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2021/22 IDP and Budget Presentation By Executive Mayor Of Capricorn District Municipality Cllr John Mpe at Bolivia Lodge, Polokwane
21 May 2021
Honourable Speaker Cllr Maite Mohale
Our Chief-whip Cllr Calvin Masoga
Members of the Mayoral Committee
Chairpersons of Section 79 and 80 Committees
Our esteemed traditional leaders
Leadership of the Opposition parties represent here
Acting Municipal Manager
CDM management team and supporting staff
Representatives of SALGA, government departments, municipalities
the media; Distinguished Guests;
Thobela
In the past 5 years, this Municipality grappled with many challenges of water provision, lack of sanitation, electricity cuts and load shedding, high rate of unemployment, poverty, nepotism and corruption and today we speak of Covid-19 pandemic that is ravaging the world. The other pressing issue we dealt with was poor implementation of projects and in some instance lack of project management, monitoring and evaluation.
We have taken a stock of challenges that hindered completion of many capital and operational projects and we have therefore identified a special suit of projects for reprioritization and completion before the end of this term in October 2021. These, among others include –
· Completion of all water and sanitation projects that were planned or started in financial year 2016/17.
· Interact with office of Presidency, to explore possibility of securing funds from Infrastructure South Africa (Presidency)
· We need to also explore water harvesting options in all our municipalities.
· The installation of smart water meters and implementation of cost recovery strategy to ensure revenue collection in all municipalities should be fastracked.
· We have discontinued the use of private water tankers and activated our trucks, and anticipate delivery of remaining trucks to augment existing truck and strengthern provision of water in our municipalities.
· Completion of TT Cholo Fire Station in Polokwane’s Aganang cluster and roll-out of learnership programme to train young people in firefighting within the District should be implemented.
· Management should also ensure that there is procurement of basic fire equipment’s for all the 28 traditional authorities in the District
· There should be an urgent refurbishment of Motumo trading post in Botlokwa – Molemole for tourism attraction
· We need to retain our Clean Audit and also dispense support to local municipalities to enhance their chances of clean audit.
· Council through Speakers office should appoint a Committee that will coordinate geographical name change to recognize heroes and heroines such as Lilian Ngoyi, Charlotte Maxeke, Sefako Makgato, Peter Mokaba and many others.
· We need to fastrack the finalization of District Development Model for the smooth implementation of One Plan that will incorporate key priority projects
· We need to work with PPGI to assist us in approaching private sector with an aim of investing and supporting our DDM
· Both DDM Technical and Political committees should be convened periodically to coordinate the DDM with the support from CoGTA and SALGA
· LEDET should be approached to assist us to develop and maintain heritage sites and gazette Nature Reserves such as Wolkberg and Makgabeng, this will assist to improve the tourism sector in the district.
· We are proposing to RAL, the return of D-Roads to District Municipalities and the reclassification of what belongs to municipalities and what belongs to the District to inform the return of D-Roads to municipalities.
Madam Speaker, all these must be completed before the new council starts with its business after elections. But to achieve that, we will utilise the existing budget of this current financial year and complement with the budget of the new financial year that we are presenting for adoption now.
Madam Speaker, it is my honour to present to this house, the Council meeting of the Capricorn District Municipality, the Integrated Development Plan and the budget for the 2021/22 financial year.
This budget seeks to allocate resources for the priorities that the new council will implement in its first financial year which we believe will unite us to extend basic services to more of our people. It also enables us to substantially fund the start of a new mandate term taking into account the diverse aspirations of our people to have universal access to water and other basic services and live a better life.
Honourable Speaker, let me remind this council that this budget speech is a culmination of a long consultative period with all partners in service delivery and it is based on the mandate they gave to us, the inputs from communities, and stakeholders in the Integrated Development Plan and budget. This explains why much of our budget projected for the MTREF period will mainly be used for key infrastructure projects and dealing at length with some of the bottlenecks impacting on accelerated service delivery.
Therefore, it gives me pleasure in terms of section 16(1) of Municipal Finance Management Act 56 of 2003, to present to the council a revised IDP and Budget for the financial year 2021/22. As you know, council must approve an annual budget for each financial year before the start of the next financial year. Section 16(2) of the MFMA states that the Mayor of the municipality must table the annual budget at a council meeting at least 90 days before the start of the budget year.
