Adopted draft annual budget exceeds R1bn

The draft municipal budget for the 2018/19 financial year, as well as the revised Integrated Development Plan, was tabled by the executive mayor of Mossel Bay Municipality, Alderman Harry Levendal, at the town council meeting on Thursday, 29 March.

Alderman Levendal describes a proper budget as an IDP-based budget as well as a budget that secures financial sustainability over a longer period with the aim to ensure this municipality operates and functions as a going concern for many generations to come.

He stated that the 2018/19 budget is again focused on service delivery, as the community was consulted on its needs and consulted through the IDP public participation processes.

It is the first time in the history of Mossel Bay Municipality that the total proposed annual budget exceeds R1 billion. The total budget for the 2018/19 financial year amounts to R1 166 302 468. This consists of a capital budget of R170 192 225 and an operating budget of R996 110 243. The capital budget amounts to 14.6% of the total budget and the operating budget to 85.4% of the total budget.

The proposed capital budget shows an increase of 11.4% compared to the revised capital budget of the current (2017/18) financial year.

The 2018/19 capital budget is allocated mainly for the development of bulk and other much-needed infrastructure that will enhance the capacity of basic service delivery in a sustainable manner. The major infrastructure upgrades or new developments funded under the 2018/19 capital budget is allocated as follows: Technical Services (R98.3 million); Community Services (R22.8 million); and Planning and Integrated Services (R37.5 million). The capital budget will be funded with an amount of R92.02 million from the Municipal Capital Replacement Reserve Funds, while the balance will be funded from external sources which includes Municipal Infrastructure Grant (MIG) funding and external loans.

The proposed operating expenditure budget of R996 110 243 shows an increase of 6% over the current revised 2017/18 budget of R939 534 540. The operating revenue budget amounts to R1 014 950 990.

This includes capital transfers and donated assets to the value of R39 997 000. The operational revenue budget for the 2018/2019 financial year of R974 953 990 shows an increase compared to the operational budget of the 2017/18 financial year of R930 242 547. The outer financial years increase by 1.1% and 5.6% year on year.

The municipality relies mainly on service charges to balance its budget, which are derived from the following sources: Electricity charges (R404.6 million); Water charges (R118.5 million); Sewerage charges (R63.5 million); and Refuse removal charges (R56.3 million).

Cognisant of the heavy burden ratepayers already carry in the current economic climate, the municipal council tried to keep the rate increases to the absolute minimum that is required to maintain service delivery at an acceptable standard, as well as to ensure the continued maintenance and upgrading of existing infrastructure.

However, it has not been possible to contain the tariffs to six percent across the board.

• The proposed increase for electricity is 6.84%. The 20 kWh free electricity units for all residential customers will fall away as from 1 July, except for indigent households.

• Vacant land owners for both residential and commercial property will be paying more than the increase of 7.9% on property rates, while water and sewerage tariffs increased by 6.5% and 6% respectively.

• Refuse charges increased by 15%, which is the second of approximately four increases that will be above the inflation increase. The 15% tariff increase is needed to contribute to the costs of the proposed new regional landfill facility for the Eden District municipal area. The municipality, however, is investigating several waste management alternatives.

The plight of the poor has again been considered in the 2018/19 budget and it is proposed that households classified as indigent will receive a monthly subsidy of R636.72, inclusive of VAT, on their household accounts, subject to certain conditions regarding monthly income and water and electricity consumption. Households classified as poor will receive a subsidy of R318.36, inclusive of VAT.

These households will continue to receive six kilolitres of water free and pay no basic charges on water. Indigent households will continue to receive 50 kWh of free electricity per month.

As in the present financial year they will also not pay for sewerage and refuse removal services and do not pay property rates on the first R81 000 valuation of their properties, if the market value of the house is less than R81 000; otherwise the indigent household will receive a subsidy equal to the market value property or the first R50 000.

The 2018/19 budget, like previous years, also brings financial relief to the pensioners in the form of special rebates in property rates and sewerage charges.

To qualify for these rebates the total monthly income limit of a husband and wife at which pensioners will become eligible for a discount of 50% on their property rates and sewerage charges is R14 575 per month. The limit to qualify for a discount of 30% is R19 400 per month. The closing date for applications to qualify for this benefit has been changed to 31 May of each year.

Property rates are levied in terms of the Property Rates Act and the income generated from this source is used to balance the budget. However, the first R15 000 valuation of developed residential properties is exempted from the rates and a rebate is granted on the balance of the valuation to a maximum of R35 000 for residential households for the 2018/19 financial year.

Alderman Levendal, at the tabling of the draft 2018/19 annual budget, called on all residents to join hands with the municipality by faithfully honouring their financial obligations towards the municipality and assured residents that continued clean administration and good governance would

Cognisant of the heavy burden ratepayers already carry, the municipal council tried to keep the rate increases to the absolute minimum.