/ 27 April 2022

Two city managers, one municipality: Why reforms are urgent

Put to bed: Men move their possessions back after evictions last Friday at the Barcelona 2 transit camp in Lamontville. Abahlali baseMjondolo was able to halt the ‘unlawful’ evictions.
The deadlock at the Nelson Mandela Bay metro municipality, with damaging consequences for municipal performance, reaffirms the urgency for the government to act on its own proposal.

“Utterly bizarre” is how a judge of the high court at Gqeberha, described a case brought to him by the Nelson Mandela Bay metro municipality. Judge Glenn Goosen, who heard the case on 3 March this year, was told that the municipality had two city managers. Each was appointed at a different council meeting, by feuding groupings of city councillors — and both claimed to be legitimate. 

The case was brought by one city manager, Noxolo Nqwazi, against the other claimant to the position, Anele Qaba. She wanted the judge to nullify Qaba’s appointment. Mayor Eugene Johnson and her party, the ANC, backed Nqwazi in the standoff; most other parties, including the ANC’s own coalition partners, supported Qaba. 

Since they are all — that is, council, mayor and city manager — part of the same municipality, the entity was essentially suing itself. It was both a litigant and a defendant and Goosen was asked to rule both in favour and against the municipality, simultaneously. Thus Goosen’s utter incredulity.

A history of collusion 

The peculiarity of the situation, however, is also revealing of collusion between politicians and city managers towards securing the largesse of the municipality. Ironically, the absurdity of the Nelson Mandela Bay case also underscores the urgency of reforming the process of appointing city managers, something that was first mooted more than 10 years ago. 

The scenario of a council tearing itself apart over battles for access to patronage has played itself out multiple times in different guises over the past 27 years. It was initially occasioned by the delay in introducing legislative reforms. After the end of apartheid, councillors elected to the newly democratic councils, were allowed to do business with their municipalities. Some formed companies and others did consultancy stints. They even sat on bid committees deciding who should get tenders. Some of the recipients of those tenders were their own companies. 

From the onset, therefore, councillors had vested financial interests in the contracts issued by municipalities. The second term of local government, beginning in 2000, saw a change. A slew of legislation to reconfigure local government in a way that would enable the democratic ethos of checks and balances was now ready for implementation. 

Both the Municipal Systems Act and Municipal Financial Management Act were particularly emphatic on the delineation of roles between councillors and administrators: the former passed policies and approved programmes; the latter steered implementation. Part of ensuring successful implementation required both that administrators choose competent service providers and that councillors exercise oversight. 

Although it promised efficiency in how municipalities functioned, the new legislative regime threatened the financial interests of councillors. But councillors were not willing to forgo access to patronage. It is in that determination — to feed off the resources of the state — that the origins of the current impasse at the Nelson Mandela Bay municipality lay. 

The appointment of city managers

Councillors then turned their machinations to the appointment of city managers, manipulating procedures that were introduced with good intentions.  The onset of the new local government came with a reassignment of the appointment of city managers away from an outside body, the Public Service Commission (PSC), to the newly formed councils and the councillors themselves. 

The change was occasioned by a concern that the PSC applied appointment criteria that was likely to exclude progressive candidates.  The criteria included experience in administration and affiliation with professional bodies. Hardly any progressive candidates had experience in executive municipal management and, as a result, none of them were  affiliated to the Institute of Town Clerks, for example.

 Among the criteria that the new government prioritised, in addition to technical expertise, was acceptance of the country’s new foundational values and demonstrable commitment to transformation. To secure such individuals, the government thought it prudent to have politicians assume charge of the appointment process. 

Since 1995, therefore, the appointment of a city manager has been an internal, mayoral-driven process. The mayor chairs the panel, comprising three to five members. For a panel of three members, two panellists should be councillors, that is, the mayor and another councillor; the third should be an outsider who is familiar with the requirements of the job. Regulations are not specific on the formula (internal vs external panellists) in a panel of five members. But, it is highly possible that it follows the same formula, with the majority being internal members. 

In addition to selecting internal members and assuming the role of chairperson, the mayor shortlists and screens applicants, in consultation with the other panellists. On completion of the interviews, the panel recommends three names for appointment. The actual selection of the successful candidate is done by the council, through voting. 

Council, in other words, is the employer with the typical rights to suspend, fire and re-employ on expiry of the contract. The fate of the city manager, therefore, rests on the council and mayor. This places pressure, and rightfully so, on a city manager to be responsive to their decisions and resolutions. The problem is that some of their demands are not consistent with municipal procedures, nor do they advance the collective interests of the municipality. 

