White Paper on Local Government: Glossary

Section A: CURRENT REALITY

functional boundaries
Households in different neighbourhoods which rely on shared infrastructure are "functionally" linked. Functional boundaries take account of these linkages.

discontinuous land use
Discontinuous land-use is usually the result of apartheid planning, which created "buffer zones" or strips of undeveloped land between white and black areas. This pattern of land-use is inefficient (as it increases infrastructure and transport costs) and has negative or exclusionary social effects.

spatial integration
Spatial integration is a strategy for doing away with the expensive and exclusionary land-use patterns of apartheid. It seeks to enhance the efficiency of the city by placing residential development closer to job opportunities, and reduce the costs of development by exploiting surplus bulk infrastructural capacity. Spatial integration also has a social dimension and can increase the access of low-income residents to facilities and opportunities in the city.

linkages (between urban and rural settlements)
Urban areas are usually linked to surrounding rural areas in ways which create inter-dependencies between urban and rural well-being. For example, rural businesses may use the urban center as a place to market their goods and sell their produce; while businesses in urban centers may benefit from the consumer power of rural residents.

hinterlands
Hinterlands refer to the areas surrounding urban centres which are not part of the urban settlement, but are economically, socially or functionally linked to the urban centre.

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Section B: DEVELOPMENTAL LOCAL GOVERNMENT

sustainable
Sustainable activities utulise resources and build capacity in a way which ensures that the activity can be maintained over time.

basic household infrastructure
Essential municipal services such as water, sanitation, electricity, roads, stormwater drainage and street lighting needed to sustain a healthy and safe standard of living.

affirmative procurement policies
Affirmative procurement policies are policies concerning the purchase of goods and services in a way which affirms, or benefits, specific target groups. For example, a municipality may have a policy to give preference to emerging black businesses or small-scale companies which tender for contracts, thereby creating an opportunity for these firms to establish themselves.

integrated cities, towns and rural areas
The integration of our cities, towns and rural areas has a spatial dimension (see definition of "spatial integration"); an economic dimension (for example, ensuring that all residents who contribute to a local tax base enjoy the benefits derived from that tax base); and a social dimension (for example, encouraging mixed-income development). The aim of integration is to create more efficient and equitable cities, towns and rural areas, where the poor are not locationally disadvantaged or socially excluded.

cross-subsidisation
Cross-subidisation between services means using a surplus or profit generated by one service, to subsidise (or help pay for) the costs of delivering another service which generates less income.

"equitable share" of national revenue
In terms of Section 227(1) of the Constitution, local government is entitled to a share of the income which is raised by national government. The proportion of nationally-generated revenue which goes to local government must be equitable. In other words, nationally-generated income must be shared fairly between national, provincial and local government, based on the functions each has to fulfil, and the amount of revenue they are able to generate on their own.

leveraging private sector investment
Using government funds in ways which encourage private investors to lend or invest their money as part of the deal.

mixed-use and mixed-income development
Mixed-use development locates residential, commercial and industrial land-use in close proximity to one another. This makes the area more convenient for residents, who have near-by shopping, recreation and job opportunities.
Mixed-income development aims to eliminate the "ghetto-isation" of the poor by locating high-income and low-income residential areas closer to one another. This proximity means the benefits of investment in affluent neighbourhoods will be shared by adjacent areas, and local facilities and amenities can be utilised by both high and low-income residents.

environmental sustainability
Environmentally sustainable activities do not deplete environmental resources faster than they can be regenerated, or threaten the viability of ecological systems.

procurement procedures
The administrative steps that are followed in buying goods and services from outside suppliers. Usually this involves steps such as tendering, bid evaluation, contracting, etc.

securities
Earmarked funds or bank guarantees that companies have to set aside as insurance in case they do not perform according to contract.

labour intensity
Doing construction or building work in ways which use the maximum amount of labour and create more jobs. Labour intensity is a measure of the extent to which people, instead of machines, are utilised to perform tasks. Labour intensive ways of working can provide jobs and training opportunities to people. For example, only one machine operator would be hired to dig a trench using a bulldozer, but many people could be employed to dig a trench by manual labour. Although this increases staff costs, the costs of buying and maintaining machinery are reduced.

