De Lille unveils City’s budget for the people
Mayor thanks residents for robust interest in participation phase
IWOULD like to start by thanking our residents for taking the time to provide their comments on the proposed budget during the public participation phase. During the public participation, from March 28 to May 4, we received a record number of more than 50 400 comments from the public.
This was a mammoth increase from last year’s budget where we received about 1 700 comments and much lower numbers in previous years.
This sharp spike in comments shows that our residents are speaking and we must listen.
This must serve as a firm reminder to all of us as public servants to always keep the best interests of our residents at the forefront of our minds.
Overall, the budget for the 2018/19 year before us today amounts to R47.7 billion, of which R8.4bn has been set aside for the capital budget and the remainder for operating spend.
I am thrilled that the City managed to resolve one of the biggest contentions in the budget with the proposed 26.9% and 55.1% water tariff increases.
Shortly after tabling the draft budget, I wrote to the city manager, executive directors and mayco members to request that we investigate how these tariffs could be reduced.
The City committed to listening to residents and to being a responsive administration and today I am pleased to say that we have reduced two key water tariffs, from 26.9% to 19.9% and from 55.1% to 10.1%.
These changes show that we have listened to the public’s comments. The proposed water tariffs were reduced following public input, review and discussions.
Since the tabling of the City’s draft budget for 2018/19 in March, a reassessment of the budget proposals for the water and sanitation department took place.
This reassessment also led to a reduction in level 6 water tariffs for those residents using the least amount of water, below 6 000 litres per month.
These residents no longer face the 55.1% proposed increase but rather an increase of 10.1%.
Households using less than 6 000 litres per month will therefore pay R28.90 per kilolitre instead of R40.73 a kilolitre, as initially proposed.
This was achieved primarily by reviewing and rephrasing the New Water Plan, including the savings in the current financial year.
The New Water Plan’s spend for the current (2017/18) financial year has been reduced by R1.1bn.
For the coming 2018/19 financial year, the New Water Plan’s budget has been reduced from R2.4bn to R1.5bn.
The amended New Water Plan is now proposed to comprise R14.1bn over the next five years, instead of the originally proposed R19bn.
The City’s finance teams have gone through the budget carefully to see how we could move funds, cut costs and adjust our loan book and capital replacement reserves.
For instance, we have reviewed our loan amounts which will reduce the external interest costs in the tabled budget by just over R300 million per annum over the next three years.
No changes have been made to the proposed fixed delivery charge for water which is based on the property’s metre-size.
This remains necessary to counter the variations in water usage and to bring more stability to the water and sanitation revenue.
This is because the costs to operate the water distribution system remain the same regardless of the volume of water used.
In terms of the other tariffs, the property rates tariff has also been reduced from 7.2% to 6.5%.
This will result in a reduction of R65m on property rates revenue.
The electricity tariff increase remains at 8.1%.
The sanitation tariff has also been reduced, from 26.9% to 19.9%.
The refuse collection tariff increase also remains unchanged at 5.7%.
Some of the major capital spend planned for the 2018/19 financial year is as follows:
R4.1bn for informal settlements, water and waste services.
R1.8bn for transport and urban development.
R1.1bn for energy. The following are some of the most significant projects on the budget:
R253m for dark fibre broadband infrastructure. R95m for electrification. R53m for street lighting. R114m for the Bellville Waste Water Treatment Works.
R75m for the Cape Flats Waste Water Treatment Works.
R109m for the upgrading of solid waste facilities. R9m for CCTV installations. R21m for cemetery developments. R9m for the construction of the Du Noon Library. R10m for the Manenberg Integrated Project. R14m for the new Fisantekraal clinic. R20m for the new Pelican Park clinic. R240m for congestion relief projects. R287m for Integrated Rapid Transit projects.
R155m for land acquisition. I am proud to present yet another pro-poor budget which shows our commitment to being a caring city by assisting those who need help most.
Our social package is nearly R3bn allocated to assist the poorest and the most vulnerable in our city.
The social package financial relief is in line with our commitment to build a caring city and our Organisational Development and Transformation Plan’s objective to be a more customer-centric and responsive administration.
Many of our residents, especially pensioners, commented during the public participation phase about how they are struggling to make ends meet.
Our social package helps these vulnerable residents with rebates and free basic services such as electricity, refuse removal, water and sanitation to residents who qualify.
Where properties are valued at R100 000 and below, these households qualify for 100% rates and refuse removal rebates. These residents also receive 10 500 litres of free water and 7 350 litres of free sanitation.
In properties valued above R100 000 and below R150 000, these residents get a 100% rates rebate, 75% off refuse removal charges and 10 500 litres of free water and 7 350 litres of free sanitation.
Properties valued between R150 000 and R400 000 all receive 10 500 litres of free water and 7 350 litres of free sanitation and between 50% and 25% off their refuse removal charges.
There is also relief with electricity charges for consumers on the lifeline tariff.
Where consumption is on average 250 units per month, these residents will receive 60 units free per month.
Where consumption is between 250 and 450 units, these households will receive 25 units free each month.
The City also uses household income as a factor to determine which residents qualify for assistance.
This is an edited version of mayor Patricia de Lille’s speech at the adoption of the City of Cape Town’s budget 2018/19