular expenditure as follows:

123

(a) Expenditure incurred by a municipality or municipal entity in contravention of, or that is not in accordance with, a requirement of this Act, and which has not been condoned in terms of section 170;

(b) Expenditure incurred by a municipality or municipal entity in contravention of, or that is not in accordance with, a requirement of the municipal system Act, and which has not been condoned in terms of that Act;

(c) Expenditure incurred by a municipality in contravention of, or that is not in accordance with, a requirement of the public Office-Bearer’s Act,1998 (Act) No. 20 of 1998) or;

(d) Expenditure incurred by a municipality or municipal entity in contravention of, or that is not in accordance with, a requirement of the supply chain management policy of the municipality or entity or any of the municipality’s by laws, giving effect to such policy, and which has not been condoned in terms of such policy or by law.

but excludes expenditure by a municipality which falls within the definition of “unauthorised expenditure”. Section 32 of the MFMA further states that: 1) Without limiting liability in terms of the common law or other legislation -

(a) … (b) … (c) any political office-bearer or official of a municipality who deliberately

or negligently committed, made or authorised an irregular expenditure, is liable for that expenditure; or

(d) …

2) A municipality must recover unauthorised, irregular or fruitless and wasteful expenditure from the person liable for that expenditure unless the expenditure— (a) ….; and (b) in the case of irregular or fruitless and wasteful expenditure, is, after

investigation by a council committee, certified by the council as irrecoverable and written off by the council.

3) If the accounting officer becomes aware that the council, the mayor or the

executive committee of the municipality, as the case may be, has taken a decision which, if implemented, is likely to result in unauthorised, irregular or fruitless and wasteful expenditure, the accounting officer is not liable for any ensuing unauthorised, irregular or fruitless and wasteful expenditure provided that the accounting officer has informed the council, the mayor or the executive committee, in writing, that the expenditure is likely to be unauthorised, irregular or fruitless and wasteful expenditure.

124

(4) The accounting officer must promptly inform the mayor, the MEC for local government in the province and the Auditor-General, in writing, of - (a) any unauthorised, irregular or fruitless and wasteful expenditure

incurred by the municipality; (b) whether any person is responsible or under investigation for such

unauthorised, irregular or fruitless and wasteful expenditure; and (c) the steps that have been taken—

(i) to recover or rectify such expenditure; and (ii) to prevent a recurrence of such expenditure.

(5) The writing off in terms of subsection (2) of any unauthorised, irregular or

fruitless and wasteful expenditure as irrecoverable, is no excuse in criminal or disciplinary proceedings against a person charged with the commission of an offence or a breach of this Act relating to such unauthorised, irregular or fruitless and wasteful expenditure.

(6) The accounting officer must report to the South African Police Service all

cases of alleged— (a) irregular expenditure that constitute a criminal offence; and (b) theft and fraud that occurred in the municipality.

(7) The council of a municipality must take all reasonable steps to ensure that all

cases referred to in subsection (6) are reported to the South African Police Service if - (a) the charge is against the accounting officer; or (b) the accounting officer fails to comply with that subsection.

4. DISCUSSIONS 4.1 PROVISION IN TERMS OF THE ACT

It is clear from the above that in terms of section 32(2)(b), irregular expenditure may only be written-off by Council if, after an investigation by a council committee, the irregular expenditure is certified as irrecoverable. In other words writing-off is not a primary response, it is subordinate to the recovery processes, and may only take place if the irregular expenditure is certified by Council as irrecoverable, based on the findings of an investigation. With reference to (a) as defined, - in terms of section 170 of the MFMA, only the National Treasury may condone non-compliance with a regulation issued in terms of the MFMA or a condition imposed by the Act itself. The municipal Council therefore has no power in terms of the MFMA to condone any act of non-compliance in terms of the MFMA or any of its regulations. The treatment of expenditure associated with the non-compliance is therefore the responsibility of the Council and is elaborated on later in the report.

