AR2005_6chap1 - City of Tshwane Metropolitan Municipality

CITY OF
TSHWANE
metropolitan municipality
making local government work better for you
annual report 2005/06

city of
TSHWANE
metropolitan municipality
annual report 2005/06
ISBN - 978-0-620-38290-8

Our vision ...
is for Tshwane to be the leading African capital city of excellence
that empowers the community to prosper in a safe and
healthy environment.
Our mission ...
is to enhance the quality of life of all the people in the City
of Tshwane through a developmental system of local government
and by rendering efficient, effective and affordable
services.
Our value system ...
has been developed to guide each employee on a daily basis
to realise the vision of the City of Tshwane. The value
system consists of these values:
• Community orientation: Provide and deliver sustainable
services for the whole community based on needs
assessments.
• Transparency: Invite and encourage public sharing and
democratic participation in the Municipality’s activities.
• Commitment: Focus and concentrate on the Municipality’s
core activities in a consistent manner.
• Business orientation: Subscribe to and comply with the
best business practices.
• Accountability: Report regularly to all stakeholders regarding
the Municipality’s performance.
• Integrity: Conduct the Municipality’s business in a fair,
responsible, flexible, equitable and honest manner.
• Non-racialism and non-sexism: Promote mutual respect
and non-discriminatory policies and practices.
The strategic focus areas of the City are based on the manifesto
mandate, which also outlines target dates for the delivery
of specific basic services to all residents. These strategic
areas are:
• Providing quality basic services and infrastructure development
with priority being given to communities
in the northern parts of the city where there are huge
backlogs, whilst ensuring infrastructure maintenance
in all other parts of the city.
• Achieving a higher economic growth rate that is shared
more equitably to ensure that more sustainable jobs
are created and the city is focused on global competitiveness.
• Promoting thriving, sustainable communities jointly
with other stakeholders through programmes that assist
those vulnerable to poverty and ensuring that the
city is clean, healthy and safe.
• Fostering participatory democracy by encouraging
involvement in the day-to-day affairs of the city and
observing the principles of Batho Pele by providing a
caring, accessible, and accountable service.
• Fast-tracking the transformation of the Municipality as
an institution so that it promotes good governance and
high ethical standards, sustains financial viability and
ensures that the staff are more representative of the
society they serve, and so that capacity to execute
mandates is built in through a performance-based approach.
The above strategic focus areas are guided by the long-term
goals outlined in the City Development Strategy. These are to:
• deliver on the manifesto and mandate to improve the
quality of life of the people of Tshwane and to make
local government work better;
• ensure continuity and change by building on the successes
of the past term and to review and align them
to new strategic objectives;
• achieve state-led development through an effective
intergovernmental relations framework that capitalises
on available resources to optimise capacity;
• foster sustainable integrated development focusing on
economic, social and environmental priorities;
• provide quality services, implement the Batho Pele
principles and achieve people-centred development;
• build the City’s institutional capacity to be efficient,
financially viable and aligned to the constitutional requirements
for transformation;
• ensure good governance that fosters participatory democracy,
transparency, accountability and decisive action
against corruption;
• develop strategic partnerships with civic organisations,
business, labour movements, communities and other
institutions in the city to ensure a common vision;
• use e-governance as a means of making government
accessible to the people; and
• capitalise on the capital status of the city and the various
relations with other cities locally and internationally.
1

TABLE OF CONTENTS
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION AND OVERVIEW
Foreword by the Executive Mayor ..................................................................... 4
Executive Review by the Municipal Manager....................................................... 6
Report of the Chairperson of the Audit Committee
for the 2005/06 financial year.......................................................................... 8
Overview of the Municipality............................................................................. 10
Executive summary........................................................................................... 14
CHAPTER 2: PERFORMANCE HIGHLIGHTS
2.1 Free basic services............................................................................... 16
2.2 Key successes and challenges............................................................... 17
2.3 Statistics.............................................................................................. 18
CHAPTER 3: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT
3.1 Organisational structure....................................................................... 22
3.2 Organogram......................................................................................... 23
3.3 Overview of main activities and responsibilities..................................... 24
3.4 Employment equity............................................................................... 26
3.5 Skills development............................................................................... 27
3.6 Performance management.................................................................... 29
3.7 Occupational health and safety............................................................. 30
3.8 Staff information.................................................................................. 31
CHAPTER 4: AUDITED STATEMENTS AND RELATED FINANCIAL INFORMATION
4.1 Auditor-General’s report – financial statements..................................... 36
4.2 Report of the Chief Financial Officer –financial statements..................... 40
4.3 Entities ............................................................................................... 53
4.4 Financial statements............................................................................. 54
4.5 Auditor General’s report – performance measurement........................... 152
4.6 Performance management report.......................................................... 158
CHAPTER 5: FUNCTIONAL SERVICE DELIVERY REPORTING
5.1 Housing, City Planning and Environmental Management......................... 172
5.2 Tshwane Metropolitan Police................................................................. 194
5.3 Service Delivery................................................................................... 194
5.4 Energy and Electricity........................................................................... 203
5.5 Finance................................................................................................ 206
5.6 Corporate Services............................................................................... 208
5.7 Economic Development........................................................................ 208
5.8 Social Development.............................................................................. 214
5.9 Emergency Management Services......................................................... 219
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06
2

