CHDM adopts budget

DESPITE a deficit running into millions of rands, Chris Hani District Municipality (CHDM) council unanimously adopted its 2016-17 final budget totalling over R1-billion during an ordinary council meeting on Wednesday.

Presenting the budget, CHDM executive mayor Mxolisi Koyo said the total operating revenue had grown by 9% to R894-million for the coming financial year compared with the previous year’s second adjustment budget. Operating budget will increase by R38-million and R21-million respectively for the two outer years over the medium term revenue expenditure framework(MTREF).

However, the operating expenditure has been appropriated at R1.214-billion, translating to a budgeted operating deficit of R450-million.

“When compared to the 2015-16 adjustment budget, operating ex- penditure has decreased by 8% in the 2016-17 final budget and by 2% for 2017-18 and increased by 4% for 2018-19. These deficits indicate that the municipality has to increase its own revenue base from the water and sanitation services to cover the deficit,” Koyo said.

The deficit reflected in the operating budget was a non-cash deficit as non-cash items such as depreciation and asset impairment, provision for debt impairment and indigent subsidy amounted to R358 for the coming financial year’s final budget.

“The capital revenue of R505-million for 2016-17 is 36% less compared to the 2015-16 second adjustment budget. The decrease is due to the lesser allocations by national Treasury and the transferring departments and no allocations were pronounced by the provincial government for the current financial year in the Division of Revenue Bill. The capital programme increases to R650-million in the 2017-18 financial year and (down) to R601-million in 2018-19,” he said. The main source of capital funding for the municipality was state conditional grants.

He said in the 2016-17 financial year, revenue from water services charges totalled R176-million or 20% of total operating revenue. This was an increase to R187-million and R198-million in the respective two outer years of the MTREF. Koyo said it was the district authority’s intention to increase the tariffs by 7% but the mayoral committee, after discussions, decided to hold the increase for a number of reasons.

“We want the tariff study we commissioned in 2011 to be finalised. The study looks at what CHDM spends to provide water. We also felt we did not canvass our customers enough for the increase. We still have not concluded the data cleansing exercise and we still have to improve our credit control and collection. We therefore decided to absorb the related costs and not increase the tariffs.”

A number of projects have been funded from the municipal infrastructure grant for the eight local municipalities. Emalahleni will receive R9-million for the Mhlanga water supply, R521 000 for Mhlanga and Magwala bulk water supply and R15-million for Nkolonga and Sikhwanqeni water supply – with the total budget at R33.5-million.

Inkwanca will receive R13-million with R11-million for the Molteno sewer bulk and R2-million for the upgrade of the Molteno Oxidation ponds. R58-million will go to Intsika Yethu where R12-million will be used for the Cofimvaba ward three VIP toilets, R5-million each for sanitation in cluster six, seven and eight respectively. Ncora Zone A villages receive R12-million. In Inxuba Yethemba, the entire R13-million will be spent on the Cradock bulk services.

Lukhanji will receive R31.5-million with R6-million for cluster two sanitation, R6.7-million for cluster one sanitation and R9-million for cluster one water supply backlog for phase two. R5-million will be spent on the Hewu bulk water supply for phase six and R2-million for the Hewu bulk water phase seven. Engcobo will receive the lion’s share of the MIG funding at R73.9-million, Sakhisizwe R23.5-million and Tsolwana R12.9-million. The money is earmarked for Hofmeyr upgrade of bulk sewer services at R5-million and R6-million for cluster one sanitation. From the water services infrastructure grant Emalahleni will get R12.5-m, Intsika Yethu R25-million and Inxuba Yethemba R6-m. Engcobo will receive R49-million with Sakhisizwe getting R9.5-million.

From the regional infrastructure grant Lukhanji will receive R58-million for the Xonxa mechanical and electrical services for the water supply project. Intsika Yethu will get R73-million, Engcobo R63-million and Tsolwana R7-million while Inxuba Yethemba will be budgeted R6.3-million.

Commenting on the budget, ANC councillor and integrated planning and economic development political head Ray Shweni said the new administration after the August 3 elections would find the house in order. He said the decline in figures of the incoming revenue needed to be looked at. COPE councillor Mzwandile Bula said CHDM reports had always been accurate, adding CHDM had been underfunded.

“We need to have an audit of the wealth we possess as a district. This will help us in revenue collection as we will know what natural resources we have,” Bula said.

Engcobo mayor and representative to the CHDM council Lamla Jiyose said it could not have been easy putting the budget together in light of the declining economy around the world. He said it was important the budget be implemented as it was a reflection of the needs of the people.

Koyo said the period prior to the presentation of the budget was always worrying but that having it adopted was a victory.