CHDM gives draft budget the nod
R434m total deficit a ‘serious strain’
A DRAFT budget for the 2017/2018 financial year was adopted by the Chris Hani District Municipal council last Wednesday during an ordinary council meeting and shows a total operating expenditure of more than R1-billion and a multimillion-rand capital expenditure with an evident deficit.
The district authority approved an operating expenditure of R1.271-billion against revenue of R933-million while also approving capital expenditure to the tune of R611-million as opposed to R514-million revenue.
The budget was presented by executive mayor Kholiswa Vimbayo with additions made by chief financial officer Nomfundo Fetsha.
Council approved a water tariff increase of 6%.
The municipality experienced a 10% decrease in capital revenue and 11.6% decrease in capital expenditure compared with the second adjustment budget.
The 10% decrease was influenced by a 23% decrease in the water services infrastructure grant and a 54% decrease in the grant from the cooperative governance and traditional affairs department.
The municipal infrastructure grant (MIG) funding and rural bulk infrastructure grant (RBIG) increased by 24% and 1% respectively.
“The capital programmes funded from capital grants were budgeted to the extent of funds allocated by national departments and R97-million from the municipal reserves. The total municipal deficit amounts to R434-million,” Vimbayo said.
The budget deficit had decreased by 14%. Employee-related costs and councillors’ allowances increased by 7%.
Water bulk purchases increased by 8% and contracted services decreased by 48%.
“The expenditure to the agency function of roads carried on behalf of the department of roads and public works is budgeted for under the operating expenditure in line with the operating revenue,” she said.
Equitable share programmes experienced a 25% decrease when compared with the adjusted budget. The decrease, Vimbayo said, was influenced by the deficit the municipality faced and therefore justified the need to cut on some expenditure items and unfunded mandates.
The Extended Public Works Programme (EPWP) operating revenue increased by R2.2-million to R10-million. RBIG funded projects included R26-million for the Xonxa Dam project.
Cluster one and two sanitation projects will receive a cash injection of R5-million and R6-million respectively.
The Hewu Bulk Water Supply Phase 7 will receive R14-million while the Rathwick Bulk Services Pump Station will receive R14.2-million.
The Hofmeyr Pump Station will be upgraded to the value of R9.4-million, Ilinge bulk services will be funded to the tune of R800 000 and Tarkastad will get R500 000 for bulk services.
Sakhisizwe will have the Elliot Waste Water Treatment Works upgraded at R3-million and the funding of the Mthingwevu Water Supply Scheme at R16.4-million. Intsika Yethu is set to receive R95-million for the Tsomo River Abstraction and Water Treatment Works and R45-million for the Lubisi Scheme Water Treatment Works. Engcobo will be funded to the tune of R35-million for the Sitholeni Water Treatment Works.
The total funding per municipality will include R11-million for Inxuba Yethemba, R55-million for Emalahleni and R226-million for Intsika Yethu. Engcobo will receive R126-million and Sakhisizwe R40-million. Enoch Mgijima will receive R118-million.
CHDM was not generating enough of its own revenue to fund the capital budget and the budget deficit was placing serious strain on the finances of the municipality.