CHAPTER 1
INTRODUCTION AND OVERVIEW

Chapter 1
FOREWORD
GROUP ACCOUNTING POLICIES
FOR BY THE EXECUTIVE YEAR ENDED MAYOR 30 JUNE 2006
Dr Gwen Ramokgopa was
inaugurated on 27 May 2006
This annual report concludes the first five years of developmental local government in
South Africa within the context of a democratic dispensation, which was marked by the
establishment of the City of Tshwane in 2000. This report also ushers in a second term of
local government following the successful municipal elections of 1 March 2006. We pay
tribute to the inaugural leadership of the City for laying a firm foundation for a caring, efficient
and accountable metropolitan municipality that came about through the amalgamation
of 14 administrations into a single municipality.
As we deepen our resolve to improve the quality of life of our people, we are also mindful
that our ability to alleviate poverty, unemployment and underdevelopment requires an
economic growth rate at much higher levels with more people participating and benefiting
from economic growth. It is within this context that the long-term strategic direction of the
City will remain on course as we meet our commitment over the next five years to ensuring
that we fast-track the programme of providing basic services such as water and electricity
to all residents, as well as delivering the mega economic infrastructure projects that will
create jobs and attract investment to the city.
This report indicates that, in addition to serving existing residents with various municipal
services, 41 048 of our people who were on the waiting list were provided with houses,
367 346 with water, 335 317 with electricity, and a number of children, elderly people
and those living with disabilities also benefited from the various targeted social support
programmes. More than 2 000 jobs were created and SMME support programmes were
implemented. The city contributed 5,1% to the overall estimated economic growth rate
– an increase of 4,8% from the previous year.
We have recommitted ourselves to working in a much more focused way in the next financial
year to increase the number of households that receive these essential services,
as we continue to expand the number of households that receive free basic water and
electricity.
The City is indeed on track towards improving the quality of life of residents, contributing to
economic growth, improving the quality and efficiency of services, and making local government
work better for all. We acknowledge the contribution of all councillors, management,
other employees, business and civil society. These achievements and successes
serve as a good foundation to build on and address the challenges that remain.
The task of addressing the challenges of inequality and poverty cannot be the responsibility
of government alone. There is a need for concerted action by the whole of the community
of Tshwane, and hence the need to prioritise all initiatives aimed at strengthening
the ward committee system and enable all other community-based organisations to hold
government accountable.
Dr Gwen Ramokgopa
Executive Mayor
4
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06