125

With reference to (b) as defined – there is no provision in the MSA that allows for a contravention of the Act to be condoned. Nevertheless, should a municipality wish to request that an act of non-compliance with any provision of the MSA be condoned, then the accounting officer should address the request to the Minister of Co-operative Governance and Traditional Affairs, who is responsible for administering the MSA. The resultant expenditure should however be dealt with in terms of section 32(2) of the MFMA. With reference to (c) as defined – there is no provision to allow irregular expenditure resulting from a contravention of the Public Office-Bearers Act to be condoned. This is consistent with section 167(2) of the MFMA, which provides that such irregular expenditure cannot be written-off and must be recovered from the political office-bearer concerned. With reference to (d) as defined – a council may condone a contravention of the council approved SCM policy or a by-law giving effect to such policy, provided that the contravention, is not also a contravention of the MFMA or the SCM regulations, in which case (a) applies and then only National Treasury can condone a contravention of the SCM regulations. Any such requests must be accompanied by a full motivation and submitted to [email protected] for consideration. Once the Accounting Officer or Council becomes aware of any allegation of irregular expenditure, such allegation may be referred to the municipality’s own Internal Audit Unit or any other appropriate investigative body for investigation, to determine whether or not grounds exist for a charge of financial misconduct to be laid against the official liable for the expenditure.

5. IRREGULAR EXPENDITURE INCURRED

The financial statements for the year ended 30 June 2016 disclosed an amount of irregular expenditure that has accumulated over a number of years. This irregular expenditure has not been dealt with by council in terms of the MFMA as summarised above. With a view to achieving full compliance with laws and regulations, it is imperative that these cases as disclosed be investigated and handled appropriately in terms of section 32 (2) of the MFMA and Circular 68 as issued by the National Treasury. The details of the expenditure per financial year is included below:

126

Irregular expenditure - Audit adjustment as per Annual Financial Statements for 2011/12 financial period

Department Financial Period

Description Reason Amount Action taken

GFS: SCM 2011/12 Appointments of services providers through Regulation 36 - Deviation from procurement processes

Irregular expenditure during 2011/12 for deviations approved in 2010/11 not in line with Regulations 36. 7,898,220.00

None. To be referred for investigation

GFS: SCM 2011/12 Non-Disclosure of awards made to spouse Disclosure of other state employees

Non-compliance with MFMA SCM regulation 13

37,860,195.00


Total 45,758,415.00




GFS: SCM 2013/14 Disclosure of other state employees Non-compliance with regulation 44 of MFMA – persons in service of CoT

8,328,629.00


GFS: SCM 2013/14

Appointment of goods and services

Rotation of suppliers 505,891.00 None. To be referred for investigation

GFS: SCM 2013/14 Procurement splitting 427,439.00

GFS: SCM 2013/14 Unfair and subjective awards 189,999.00

GFS: SCM 2013/14 3 Quotations not obtained 68,101.00

GFS: SCM 2013/14 Lowest price quotation not selected 80,548.00

Roads and Transport and GFS: SCM

2013/14

BRT Project construction of BRT Infrastructure on line 1A:CBD to Wonderboom railway station section 1A-3 (Mansfield avenue from Louis Trichardt street to Rainbow Junction

BRT system contract 239 79,161,683.00


GFS: SCM 2013/14 Goods and services awarded to employees of City of Tshwane

Transactions with employees 1,794,764.00 None. To be referred for investigation

GFS: SCM 2013/14 Disclosure of awards made to spouse No disclosure of awards to spouses of employees

2,416,421.00 None. To be referred for investigation

GFS: SCM 2013/14 Appointment of goods and services Value of awards made not disclosed

1,202,640.00 None. To be referred for investigation

127



GFS: SCM 2013/14 Appointments of services providers through Regulation 36 - Deviation from procurement processes

SCM deviations non-compliant with regulation 36

24,773,145.00


GFS: SCM 2013/14 Procurement process of goods and services Non-compliance with section 19(a) of SCM regulations – PEU

177,557,908.00


Total 296,507,168.00

Ex-post facto payments cases in terms of irregular expenditure of Section 32 of MFMA for the period July 2014 to June 2015, 2014/15 financial period.