incremental plans
A step-by-step approach to planning, which builds on the basis of previous plans.

synergy (between line functions)
Mutual reinforcement, making the sum greater than the parts. Although line function departments deal with discreet services, these services impact on one another. For example, the supply of water and sanitation impacts on the health needs of a community; and the location of housing developments impacts on the transport needs of a community. Developing a synergy between line functions means understanding the impact that line functions have on one another, and ensuring that the policies and implementation programmes of individual line functions support and enhance the delivery of other services.

line functions
Line functions are service departments dealing with specific services, such as water, sanitation, transport and so forth.

human resource development
Human resource development is the process of enhancing the potential of people (as individuals and groups) to perform better in all spheres of life. People's potential can be developed through training and capacity-building, access to opportunities, and access to an environment which supports their development.

human development indices
Human development indices provide information about the well-being of groups of people. For example, the level of literacy or infant mortality in a community provides a measure of the well-being of that community.

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Section C: COOPERATIVE GOVERNMENT

organised local government
Structures representing municipalities, and hence representing local government as a sphere.

fiscal
Fiscal refers to issues of government finance, including the taxation, borrowing and expenditure functions of government.

an enabling framework
An enabling framework is a legal, regulatory or institutional framework which makes certain activities possible through removing obstacles to initiating those activities, or providing support for those activities. An enabling framework does not oblige anyone to perform specific actions or prescribe the details of how activities must be performed. Rather, an enabling framework creates a supportive space in which activities can be initiated.

spatial development initiatives
Coordinated programmes involving multiple departments and all three spheres of government focusing on particular areas of the country with high development potential.

disaster management
Disasters are events which disrupt the lives of people and cause large-scale social or economic damage, such as floods, oil spills or major fires. Disaster management refers to the process of managing disasters, including the development of systems to mitigate against and prevent disasters; responding to disasters when they occur; providing relief to communities affected by disasters; and assisting in the rehabilitation of communities affected by disasters.

Ntsika
A wholesale agency tasked with the responsibility of increasing access to non-financial support services for small, medium and micro enterprises through operational support and capacity-building of non-financial support providers.

Khula
A wholesale finance agency tasked with the responsibility of increasing access to finance for small, medium and micro-sized enterprises through credit guarantee schemes and the provision of loans, operating support and capacity-building for retail financial intermediaries.

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Section D: INSTITUTIONAL SYSTEMS

functional integration
Linkages and coordination between different services, sectors or departments which ensure that a broader vision, strategy and programmes are established.

spillovers and externalities
Spillovers and externalities are the effects that a policy or practice in one area has on adjacent areas.

polity
A polity is a political community or group of individuals who share political representation. For example, people within a municipal boundary constitute a polity, because they vote for the same Municipal Council and are represented by the same Municipal Council.

densification (in urban municipalities)
Many cities have low-income, over-crowded townships on the one hand, and far less densely populated affluent areas on the other. By densifying - that is, developing vacant land and allowing for stands to be sub-divided - the number of people living in more sparsely populated areas can be increased. This is a way of giving more people access to land which is already serviced (by transport networks and bulk infrastructure) and increasing the efficiency of the city.

scale economies (of service delivery)
The delivery of some services, particularly bulk functions, requires very expensive infrastructure and highly specialised capacity. Smaller areas may not generate enough demand to fully utilise this infrastructure and capacity, and may not be able to afford to pay for it. However, if the service is delivered at a larger scale (e.g., to a number of smaller areas), the delivery of the service becomes economically viable. This is called an economy of scale.

enumerator areas
The administrative districts used by Central Statistical Service for gathering household information for the census.

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Section E: POLITICAL SYSTEMS

executive powers
The authority assigned to municipalities to make policy and to implement national and provincial legislation as well as by-laws made by the municipal Council.

audit committee
A committee of the Council set up to supervise and review the process of auditing the finances of the municipality.

tender committee
A committee of the Council set up to ensure that proper tender procedures are followed when goods or services are purchased.

proportional representation
Proportional representation is an electoral system in which Council seats are allocated on a proportional basis from party lists. For example, if a party wins 60% of the votes, it receives 60% of the seats.

first-past-the-post ward candidature
First-past-the-post is an electoral system in which the winning candidate is the one who gets more votes than any other candidate, but not necessarily the majority of votes cast.

