How Ndlambe balanced its budget
ONE of the general principles underlying a municipal budget is to ensure affordability and service delivery.
The budget process provides an opportunity to engage the stakeholders in finalising the budget. Officials are more likely to be ambitious during budget preparation process, but the engagement process assist in developing a budget that addresses the real issues within a municipal area.
The tabled budget with R100m deficit is a reflection of what the officials wish to achieve for Ndlambe Municipality.
Ndlambe’s operating budget is funded through three main revenue sources: surplus from our trading services, property rates and revenue from miscellaneous expenses.
The bulk of expenses, administration, salaries and roads are funded from the property rates. The tabled deficit is an excess to the anticipated property rates. Balancing the budget from R100m deficit could not have been achieved without a serious commitment and consideration of stakeholders’ input, particularly the Ndlambe Ratepayer Forum (NRF).
Tabling the budget at 6.4% was to show the predicament that we may find ourselves in if were to adopt budget at that increment. The officials and the finance portfolio councillor, councillor [Ray] Schenk, went to great lengths in explaining to the NRF the consequences any increase lower than 9%. Despite the view expressed by the NRF on the adopted budget, Ndlambe budget committee would like to thank the NRF for the valuable inputs during the engagement process followed on tabled budget.
A number of comments had been made on the adopted budget by the various parties. I would like to address some of these issues and any additional responses required may be followed up with municipal communications department. Such corrections are made with an understanding of the challenge posed by the introduction of mSCOA, which impacts on cost classification.
Ndlambe’s casual labour budget is linked to two factors: Ndlambe Municipal area has grown without staff additions and staff termination for various reasons was deliberately slowed down in non-key positions. More than average casual intake is in December-January, due to the seasonal influx to keep the towns clean and attend to stressed infrastructure. The greatest contributor to overtime is aging infrastructure and our fleet.
Ratepayers have raised a concern on an amount budgeted for computers, reported to [be] R4.5m. It must be noted that computers are funded from both operating and capital budget, [and] for 2018/2019 financial [year] the amount is R286,186, not R4.5m. Where areas of concern arise, such concerns will be addressed through prescribed processes.
Current employee costs are at 40% instead of the treasury norm of 35%. It must be noted that salary increments are determined by the Bargaining Council, [and] at the time of budget approval no agreement was reached between Salga [SA Local Government Association] and Bargaining Council on the increment. The factored increment [is a] conservative-likely scenario. Section 56 and councillor salaries are regulated, while councillor salaries are determined in terms of the gazette on upper limits.
Officials have very little influence on salary matters.
Despite our limited resources, prudent spending and cash management, an amount has been set aside for upgrading of Biscay Road in Port Alfred, purchase of two one-ton LDVs, an A cube refuse compactor and two 6,000l sanitation trucks. In addition an amount R197,000 was spent on small plant and equipment.
During the IDP/Budget imbizos, a number projects are requested and included in the IDP despite not being able to fund them. Administration always endeavours to see such projects implemented despite the funding limitations. A commitment to service our communities led to mobilisation of funds through the LED department. Such efforts saw a commitment from DEAT [department of environmental affairs and tourism] to the value of R10m to a number [of] environmental related projects in Ndlambe area. This is expenditure outside our budget but with a benefit accruing to Ndlambe.
We believe that the adopted budget is more of service delivery budget due to the operational [budget] being the greatest portion of the budget. Last week’s feature on Compucare had a few errors that need to be corrected. First, Compucare is situated on Southwell Road, not Albany Road as stated. Also, Candice Naude handles sales and enquiries for the company. We apologise for any problems caused.