Chapter 1
EXECUTIVE REVIEW
BY THE MUNICIPAL MANAGER
Mr Nava Pillay
Acting Municipal Manager
The City of Tshwane has come a long way in developing a common identity since the establishment
five years ago of an integrated metropolitan municipality committed to the principles of our
new democracy. The period under review was characterised by a number of milestones, not
only for the Municipality, but for the city and country as well.
With the inauguration of Dr Gwen Ramokgopa as the Executive Mayor on 27 May 2006, the
people of Tshwane unequivocally confirmed their trust in the governing party to deal with poverty,
unemployment and underdevelopment. As we celebrated the 50th anniversary of the
women’s march to the Union Buildings, the women of the city and the country expressed their
confidence in the current dispensation to assist them in the struggle for emancipation and empowerment;
while the youth of the country, celebrating the 30th anniversary of the 1976 student
struggles against the injustices of the past, reaffirmed their support for the party and its ability
to honour their basic human rights.
The City’s commitment to achieving accelerated shared growth and prosperity is aimed, among
other things, at ensuring a more balanced sharing of the benefits of economic growth by addressing
the disparities between the first and second economies. The overarching challenge
and priority is to develop and grow a sustainable economy through collaboration with business,
labour, civil society and the education sector.
A large percentage of the Municipality’s capital budget for 2005/06 was therefore allocated to
the provision of infrastructure and basic services. Important priorities were the allocation of
R10 million towards the establishment of the Tshwane Economic Development Agency, as well
as R33 million for the development of the city’s economic growth infrastructure. Through these
initiatives, among others, the City is confident that it can unlock Tshwane’s potential to make a
significant contribution to job creation.
The performance of the Municipality during the period under review was influenced by the developmental
challenges and opportunities it faced in its effort to enhance the quality of life of all
people in the city. The performance highlights and functional service delivery reports contained
in this document reflect these successes and achievements.
May we continue to enhance the quality of life of all people in the City of Tshwane through increased
service delivery in the years to come.
In conclusion, the City is well prepared and, in partnership with other spheres of government,
the private sector and civil society, it has the necessary resources to ensure that the 2010 World
Cup is a success. We look forward to welcoming the peoples world as they visit and enjoy their
time in the capital. In this regard, we are proud of our past achievements and are confident of
our future endeavours to create a sustainable and liveable city for all our residents.
Mr Nava Pillay
Acting Municipal Manager
6
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06

Chapter 1
REPORT OF THE CHAIRPERSON
of the Audit Committee for the 2005/06 financial year
We are pleased to present our report for the financial year
ended 30 June 2006.
Members of the Audit Committee:
Ms T Moja (Chairperson)
Ms K Rapoo
Mr K Scheepers
Mr P Ngaki
Ms J Huntley
Ms SV Bvuma (Resigned)
The Audit Committee was established in May 2001.
Attendance of meetings
The Local Government: Municipal Finance Management
Act, 2003 (Act 56 of 2003), requires that the Audit Committee
meet at least four times a year. During the financial year
under review, five meetings were held to discuss matters relating
to risk management, internal control, the governance
process and the financial statements.
The attendance record for members of the Committee is as
follows for the 2005/06 financial year:
Member
Number of meetings held
Number of meetings attended
during the financial year
during the financial year
Ms T Moja (Chairperson) 5 5
Ms K Rapoo 5 4
Ms J Huntley 5 1
Mr P Ngaki 5 3
Mr K Scheepers 5 3
Ms SV Bvuma (Resigned) 5 3
Responsibilities of the Audit Committee
The Audit Committee has fulfilled its responsibilities as stipulated
in the Municipal Finance Management Act. The Committee
adopted an appropriate formal charter, which regulated
its affairs. It has also discharged its responsibilities in
compliance with the approved audit charter.
Effectiveness of internal control
The system of internal control is designed to provide a costeffective
assurance that assets are safeguarded and liabilities
and working capital are effectively managed.
In terms of the provisions of the Municipal Finance Management
Act regarding corporate governance, Internal Audit
should provide the Audit Committee and the Municipality’s
management with the assurance that internal controls are
adequate and effective to mitigate the risks applicable to the
Municipality. This was achieved by means of the risk management
process, as well as the identification of corrective
actions and the proposal of improvements to controls and
processes through internal audit reports.
In order to enhance the risk management process of the
Municipality, a Manager: Risk Management has been appointed.
8
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06

In the conduct of its duties, the Audit Committee has, among
other things, reviewed the following:
• The independence and objectivity of both the internal
and the external auditors
• The operational effectiveness of the Internal Audit Unit
and the adequacy of the Internal Audit coverage plan
• The operational effectiveness of the internal controls,
risk management and the governance process
• The procedure for identifying business risks and managing
their impact on the Municipality's strategic objectives
• The risk areas of municipal operations covered in the
scope of internal and external audits
• Coordination with the external auditors, the reports of
significant investigations and the responses of management
to specific recommendations
Furthermore, the Audit Committee was committed to reviewing
on an ongoing basis the actions taken by management
to deal with matters reported by both the external and internal
auditors.
Evaluation of the financial statements
for the year ended 30 June 2006
The Audit Committee has:
• reviewed significant adjustments resulting from the audit;
• discussed the audited annual financial statements with
the external auditors and the Municipal Manager; and
• reviewed the external auditors' management letter and
management's response.
In addition, the Audit Committee will be evaluating the annual
report for the year ended 30 June 2006 in accordance
with the requirements of the Municipal Finance Management
Act.
Ms T Moja
Chairperson of the Audit Committee
9