Consequently, feuds ensued among councillors, including party officials, over the choice of city managers. Councillors insisted on appointing city managers who would be responsive to their inappropriate instructions to rig the bidding process in favour of their proxy companies or business associates. 

The scramble over city managers led to instability. Some were pliant and others not. Those who resisted improper instructions were fired and the compliant ones were kept in their posts, even in an acting capacity of an irregular period lasting as long as two years, far beyond the legally prescribed duration of three months. 

Nelson Mandela Bay background

Graham Richards, who was appointed city manager of the Nelson Mandela Bay metro municipality for the second time in 2006 (after his initial stint from 1995 to 2002), never finished his term. The cause was him resisting approaches from the regional headquarters of the ANC, Florence Matomela House, even though he had the backing of the then mayor, Nondumiso Maphazi. 

The mayor insisted on sticking to the prescripts of legislation. Matomela House applied pressure on Maphazi to fire Richards, claiming that he was corrupt. Maphazi refused and even instituted an investigation confident that it would prove that Richards was untainted. The findings of the investigation — that is, the Kabuso Report — would eventually confirm Richards’s innocence and, ironically, pointed at his accusers as the corrupt lot. In the meantime, some of Maphazi’s colleagues in council went along with instructions from the regional office and voted to suspend Richards. He was eventually paid out, ensuring that he never returned. 

With the rule-bound Richards out of the way, party officials, together with their allies in council, got a pliant (acting) city manager in Elias Ntoba. And, many more appointees would follow in an acting capacity. When the Nelson Mandela Bay council eventually succumbed to the pressure in 2011 to comply with the law by appointing a permanent city manager, the appointment process was botched by disagreement among councillors and their party bosses. 

Regional party leaders, who had already been accused of corruption in the Kabuso Report, together with their allies in council, insisted on one particular candidate, Sithembele Vatala. Maphazi’s successor, mayor Zanoxolo Wayile, was just like Maphazi in his firmness on an independent city manager. Maphazi was forced to resign partly because of her doggedness regarding proper conduct on the part of her city managers. 

Maphazi’s fate did not deter Wayile from expecting similar conduct from city managers. He disapproved of Vatala because of his close links to politicians. Earlier, Wayile had to fend off instructions from Matomela House to appoint Vatala as head of procurement. That was a clear indication for Wayile that, if appointed city manager, Vatala would do the bidding of the faction that backed him. 

The interview panel, however, had scored Vatala more than the other candidates. Wayile ignored the scoring and appointed someone else instead. Some of the councillors, who had served on the panel and were Vatala’s allies, tipped him off that he scored highest and should have been appointed. Vatala went to court and the result was that the appointment process had to be reconducted.

The ideal candidate

Eventually, in March 2013, Wayile managed to get his ideal, independent city manager. This was Lindiwe Msengana-Ndlela, who had been head-hunted for the post owing to her impressive credentials. A holder of a doctoral degree in development studies, Msengana-Ndlela had reached the pinnacle of bureaucracy, rising to become a director general of a national department, during which she earned the reputation as an upright and diligent administrator. This was the reason Wayile had encouraged her to apply and she did not disappoint. 

Finding the Nelson Mandela Bay metro municipality in the midst of a scandal over a contract about introducing new buses for public transportation, that is, the Integrated Public Transportation System. Msengana-Ndlela quickly moved to put an end to it. She objected to the purchase of a ticketing system for the new buses, because the buses came with a built-in ticketing system. The acquisition would be wasteful expenditure, used as an excuse to release money from the coffers of the municipality for the benefit of unscrupulous politicians and their business associates. 

Unfortunately for Msengana-Ndlela, her initial backer, Wayile, was removed as mayor soon after facilitating her employment. The new mayor, Ben Fihla, was the opposite of Wayile and Maphazi. In addition to warning her against cancelling the aforementioned contract, Fihla instructed Msengana-Ndlela to employ ANC members as bodyguards without following due process or budgetary allocations. 

When she resisted, Fihla threatened that she might be physically attacked and, to guarantee her own safety, she had to go along with the instruction. Msengana-Ndlela refused to succumb to the threats and resigned within six months of her employment. The unrelenting political pressure to approve improper contracts and commit financial irregularity forced her to resign. 