Description Reason Amount EAC Resolution Action Comments

Service Infrastructure: Energy and Electricity

2014/15

Request to receive additional electricity prepaid meters and payment of the meters ordered under CB188/2010 specifications and terms

Purchase order placed without approval

R 37,000,000.00

The committee approved the ex post facto payment and that Section 32 of MFMA be implemented in that the matter be investigated and appropriate action taken against the officials responsible.

Matter handed to Group Audit and Risk for investigation

Waiting for outcome

Housing and Human Settlements: Housing provision and Resource management

2014/15

Request for approval of payment of variation orders for Nellmapius Ext.6 Roads and Storm water project

Variation orders for additional work

R 6,058,062.82



Waiting for outcome

Service Infrastructure: Water and Sanitation

2014/15

Ex Post Facto payment and request to utilize Messrs Nyoni and KK Construction JV retention money for the remedial work of the sewerage pump station and 500mm rising (CB113/2009) main in new Eersterust

Fixing of pump station

R 433,200.20



Waiting for outcome

128




2014/15 Report to approve Ex-facto payment for the War-on-Lakes programme

Services rendered on War-on-Leaks programme

R 2,025,502.27



Waiting for outcome

Office of the Executive Mayor

2014/15

Approval to condone ex post facto additional costs for the attendance of the twentieth conference of parties to the United Nations Convention on Climate Change and the Convention meeting of parties to the Kyoto Protocol (UNFCCC COP 20/CMP 10) held from 01 to 12 December 2014 in Lima, Peru

Additional transport and accommodation costs for Kyoto Protocol

R 76,240.00



Waiting for outcome


2014/15

Ex Post Facto payment and request to utilize Messrs Nyoni and KK Construction JV retention money for the remedial work of the sewerage pump station and 500mm rising (CB113/2009)main in new Eersterust

Remedial work done

R 176,862.57



Waiting for outcome

Economic Development (Sector Support and Analysis)

2014/15

Approval for the hosting of Tourism star grading acknowledgment ceremony in partnership with the tourism grading council of South Africa (TGCSA) at the CSIR international convention centre on the 23rd April 2014

Ex - post facto Payment for hosting of Tourism star grading acknowledgment ceremony in partnership with the tourism grading council of South Africa

R 307,738.39



Waiting for outcome

129




2014/15 Approval to pay invoices for services rendered (One Time Vendor' process)

Ex - post facto Payment (payment delayed due to dispute between CoT and the Njabzen Media)

R 1,379,387.57



Waiting for outcome

Office of the Executive Mayor: Strategic Interest Group Development

2014/15

Services rendered during the Womens' Month launch which took place on 1 August 2014 at Mabopane and city services rendered at the Union Buildings on 9 August 2014

Ex - post facto Payment (Poor planning was noted) for Womens' Month launch

R 29,750.00



Waiting for outcome


2014/15

Payment of services rendered during the Inaugural Media Development and Diversity Summit and Launch of the Community Media Support Fund, held on 13 November 2014 at Freedom Park

Ex - post facto Payment due to unforeseen administrative delays even though planning started well in advance

R 599,245.01



Waiting for outcome


2014/15

The construction of various roads and stormwater systems in Tshwane as and when required: Upgrading of Maunde Street between Khoza and Quagga Road Intersections

Ex - post facto Payment due to supplementary work executed under the contract

R 14,260,000.00



Waiting for outcome

130



Tshwane Metro Police

2014/15

To pay service provider for the operation and maintenance of the CoT CCTV services for the month of October 2014

Ex - post facto Payment due to Impracticality of terminating the contract while CB227/2013 were still to be concluded

R 2,473,800.00



Waiting for outcome

Corporate and Shared Services

2014/15

Payment to Managed Integrity Evaluation (MIE) for verification of Qualifications

Ex - post facto Payment for verification of Qualifications

R 30,734.35



Waiting for outcome

Service Infrastructure: Energy and Electricity

2014/15

Security services for the construction of 300MVA 132kV power line in Mamelodi and Hatherley area