Chapter 1
OVERVIEW
OF THE MUNICIPALITY
The City of Tshwane Metropolitan Municipality has been
classified as a category A, grade 6 urban municipality by the
Municipal Demarcation Board in terms of section 4 of the
Local Government: Municipal Structures Act, 1998. It was
established on 5 December 2000 through the integration of
various municipal administrations and councils.
The new municipality was formed through the amalgamation
of the following local authorities:
• The Greater Pretoria Metropolitan Council
• The City Council of Pretoria
• The Town Council of Centurion
• The Northern Pretoria Metropolitan Substructure
• The Hammanskraal Local Area Committee
• The Eastern Gauteng Services Council
• The Pienaarsrivier Transitional Representative Council
• The Crocodile River Transitional Council
• The Western Gauteng Services Council
• The Winterveldt Transitional Representative Council
• The Temba Transitional Representative Council
• The Mabopane Transitional Representative Council
• The Ga-Rankuwa Transitional Representative Council
• The Eastern District Council.
The City of Tshwane covers an extensive municipal area
of 3 200 km 2 , stretching almost 60 km east-west and 70 km
north-south. It is inhabited by about 2,2 million people.
The Municipality combined a mayoral executive system with
a ward participatory system in accordance with section 2(g)
of the Gauteng Types of Municipality Act, 2000, and section
2(1)(c)(vii) of the North-West Municipal Structures Act,
2000.
During the period under review, the city was governed by
two executive mayors. The term of office of Father Smangaliso
Mkhatshwa, who was appointed in December 2000,
expired at the end of February 2006. He was succeeded by
Dr Gwen Ramokgopa, who took office as executive mayor in
March 2006, following the municipal elections.
After the March 2006 local government elections, the City
of Tshwane was no longer regarded as a cross-boundary
municipality. This constitutional amendment has assisted
in streamlining intergovernmental relations insofar as planning,
budgeting and the legislative framework between the
spheres of government are concerned.
Notwithstanding the above, for the period under review, new
ward delimitation took place and the number of elected representatives
per political party also changed as follows:
10
POLITICAL REPRESENTATION FOR THE PERIOD ENDING 28 FEBRUARY 2006
POLITICAL PARTY
WARD SEATS
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06
PROPORTIONAL
REPRESENTATION
ACDP 0 2 2
ANC 50* 43 93
ASCORA 0 1 1
DA 23* 24 47
ID 0 1 1
IFP 0 1 1
CDP 0 1 1
PAC 0 1 1
UCDP 0 2 2
TOTAL
FF + 1 0 1
INDEPENDENT
2 0 2
COUNCILLORS
TOTALS 76 76 152
* Vacancies
Vacancies occurred in the following wards:
Wards 18 and 51 – ANC; and Wards 52 and 54 – DA. These vacancies were not filled due to the upcoming elections in
March 2006.

POLITICAL REPRESENTATION FOR THE PERIOD STARTING 1 MARCH 2006
POLITICAL PARTY
WARD SEATS
PROPORTIONAL
REPRESENTATION
TOTAL
ACA 0 1 1
ACDP 0 3 3
ANC 52 35 87
AZAPO 0 1 1
DA 24 23 47
ID 0 1 1
IFP 0 1 1
CDP 0 1 1
NADECO 0* 0 0
PAC 0 2 2
UCDP 0 1 1
FF + 0 7 7
TOTALS 76 76 152
* NADECO’s representation in the Council was withdrawn after an appeal from the CDP which was effected in April 2006.
Shortly after the municipal elections in March 2006, the Executive Mayor announced the ten-member Mayoral Committee and
their respective portfolios, which are as follows:
MEMBER OF THE MAYORAL
COMMITTEE
S Pillay
T Ernest
AM Ditshoke
P Chueu
KC Kekana
S Thipe
SS Dlamini
Z Masondo
BW Mahlangu
A de Klerk
PORTFOLIO *
Roads, Stormwater and Public Transport
Economic Development, Tourism, Airports, Marketing and Communication
Inner-City Regeneration
Housing, City Development and Environmental Management
Corporate and Legal Services
Energy and Electricity
Water and Sanitation
Health and Social Development
Community Safety
Finance and Audit
* The portfolios were subsequently realigned as reflected on page 13.
Councillor K Dau was elected the Speaker of the Council, and Councillor T Komane was elected the Chief Whip of Council.
11

