1. A municipality may, in accordance with the policy framework referred to in section 86, establish a part of the municipality as an internal municipal service district to facilitate the provision of a municipal service in that part of the municipality.
2. Before establishing an internal municipal service district, the municipality must-
   
   1. consult the local community on the following matters;
      
      1. The proposed boundaries of the service district;
      2. the proposed nature of the municipal service that is to be provided;
      3. the proposed method of financing the municipal service; and
      4. the proposed mechanism for the provision of the municipal service; and
   2. obtain the consent of the majority of the members of the local community in the proposed service district that will be required to contribute to the provision of the municipal service.
3. When a municipality establishes an internal municipal service district, the municipality-
   
   1. must determine the boundaries of the district;
   2. must determine the mechanism that will provide the service in the district;
   3. in order to finance the service in the district, may-
      
      1. set a tariff or levy for the service in the district;
      2. impose a special surcharge in the district on the tariff for the service; or
      3. increase the tariff in the district for that service;
   4. must establish separate accounting and other record-keeping systems with respect to the provision of the service in the district; and
   5. may establish a committee composed of persons representing the community in the district to act as a consultative and advisory forum for the municipality regarding the management of and other matters relating to the service in the district, provided that gender representivity is taken into account when such a committee is established.

1. A municipality must develop and adopt a policy framework for the establishment, regulation and management of an internal municipal service district.
2. Such a policy framework must reflect at least the following:
   
   1. The development needs and priorities of designated parts of the municipality that must be balanced against that of the municipality as a whole;
   2. the extent to which the establishment of one or more internal municipal service districts-
      
      1. will promote the total economic development of the municipality as a whole;
      2. will contribute to enhancing the social, economic and spatial integration of the municipality; and
      3. may not entrench or contribute to further disparities in service provision.

Two or more municipalities, by written agreement, may establish their respective municipal areas or designated parts of their respective municipal areas as a multi-jurisdictional municipal service district to facilitate the provision of a municipal service in those municipal areas or those designated parts.

1. The Minister may, in the national interest and in consultation with the national Minister responsible for the functional area in question, request two or more municipalities to establish designated multi-jurisdictional municipal service districts to conform to the requirements of national legislation applicable to the provision of a specific municipal service.
2. The municipalities that receive a request in terms of subsection (1), must within two months of receiving such request decide whether to accede to the request, and convey their decision to the Minister.

1. An agreement establishing a multi-jurisdictional municipal service district must describe the rights, obligations and responsibilities of the participating municipalities and must-
   
   1. determine the boundaries of the district;
   2. identify the municipal service to be provided in terms of the agreement;
   3. determine the mechanism that will provide the service in the district;
   4. determine budgetary, funding and scheduling arrangements for implementation of the agreement;
   5. provide for-
      
      1. the establishment of a governing body for the multi-jurisdictional municipal service district;
      2. the appointment of representatives of the participating municipalities to the governing body, the filling of vacancies and the replacement and recall of representatives;
      3. the number of representatives appointed for each participating municipality, subject to subsection (2);
      4. the terms and conditions of appointment of those representatives;
      5. the appointment of a chairperson;
      6. the operating procedures of the governing body;
      7. the delegation of powers and duties to the governing body consistent with section 92; and
      8. any other matter relating to the proper functioning of the governing body;
   6. provide for-
      
      1. the acquisition of infrastructure, goods. services, supplies or equipment by the governing body, or the transfer of infrastructure. goods, services, supplies or equipment to the governing body;
      2. the appointment of staff by the governing body, or the transfer or secondment of staff to the governing body in accordance with applicable labour legislation;
      3. the terms and conditions on which any acquisition. transfer. appointment or secondment is made; and
   7. determine the conditions for, and consequences of, the withdrawal from the agreement of a participating municipality:
   8. determine the conditions for, and consequences of, the termination of the agreement, including-
      
      1. the method and schedule for winding-up the operations of the district;
      2. the distribution of the proceeds; and
      3. the allocation among the participating municipalities of any assets and liabilities.
2. A governing body must consist of between three and fifteen representatives.

The governing body of a multi-jurisdictional municipal service district is a juristic person.

1. The governing body of a multi-jurisdictional municipal service district, in relation to the provision of the municipal service for which the district is established-
   
   1. may in terms of the delegation in the agreement establishing the governing body exercise any of the powers, a municipality may exercise for the proper provision of a service of the kind in question, subject to section 160(2) of the Constitution and any limitations. qualifications and directives set out in the agreement; and
   2. must in terms of the delegation perform all the duties a municipality must perform in terms of this Act or any other applicable legislation when providing a service of the kind in question. subject to any limitations, qualifications and directives set out in the agreement.
2. In addition a governing body has the following powers, subject to any limitations, qualifications and directives set out in the agreement establishing the governing body:
   
   1. To determine its own staff establishment and appoint persons to posts on its staff establishment;
   2. to obtain the services of any person or entity to perform any specific act or function;
   3. to open a bank account;
   4. to acquire or dispose of any right in or to property;
   5. to insure itself against any loss, damage, risk or liability;
   6. to perform legal acts, or institute or defend any legal action in its own name;
   7. to do anything that is incidental to the exercise of any of its powers or duties; and
   8. to set, review and adjust tariffs within the policy framework approved by the participating municipalities.

1. The governing body of a multi-jurisdictional municipal service district-
   
   1. is accountable to the participating municipalities; and
   2. must comply with any legislation applicable to the financial management of municipalities and municipal entities.
2. A participating municipality-
   
   1. is entitled to receive such regular written reports from the governing body of a district with respect to its activities and performance, as may be set out in the agreement establishing the governing body;
   2. may request the governing body to furnish it with such information regarding its activities as the participation municipality may reasonably require; and
   3. may appoint a nominee to inspect. at any time during normal business hours, the books, records, operations and facilities of the governing body, and of those of its contractors relating to the provision of the municipality service for which the district is established.

A multi-jurisdictional municipal service district terminates-

1. automatically, when there is only one remaining participating municipality;
2. by written agreement among all of the participating municipalities; or
3. upon the termination date or the fulfillment of any condition for termination contained in the agreement establishing the district.