A forensic investigation by the national treasury would later reveal that, after Msengana-Ndlela’s forced departure, about R600-million related to the Integrated Public Transportation System project was either paid out fraudulently or syphoned.

 Among those who were subsequently arrested, and currently face legal charges is the former deputy to Fihla, Chippa Ngcolomba, who was the political head of the transport project; an official directly in charge, Mhleli Tshamase; the former regional secretary of the ANC, Zandisile Qupe; and Fareed Fakir, a businessman who passed on kickbacks to the ANC, in return for their intervention in securing the contracts. Msengana-Ndlela’s successor appears to have given Tshamase carte blanche or simply turned a blind eye to his shenanigans. 

It would take about three years for the Nelson Mandela Bay metro municipality to make another permanent appointment to the city manager post, Johann Mettler. He too would subsequently be hounded out of the job before completing his term. Like 

Msengana-Ndlela, Mettler resisted political meddling to influence allocation of contracts, and instructions to cover up corruption. 

The Nelson Mandela Bay metro municipality, therefore, has a long and entrenched culture among the political elite of employing city managers who serve as their proxies, advancing their financial interests through irregular contracts. City managers, in turn, enjoy their protection, are retained in those lucrative jobs and possibly receive kickbacks. 

SIU court battle

Johnson’s protection of Nqwazi began, and has its roots, in the findings of the Special Investigating Unit (SIU). In August 2020, the SIU received information from a whistleblower alleging possible impropriety in the awarding of a contract, worth just more than R24-million, to a company called HT Pelatona Projects. The company was hired to construct 2 000 toilets in the various informal settlements throughout the metro. In appointing Pelatona, according to the whistleblower, the acting city manager, who was then Nqwazi, deliberately circumvented the process to ensure that Pelatona was awarded the contract. She effectively colluded with the company. 

The SIU’s investigation confirmed the allegation. It found that “the service provider was appointed even before the award letter” was issued; the emergency conditions that Nqwazi used as justification to infringe the process were non-existent; and, at the time of appointment, Pelatona had built fewer than 200 toilets. Overall, there “was no fairness and competitiveness in the procurement process”. 

As a result, the SIU intended to approach the Special Tribunal to declare the contract invalid, freeze any further payments to Pelatona and recover the funds already paid to the company. On receiving the findings, the municipality stopped payments to Pelatona, even before the SIU could secure an order from the Special Tribunal. The new mayor from the Democratic Alliance, Nqaba Bhanga (whose tenure spanned December 2020 to November 2021), suspected possible corruption and did not need much persuasion to freeze payments, even though there was no legal order to that effect. 

The freeze on payments prompted Pelatona to approach the court, seeking an order that it be paid. The company contended that the municipality could not withhold payments purely on account of the SIU findings. The findings, Pelatona explained, are not a verdict of guilt on its part. Only the Special Tribunal, on being approached by the SIU for a ruling and if convinced by the evidence, could issue such an order. 

The SIU opposed Pelatona in court, insisting that the municipality was correct in freezing further payments. Judge Sunil Rugunanan agreed with Pelatona. Rugunanan emphasised that the SIU’s role was to investigate and present findings, not to make pronouncements on guilt or even issue punitive measures. The judge added that the SIU had no business approaching his court, or any other civil court, for validation of its findings. The only court it can, and should have approached, is the Special Tribunal. Until such time that the Special Tribunal makes an adverse ruling against Pelatona, the judge ruled, the municipality should pay. 

It is worth emphasising that the ruling related strictly to the role and powers of the SIU. The investigative body had overstepped its powers. On considering the judgement, Johnson, however, sought to stretch the implications of the ruling to impugn the merit of the findings. She proposed to council that the municipality launch a court application to nullify the SIU findings. 

The application, added the mayor, should not just focus on the Pelatona contracts, but all other investigative reports the SIU has compiled on Covid-19 contracts. The motion suggested that Johnson was not concerned with the irregularity the SIU unearthed, nor keen to impose punitive measures on the guilty parties. Rather, she sought to kill the reports. It’s worth remembering that Nqwazi had issued most, if not all, of the irregular contracts. The motion passed with 57 votes. The ANC had managed to get support from its coalition partners, with the exception of the United Democratic Movement (UDM). 

Desperate measures 

The UDM argued against taking the SIU reports on legal review. Instead, the party urged that the process be allowed to proceed to the Special Tribunal, where the veracity of the evidence in the SIU reports would be tested. There was no need, the UDM stressed, to initiate a legal challenge to test the SIU evidence when the Special Tribunal was scheduled to do that anyway. 