Chapter 1
OVERVIEW
OF THE MUNICIPALITY
Five-year strategic programme
The Executive Mayor, Dr Ramokgopa, as instructed by legislation,
ensured that the Municipality sprang into action with
the launch of the City’s five-year strategic programme: a
plan to make the local government work better for all.
Furthermore, a comprehensive review of the City’s current
service delivery mechanisms was carried out so that it could
develop an alternative service delivery model that would fully
support the City Development Strategy and the five-year
strategic programme (IDP) for the City.
The Alternative Service Delivery (ASD) programme has been
undertaken in an effort to transform the Municipality to deliver
service in an integrated manner. With this programme,
the City will be able to orientate itself to a greater community
focus through a regional model to facilitate customer-centric
service delivery and to re-engineer its business architecture
towards being more efficient.
The five regional structures will make participation by our
people even stronger, bringing local government even
closer to the people. Municipal services will be even more
accessible to all residents and will generally be more
responsive to the developmental needs of the region.
On the basis of the new regional demarcation, each region
will be managed by a regional head. The regions will be responsible
for the decentralised execution of core municipal
functions, such as:
• Regional planning, strategy implementation and monitoring
• Housing
• Health and social development
• Sport, recreation, arts and culture
• Environmental management
• Customer care
Included in each region are structures for councillor and
ward committee support and structures for corporate support
services.
The City of Tshwane also controls a number of municipal
entities that contribute to achieving the Municipality’s objectives
in respect of these core functions.
The ASD programme was initiated in December 2004 and
will be undertaken in the following five stages:
• Phase 1:
• Phase 2:
• Phase 3:
• Phase 4:
• Phase 5:
Developing a potential case for change
Developing an institutional reform
strategy
Developing an implementation solution
Implementing the institutional model
Stabilising change and implementing
continuous improvement
Experience has demonstrated that, to successfully implement
a project of this magnitude, a phased approach should
be adopted. It was therefore resolved that a dedicated programme
manager be appointed and, in consultation with the
acting Municipal Manager, key personnel will be co-opted to
the ASD Programme Management Office.
12
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06

Dr G M Ramokgopa
Executive Mayor
Clr K Dau
Speaker
Clr T Komane
Chief Whip of Council
Clr A M Ditshoke
MMC for City Planning
and Development
Clr C K Kekana
MMC for Community
Safety
Dr A de Klerk
MMC for Corporate
Services
Clr T Ernest
Clr Z Masondo
Clr S Pillay
Clr S S Dlamini
Clr S Thipe
Clr P Chueu
Clr W B Mahlangu
MMC for Agriculture
MMC for Arts,
MMC for Public
MMC for Housing
MMC for Health
MMC for Economic
MMC for
and Environmental
Culture, Heritage
Works and
and Social
Development
Finance
Management
Sports and
Infrastructure
Development
Recreation
Development
13

Chapter 1
EXECUTIVE SUMMARY
In view of its strategic priorities, the activities of the City during
the period under review were focused on the provision
of basic services; the progressive redressing of backlogs in
infrastructure; job creation, and the enhancement of service
delivery and financial management capacity.
The 2005/06 medium-term budget sought to address development
and transformation challenges by deliberately
and purposefully directing resources to the key priorities of
the Municipality. This included additional resources for economic
development, safety and security, and infrastructure
development.
In order to align the strategies to the national and provincial
governments’ growth strategies, the Municipality developed
a comprehensive City Development Strategy, which formed
the basis for resource allocations in the 2005/06 financial
year and which was further underlined by the five-year strategic
programme (IDP). Financial sustainability and viability
remained the key principles, while the development of
a long-term financial strategy ensured compliance with the
Municipal Finance Management Act. This strategy set clear
targets in terms of tariffs, employee-related costs, repairs
and maintenance, capital expenditure levels and revenue
collection for the next ten years.
The Municipality’s priorities for 2005/06 included managing
and developing its infrastructure; developing the economy;
ensuring community safety; building and sustaining communities;
developing and enhancing natural resources; building
the institution and ensuring good governance; and enhancing
Tshwane’s image as the capital city.
A highlight for the period under review was the development
and implementation of a performance management system
in accordance with legislative requirements and good
business practices. The balanced scorecard model of
performance management that was adopted by the City
of Tshwane aimed to measure the performance of the
Municipality based on four perspectives: the customer,
internal processes, financial control, and learning and
growth. By means of this model, it was possible to manage
and monitor service delivery progress against the identified
strategic objectives and priorities, both at an organisational
and individual level.
14
The City of Tshwane Metropolitan Municipality – Annual Report 2005/06