Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000)NoticesUpper Limits of Total Remuneration Packages Payable to Municipal Managers and Managers Directly Accountable to Municipal Managers6. Change of categorisation of municipality |
| (1) | If the categorisation of a municipality determined in terms of this Notice, is higher than the categorisation for the previous financial year, the municipal council must apply in writing to the Minister to obtain approval, after consultation with the MEC for local government in the province. |
| (2) | Notwithstanding sub-item (1), the Minister must— |
| (a) | confirm the actual values and points scored by the municipality in relation to the factors in items 2, 3 and 4 of the Notice; and |
| (b) | determine the— |
| (i) | sustainability of the driving factors that led to the higher categorisation of the municipality compared to the categorisation of the previous financial year; |
| (ii) | affordability of the higher categorisation of the municipality using the following ratios: |
| (aa) | municipality's liquidity ratio; |
| (bb) | creditor's payment period; |
| (cc) | debtor's collection rate; |
| (dd) | remuneration ratio; and |
| (iii) | any other risks as may be identified. |
| (3) | After confirmation of the actual values and points scored by the municipality in relation to the total municipal income, population and total municipal equitable share, including the driving factors that led to a higher categorisation as well as affordability (using the ratios: liquidity ratio, creditor's payment period, debtor's collection rate and remuneration ratio) and approval by the Minister, the municipal council may implement such a new categorisation including adjustment of the total remuneration package of senior manager to the higher category. |
| (4) | If the categorisation of a municipality determined in terms of this Notice is lower than the categorisation of the previous financial year, the municipality must retain the categorisation of the previous financial year. |