CB228/2009 was cancelled, services seen as emergency and impractical to re-advertise as contractors were already on site

R 232,896.00



Waiting for outcome

Total R 65,083,419.18



Description Reason Amount Action

GFS: SCM 2014/15 Transaction with CoT employee in the service of the state

Non-compliance with regulation 44 of MFMA – persons in service of CoT

186,775.00


GFS: SCM 2014/15 Transaction with employees in the service of the state

Awards to employees of other state institutions

1,920,492.00


GFS: SCM 2014/15 Supply of goods and services not rotated Rotation of suppliers 68,322.00


131



GFS: SCM 2014/15 Procurement Splitting of quotations from R30 000 to R200 000

Procurement splitting 231,250.00


GFS: SCM 2014/15 3 Quotations not obtained for quotations from R2000 to R30 000

3 Quotations not obtained 11,288.00


GFS: SCM 2014/15 EMS WS 02-2014/15 - expired BBBEE certificate considered

Expired BBBEE certificates 38,029,172.00


GFS: SCM 2014/15 Procurement of PEU capital Non-compliance with MFMA, SCM Regulations and PPP regulations

179,999,729.00

None. To be referred for investigation. Matter also in court.

GFS: SCM 2014/15 Procurement of the supply of fuel Supply of fuel outside of the SCM process 33,427,814.00



2014/15

BRT Project construction of BRT Infrastructure on line 1A:CBD to Wonderboom railway station section 1A-3 (Mansfield avenue from Louis Trichardt street to Rainbow Junction

BRT system contract CB239

101,871,461.00


GFS: SCM 2014/15 Procurement process of goods and services Non-compliance with section 19(a) of the SCM regulation - PEU 808,333,532.00


Total 1,164,079,835.00

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Ex-post facto payments cases in terms of irregular expenditure of Section 32 of MFMA for the period July 2015 to June 2016, 2015/16 financial period.



Water and Sanitation

2015/16 Installation of Hydropower station in Annlin Reservoir

Contract CB297/2011 expired, contractor (Just Right Trading) allowed to complete work due to critical nature thereof

2,191,022.00

The committee approved the ex post facto payment and that corrective action be taken by the CM in respect of Section 32 of MFMA and circular 68 of MFMA in that the matter be investigated and appropriate action taken against the officials responsible.


Waiting for outcome


2015/16

Request to deviate from normal supply chain management processes in terms of the municipal finance management (MFMA) Act Regulations 36 and Supply Chain Management policy of the City of Tshwane

Irregular expenditure occurred due to payments for months of Dec 2014 until May 2015. Due to staff shortage contractor kept on site for waste water treatment.

516,000.00



Waiting for outcome

Environmental Management Services

2015/16

Appointment of supplier of liquid petroleum gas, oxygen, acetylene and argon gas to the Crematorium

Irregular expenditure to pay supplier as the Crematorium cannot be without the various gasses. As well as ex facto payments incurred for the period since March 2015

82,020.00



Waiting for outcome

133



Emergency Services (Support and Administration)

2015/16

Ex Facto Payment for sanitary services to Tshwane Hygiene Services

Corporate tender for sanitary services was due to start July 2014 but supplier could only supply services from August 2014. SAP was close for the FY-end at the time and pre-approval could not be done for 3 quotation process, Tshwane Hygiene was lowest and was used as their bins supplied via previous tender (expired June 2014) was still used and they were therefore requested the service for the month

3,763.15



Waiting for outcome

Tshwane Metropolitan Police Department

2015/16

Approval to condone ex post facto payment for the care of horses

TMPD 03-2014/15 not yet awarded and under procurement processes.

452,976.72

The committee approved the ex post facto payment and noted that the ex post facto created was unavoidable and that the tender is at Bid Evaluation Committee.

N/A N/A


2015/16

Payment of the service provider for the emergency work in the water treatment works of the City

Lack of preventative maintenance due to shortage of staff and resources and due equipment failures in the Water Treatment Works (breakages on mechanical and electrical equipment)

6,508,342.51 The committee approved the ex post facto payment.

