Draft bud­get raises ques­tions

Talk of the Town - - Opinion - CHRIS BEZUIDEN­HOUT, chair­per­son: Nd­lambe Ratepay­ers Fo­rum

THE ad­vert in TotT dated Thursday April 5, call­ing for pub­lic com­ments on the draft In­te­grated De­vel­op­ment Plan (IDP) and tabled bud­get, refers.

The Nd­lambe Ratepay­ers Fo­rum (NRF) stud­ied the draft bud­get and it raises a num­ber of is­sues:

ý In the ex­ec­u­tive sum­mary, op­er­at­ing ex­pen­di­ture is given as R420-mil­lion, but ac­cord­ing to An­nex­ure 2 op­er­at­ing ex­pen­di­ture is given as R432-mil­lion and rev­enue R318-mil­lion, giv­ing a deficit of R124-mil­lion. This bud­get deficit is against the Nd­lambe Bud­get Pol­icy.

ý Pro­posed rev­enue in­creases: Water R38 281 471 19.87% Elec­tric­ity R66376 619 25.78%

San­i­ta­tion R11383 097 65.50%

Refuse R16846 711 35.85%.

Where are all th­ese mas­sive in­creases in rev­enue sud­denly go­ing to come from when the pro­posed water tar­iff in­crease is 5%, elec­tric­ity 6.84%, san­i­ta­tion 5.5% and refuse 5.5%? Surely, there should be a cor­re­la­tion be­tween in­creases in rates in­come (8.4%) and the in­come from above ser­vices?

ý Ac­cord­ing to Na­tional Trea­sury Mu­nic­i­pal Bud­get Cir­cu­lar for 2018-19, the CPI fore­cast is be­tween 3% and 6% and mu­nic­i­pal­i­ties are re­quired to jus­tify all rev­enue in­creases in ex­cess of the pro­jected in­fla­tion tar­get for 2018-19 in their bud­get. The res­i­den­tial rates re­bate has been re­duced from the present 14% to 12%. Ef­fec­tively the rates in­crease will be 8.4% and not 6.4%, which is above the tar­get set and needs to be jus­ti­fied.

ý How does the mu­nic­i­pal­ity plan to ad­dress the R124-mil­lion short­fall from the pro­posed bud­get? This can only be done by re­duc­ing the op­er­at­ing bud­get and/or from a mas­sive in­crease in rates. Over the last num­ber of years the ratepay­ers were con­fronted with draft bud­gets which are to­tally un­re­al­is­tic and then are ex­pected to make in­formed con­struc­tive com­ments – know­ing full well that this is a draft bud­get which will be re-worked to bal­ance in­come and ex­pen­di­ture. Why not ta­ble a draft bud­get, which is re­al­is­tic and then ask for pub­lic com­ment? To com­ment any fur­ther on this draft bud­get is fu­tile but the NRF will, as in the past, en­gage with the mu­nic­i­pal­ity once the draft bud­get has been re-worked.

A fur­ther re­minder, ac­cord­ing to Nd­lambe’s Bud­get Pol­icy, coun­cil shall en­deav­our to keep the labour com­po­nent cost as a per­cent­age of op­er­a­tional ex­pen­di­ture be­low 35% (cur­rently >45%) and that a zero- based bud­get shall be pre­pared on a need-based anal­y­sis in the prepa­ra­tion of the Op­er­at­ing Bud­get.

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