What the mayor sought to do was not in the interest of the municipality, but signalled an inclination to quash the SIU reports and protect Nqwazi. Other parties were eventually persuaded by the UDM. That is why they would not agree, in the deliberations within the coalition, to supporting Nqwazi’s appointment as city manager. 

Nqwazi and the ANC share a common interest. And their machinations suggest that common interest exceeds professional boundaries. Nqwazi employed irregular means in an unsuccessful attempt to remove Gary van Niekerk, the speaker of council, for nullifying her appointment on account that the council meeting that appointed her was inquorate.

Johnson ignored a court judgment in her intent to have Nqwazi installed as the city manager. Her desperation suggests fear of what might follow should Nqwazi not be appointed and face disciplinary measures. The fear is possibly that Nqwazi may implicate the ANC if she is put through a disciplinary process. Having Nqwazi as the city manager, and not  facing punitive measures, possibly protects the ANC as well. It also offers some space to manoeuvre either to quash the SIU reports or limit the fall-out arising therefrom.

A possible solution

A remedy that possibly offers a durable solution to the administrative instability lies in changing the selection process of city managers and their lines of accountability. It goes without saying that councillors’ penchant for patronage is the primary cause of their conduct. The selection process, together with a pliant city manager, is simply an enabler.

It is doubtful, though, if councillors will cease manipulating their appointment of city managers, and abusing their attendant powers to fire and re-appointment, towards their own unscrupulous ends. The longevity of this problem at the Nelson Mandela Bay metro municipality suggests intense resistance to any change. If the behaviour of individual councillors cannot change of its own volition, what remains is to reconfigure the institution in a way that hinders their crooked pursuits. 

The inaugural National Planning Commission (NPC) made a similar diagnosis more than 10 years ago. Chapter 13, titled “Building a Capable State, the National Development Plan (NDP)”, notes: “At senior levels, reporting and recruitment structures allow for too much political interference in selecting and managing senior staff. The result has been unnecessary turbulence in senior posts in the public service and reduced confidence in the state.

“Political meddling produced public servants that were indebted to politicians, doing their bidding instead of functioning professionally in pursuit of their mandate. To ensure professionalism, the NDP then proposed that civil servants be shielded from politicians. 

That insulation should begin at the recruitment and appointment stages. To this end, the NDP proposed a hybrid model that incorporates both an independent institution and the executive. The outside institution would be the Public Service Commission, which would screen, shortlist, interview and recommend candidates for appointment. 

“The NDP further proposes the creation of ‘an administrative head of the public service with responsibility for managing the career progression of heads of department, including convening panels for recruitment, performance assessments and disciplinary procedures’. 

“While it says that, in the provinces, this role would be played by the [director general] in the office of the premier, the NDP is silent on equivalent processes at local government level. It, however, calls for the development of ‘systems to strengthen local government, including recruitment systems, operational guidelines for routine tasks, staffing frameworks for municipal functions, standard assessment procedures for recruiting new staff and guidelines on salary levels’.”

A hybrid proposal

The proposal, therefore, is that the hybrid model, which takes the appointment process out of the hands of politicians, should be applied at local government level — at least in the metropolitan and district municipalities. The politicians would simply make their pick from a list of recommended candidates, chosen outside their influence. Their renewal of contract would similarly be determined independently, free from political influence, or involvement. 

The NDP proposal to return appointments back to an independent process, however, has evidently not been implemented. It has now been more than 10 years since the proposal was first made. The effect of political meddling has not only contributed to the deteriorating state of municipalities, but councillors have also become even more daring in their meddling. 

The deadlock at the Nelson Mandela Bay metro municipality, with damaging consequences for municipal performance, reaffirms the urgency for the government to act on its own proposal. 

The National School of Government recently initiated deliberations to consolidate the NDP proposals into new regulations. This augurs well for reforms, and the regulations should also deal with how this would manifest at the local government level.

 It is critical to lay down the principle and how it should be operationalised: taking the appointment process and management of performance evaluation out of council and the mayoral office to an independent and administrative body or individual. 

This would ensure that both the appointment and evaluation are based strictly on merit and technical indicators. The result would be the independence of city managers to operate professionally, without the pressure to accede to councillors’ unscrupulous demands. 

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.

 This is an edited version of an article published by the Mapungubwe Institute for Strategic Reflection