N/A N/A

Intergovernmental and International Relations

2015/16

Ex-Post Facto payment for the trips undertaken by the City's political principals and officials

City had to be represented and participate in the meetings and events relating to the department's objectives.

91,154.00 The committee approved the ex post facto payment.

N/A N/A

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Environmental Management Services

2015/16

Payment of the service provider for the crematorium project

Amount owed to the service provider for the supply of cremator and crematorium refurbishment

591,658.00



Waiting for outcome

Roads and Transport

2015/16

Payment of the service provider for storage of Maunde PV Solar Plant

Amount owed to the service provider for storage of Maunde PV Solar Plant

370,080.00



Waiting for outcome

Sports and Recreational Services: Culture and Libraries Arts and Culture

2015/16

Payment of the service provider for provision of additional VIP marquee of 150 councillors

Amount owed to the service provider for provision of additional VIP marquee of 150 councillors during the Tribute to SA Music Heroes Concert at Moreleta Park

427,500.00



Waiting for outcome

135



Tshwane Metro Police Department

2015/16

Payment of the service provider for a payment of an air travel ticket for a visit to meddellin, National Columbia Police Department and Transmilenio bus transit system

Amount paid to the service provider for a payment of an air travel ticket for a visit to meddellin, National Columbia Police Department and Transmilenio bus transit system

125,537.00



Waiting for outcome


2015/16

Payment of the City's participation in 15th Annual Oliver Empowerment Awards

Amount owed to the service provider for City's participation in 15th Annual Oliver Empowerment Awards

100,000.00



Waiting for outcome


2015/16

Payment of the service provider for servicing the hosting of the Media Development and Diversity Cocktail event.

Amount owed to the service provider for servicing the hosting of the Media Development and Diversity Cocktail event.

84,000.03



Waiting for outcome

Total 11,544,053.41

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GFS: SCM 2015/16

Supply of Transport

Procurement splitting of quotation and tender

51,200.00

To be investigated by Group audit and Risk

Boot Safety Black Chukk PU/TPU Wool 6 58,500.00

Coupling HDPE Plasson 20MM X 20MM, Adaptor HDPE FOT Plasson 25MM X 20MM 59,984.00

Lamp Fluorescent Slimline 36W 1.2M and 58W 1.5M 58,950.00

Maintenance 59,970.00

Supply, Delivery and Offloading of 5 x Three Phase and Single Phase Hard Wiring Training Panels Including Energy Metering And Motor Starters at TLMA Technical Training Section, and Supply Delivery and Offloading of 10 x AC Volt Relay Panel Hard Wiring At TLMA Technical Training Section

333,400.07

GFS: SCM 2015/16 Luminaire Streetlight 70W Bekalane and TWW Jacket R/Blue J54 Logo 82

Prohibited supplier by National Treasury from

56,235.00 To be investigated

GFS: SCM 2015/16

RTD10 2014/15 - Tender for the maintenance of permanent road traffic markings as the upgrading of the inventories on the road markings management database in accordance with the provisions of the national road traffic act 93 of 1996 in Tshwane as and when required.

Tender advertised less than 30 days

14,154,907.00

Administrative error. No malice, no further action.

GICT and GFS: SCM

2015/16 Appointment of Altech Alcom Matomo for the Municipal Broadband Network Project

Non-compliance with MFMA, SCM Regulations and PPP Regulations

32,688,702.00

To be investigated by Group audit and risk.

GFS: SCM 2015/16

CB71/2013 - Tender for the supply, installation and configuration of an integrated fleet management and vehicle tracking systems: 3 year period

Irregular awarding of tender 37,948,725.00

To be investigated by Group audit and risk

Office of the CM 2015/16 Deviation for the supply, delivery and off-loading of cold water domestic and bulk mechanical water meters and components

Deviation requirement not justified in terms of Regulation 36

38,697,350.00

To be investigated by Group audit and Risk

137



Office of EM, GICT and GFS: SCM

2015/16 Appointment of Project Isizwe for the provision of free Wi-Fi

Non-compliance with MFMA, SCM Regulations (Wi-Fi). Contract over R200 000 not awarded through open bidding