Wards
are geographic areas into which a municipality is divided for purposes of the election. Each ward returns one candidate, elected on a first-past-the-post basis, to the municipal council.

droop quota
The droop quota is a formula which is used to determine how seats in the proportional representation system are awarded. The quota is obtained by dividing the total vote by the number of seats plus one, then one is added to the product.

largest remainder method
This method is used after seats have been allocated in terms of the quota and one or more seats remain to be filled. The count then continues with the party having the highest remainder securing the next seat and so on.

quota
A quota is the threshold or minimum number of votes necessary to be eligible for winning a seat in a system of proportional representation.

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Section F: ADMINISTRATIVE SYSTEMS

allocation of risk
Dividing the risks associated with a project between the involved parties.

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Section G: MUNICIPAL FINANCE

Regional Services Council and Joint Services Board levies

Metropolitan Councils and District Councils obtain levies from:

Every employer who employs or who is deemed to employ employees within its region, and each person carrying on or deemed to be carrying on an enterprise within its region. This is a regional services levy (payroll tax).

Every person carrying on or deemed to be carrying on an enterprise within its region. This is a regional establishment levy (turnover tax).

rollover funds
Rollover funds are savings realised in one financial year which are made available for utilisation in the next financial year.

"equitable share" of national revenue
The "equitable share" of national revenue to municipalities covers operating transfers to municipalities to be utilised primarily for the provision of a basic level of services to the poor/indigent.

macroeconomic
Macroeconomic is the overall view of economic life, considering the total size, shape and functioning of economic experience, rather than the individual parts. The government has adopted a macroeconomic framework for growth, employment and redistribution.

revenue instruments
The means by which municipalities generate income through taxes and service charges.

tax base
The tax base is that part of the object of taxation on which the tax payable is calculated. The capital value or tax base of a property is determined by the valuation process.

tax rate
The tax rate is that percentage of the value of the tax base to be paid by the subject of taxation. In the case of property tax it usually refers to so many cents per R1 of the value of the tax base.

fiscal autonomy
Fiscal autonomy refers to the degree to which a sphere of government can take its own decisions and determine its own priorities with respect to taxation and municipal expenditure.

recurrent expenditure
The day-to-day expenses of a council - things such as salaries, postage, printing, stationery, repairs to offices, interest on loans, service provision (such as bulk buying of electricity for supplying to residents).

discretionary own revenue
The utilisation of own revenues without any intervention or prescripts from other spheres of government.

grants-in-aid
Grants-in-aid are a feature of the property tax structure for bringing relief to meritorious cases, i.e., pensioners and other indigent property owners, in order to neutralise the regressive effect of a proportional property tax rate.

cost recovery
Refers to the recovering of the costs of providing services from the relevant users of such services.

credit control
The collection and control over the money which is owed to a Council - for example, by ratepayers or consumers of municipal services.

average rental return on land ratio
The average rental return on land ratio is the cash rental value divided by the land value.

credit enhancement
There are a number of ways in which the ability of municipalities to attract loans at good rates can be improved, e.g., municipal bond insurance, debt syndication, bond banking, and the interception of intergovernmental transfers.

concessional loan finance
This is "development finance" or concessional loans to municipalities made via parastatal development finance institutions, such as the Development Bank of Southern Africa.

municipal bond insurance
Insurance by investors to protect them against risks in the market place.

treasury trusts
Treasury trust funds may be established for the purpose of investing in non-marketable debt of provincial governments and municipalities.

interception of intergovernmental transfers
The transfer of intergovernmental transfers due to municipalities to third parties as collateral.

debt syndication
The formation of a consortium of investors in order to finance loans and mitigate against risk.

bond banking
Financial transactions involving trade in bonds to investors, banks, etc. in order to create a market in such stock.

fixed assets
A fixed asset is a resource with future economic benefits which will flow to the municipality and a cost or value that can be measured reliably.

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