113,938,611.00

To be investigated by Group Audit and Risk


2015/16

BRT Project construction of BRT Infrastructure on line 1A:CBD to Wonderboom railway station section 1A-3( Mansfield avenue from Louis Trichardt street to Rainbow Junction

BRT system contract CB239/2012

87,870,822.00

Ro be investigated by Group audit and risk

Total 325,977,356.07

Irregular expenditure as per Financial Statements up to June 2016, 2015/16 financial period

Irregular expenditure 2016/17 R

Balance as per Audited Annual Financial Statements as at 30 June 2016 1,996,225,480.00

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6. COMMENTS OF THE STAKEHOLDER DEPARTMENTS 6.1 COMMENTS OF THE CHIEF FINANCIAL OFFICER 6.1.1 FINANCIAL PERFORMANCE MANAGEMENT

(Unaltered)

“Cognisance is taken of the purpose, contents and recommendations of the report. It is indicated in the report that the writing off of these amounts will have no financial implications as the expenditures were already accounted for in the relevant financial years. The Budget Office Division will gladly render further financial comments on future report in this regards.

6.1.2 SUPPLY CHAIN MANAGEMENT This Division takes cognisance of the contents of this report and concurs with the comments of the Group Legal Services. SCM Division submits all irregular expenditure reports to council which council referred to MPAC for further investigation and recommendation. These reports are first considered and approved by the Executive Acquisition Committee which also includes Deviations.”

6.2 COMMENTS OF THE GROUP HEAD: GROUP LEGAL AND SECRETARIAT SERVICES

(Unaltered) “The purpose of the report is to comply with section 32 of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003, herein after referred to as ‘the MFMA, 2003) to inform the Executive Mayor and Council on irregular and fruitless & wasteful expenditure incurred by the Municipality as at December 2016 2016/17 financial period and to seek Council approval to commence action, condone and/or write-off in respect of such expenditure. Strategic objective 5, 6 and 7 are relevant, i.e. (a) to promote sound governance, (b) ensure financial sustainability, and (c) organisational development and transformations are applicable to the report. The report is a welcomed one since it is indeed a step in the right direction in complying with sub-sections 2 to 7 of section 32 of the MFMA, 2003 which provides as follows: (2) A municipality must (a) recover unauthorised, irregular or fruitless and

wasteful expenditure form the person liable for that expenditure unless the expenditure-

(a) In the case of unauthorised expenditure, is-

(i) Authorised in an adjustments budget; or (ii) Certified by the municipal council, after investigation by a council

Committee, as irrecoverable and written off by the council; and

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(b) In the case of irregular or fruitless and wasteful expenditure, is, after investigation by a council committee, certified by the council as irrecoverable and written off by the council.

(3) If the accounting officer becomes aware that the council, the mayor or the executive committee of the municipality, as the case may be , has taken a decision which, if implemented, is likely to result in unauthorised, irregular of fruitless and wasteful expenditure, the accounting officer is not liable for any ensuing unauthorised, irregular or fruitless and wasteful expenditure provided that the accounting officer has informed the council, the mayor or the executive committee, in writing, that the expenditure is likely to be unauthorised, irregular or fruitless and wasteful expenditure.

(4) The accounting officer must promptly inform the mayor, the MEC for local

government in the province and the Auditor-General , in writing, of-

(a) any unauthorised, irregular or fruitless and wasteful expenditure incurred by the municipality;

(b) whether any person is responsible or under investigation for such unauthorised, irregular or fruitless and wasteful expenditure; and

(c) The steps that have been taken- (i) To recover or rectify such expenditure; and (ii) To prevent a recurrence of such expenditure.

(5) The writing off in terms of subsection (2) of any unauthorised, irregular or

fruitless and wasteful expenditure as irrecoverable, is no excuse in (b) criminal or (c) disciplinary proceedings against a person charged with the commission of an offence or a breach of this Act relating to such unauthorised, irregular or fruitless and wasteful expenditure.

(6) The accounting officer must report to the South African Police Service all

cases of alleged-

(a) Irregular expenditure that constitute a criminal offence; and (b) Theft and fraud that occurred in the municipality.

(7) The council of a municipality must take all reasonable steps to ensure that all

cases referred to in subsection (6) are reported to the South African Police service if-

(a) The charges is against the accounting officer; or (b) The accounting officer fails to comply with that subsection.

(our emphasis and underlining)

We should mention that three types of action s are provided for in term s of the MFMA, 2003: (a) Civil action for recovery where appropriate; (b) Criminal action ;and (c) Last but not least, disciplinary steps.

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The report is a mere reflection of the factual financial position in relation to unauthorised, irregular or fruitless and wasteful expenditure but it does come out clear as to which amounts should be written off as irrecoverable. Recommendation 2 could cause problems as it is somewhat confusing since if one interprets the said recommendation then it could well be argued that the same effectively sub-delegate the power to write off to another body, official, Department, office bearer or other role-player. Who, we should mention is also not specified. The said recommendation read as follows: “That the council approves the write off of these amounts should they be considered irrecoverable.”

(Unaltered) Whilst we assume that what is proposed here is the consideration by council but one could argue that the said recommendation also enables someone else within the Administration to “consider” such money as irrecoverable. We submit that it is common knowledge that only the council may decide hereon and cannot be delegated in as much as the same may have budgetary implications. Once again, the report should be clear on what and which Amounts are to be written off. As far as recovery by way of civil action is concerned, where appropriate, there should be a case by case investigation and where such person should be dismissed pursuant to disciplinary findings, if any, then there should be a plan of action that the Municipality withhold any payments still due to such person until the matter i.e. recovery, is finalised. It would be prudent if the report could include information hereon and give comfort thereon to Council. It would also be comforting if the report could reveal information on what steps have actually been taken to recover moneys where appropriate as provided for in section 32 (4) C of the MFMA, 2003. Nonetheless we submit that the report is supported in principle.”


Not applicable.

7.2 FINANCES

The total amount of irregular expenditure incurred by the CoT up to 30 June 2016 amount to R1, 996, 225, 480.00. In terms of section 32(2)(b), (4) (5) and (6) of the MFMA it is stated that a municipality must recover irregular or fruitless and wasteful expenditure from the person liable for that expenditure unless the expenditure is after investigation by a council committee, certified by council as irrecoverable and written off by council.

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The accounting officer must promptly inform the mayor, the MEC of local government in the province and the Auditor-General in writing of any irregular expenditure incurred by the municipality and whether any person is responsible or under investigation for such irregular expenditure and steps are taken to recover or rectify such expenditure and to prevent the recurrence thereof. The writing off of any irregular or fruitless and wasteful expenditure is no excuse to conduct in criminal or disciplinary proceedings against a person with the commission of an offence or a breach of the MFMA relating to irregular or fruitless and wasteful expenditure. In all of the above cases, investigation has either started or has been referred to forensic for investigation and the outcome must be presented to Council via MAPC for final resolution.

7.3 CONSTITUTIONAL AND LEGAL FACTORS Refer above. 7.4 COMMUNICATION Not applicable. 7.5 PREVIOUS COUNCIL AND MAYORAL COMMITTEE RESOLUTIONS

Not applicable. 8. CONCLUSION

It is therefore proposed that the Mayoral Committee take cognisance of the report in respect to these irregular expenditure identified and disclosed in the annual financial statement up to January 2017, 2016/17 financial period and that the Mayoral Committee recommends action to be taken in terms of section of section 32 and 125 of the MFMA and/or condone these expenditures.

The Mayoral Committee on 9 March 2017 resolved to recommend to Council as set out below: RECOMMENDED: 1. That cognisance be taken of the irregular expenditure incurred up to 30 June 2016; 2. That Group Audit and Risk finalise investigations and report on a case by case

basis the outcome of the investigation to identify any official or councillor liable for recovery; and

3. That the Member of the Executive Council (MEC) for Local Government and Auditor

General be informed of the action to be taken in relation to the irregular expenditure.

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