Fellow councillors, as expected a big chunk of the capital budget goes to water, sanitation and operations & maintenance, as water is generally our core function, hence from the Equitable Share and MIG conditional grant, it shows an increase allocation for repairs and maintenance. So the overall budget includes the R 950 767 000 of grants plus the revenue from water sales, the interest on investment and the other income from sale of tenders. The budget is 91% grant funded.
On the Operating Revenue, apart from revenue from grants, there is an increase of 2% on the interest on investments, totalling to R21 235 000. Another increase of about 6% is on the water sales, totalling to R76 436 000.
Our Operating Expenditure is R877,2m which includes R364 796 000 budget for salaries and councillors’ allowances of R17 343 000. Operating projects budget is R67 232 000 and the repairs and maintenance is R20 388 000.
On the Capital Budget which is R323 927 000, we have projects funded from Equitable Share and MIG. The Capital budget includes Operations & Maintenance of R25 720 000. We have also allocated to Corporate Services a budget of R8 567 000 that will cover IT related expenses, purchase of furniture, vehicles and fire services fleet.
Madam Speaker, the budget we present here today will ensure that we fundamentally change the financial structure of the District in order to change our course towards the type of a District we desire. We desire a District that is developmental in nature, spatially integrated and united, liveable, embraces inclusive economic growth and allows us to remake ourselves in the medium term and beyond.
Madam Speaker, the total budget for 2021/22 financial year is R1 201 144 000. The budget thus comprises of R323,9m Capital Expenditure and Operational Expenditure of R877,2m.
This budget will enable us to substantially break the back of poverty as we progressively extend quality services to all residents and create a business-friendly environment. We remain mindful of the need to take into consideration the diverse aspirations of our people to have universal access to water and other basic services and live a better life.
Fellow Councillors, even in the midst of the Covid-19 pandemic, we never stopped delivering on the mandate of a better life for all, a mandate to put people at the centre of development. In the past 5 years we pulled out all stops to remind our people that we are equal to the task and that we can serve with speed, zeal, dedication and sense of urgency.
BUDGET RELATED POLICIES
The budget related policies form greater part of the budget process as it gives guidance towards the direction on the financial management within an institution. Below are the list of the budget related policies and their objectives individually.
CREDIT CONTROL AND DEBT COLLECTION POLICY
To document the processes and procedures that must be followed to ensure accounts receivable are collected in a timely, fair and cost-effective manner.
No changes were made to the policy.
CASH AND INVESTMENT POLICY
Ensures an appropriate, prudent and effective cash management and investment arrangement.
No changes were made to the policy.
TARIFF POLICY
To prescribe the accounting, administrative policies, and procedures relating to the determining and levying of tariffs.
No changes were made to the policy.
TARIFF STRUCTURE
It is a pricing structure the municipality charges a customer for services.
The tariff for 2021/22, 2022/23 and 2023/24 was increased by 6% for all three year respectively as per the guidance in the budget circular by issued by Treasury.
VIREMENT POLICY
To provide guidelines to be followed, to effect virement of approved budget during the financial year.
No changes were made to the policy.
PETTY CASH POLICY
The purpose is to ensure the cost-effective and efficient use of petty cash funds while maintaining the required level of control in the municipality.
No changes were made to the policy.
SUPPLY CHAIN MANAGEMENT POLICY
Enable municipality to manage the supply of goods, services and works in a manner that is fair, equitable, transparent, competitive, and cost effective.
No changes were made to the policy.
ASSET MANAGEMENT POLICY
Ensures that all assets are effectively and efficiently controlled, utilised, guarded, and managed. Its focuses on the planning, acquisition, operations and maintenance and disposal activities.
No changes were made to the policy.
DELEGATIONS OF FINANCIAL POWERS
The purpose of this policy is to establish a framework for delegating authority within the municipality. The policy is designed to facilitate efficiency and effectiveness and increase the accountability of staff for their performance. The policy applies to formal delegations where the individual to whom authority has been delegated can commit the municipality and/or incur liabilities on behalf of the municipality.
No changes were made to the policy.
INDIGENT POLICY
Allow municipalities to target the delivery of essential services to citizens who experience a poor quality of life. Ensure that the indigent can have aces to the package of services included in the FBS programme.
No changes were made to the policy.
BAD DEBTS PROVISION AND WRITE OFF POLICY.
To ensure that sufficient provision for bad debt is provided for.
No changes were made to the policy.
COST CONTAINMENT POLICY
The object of these Regulations, in line with sections 62(1)(a), 78(1)(b), 95(a) and 105(1)(b) of the Local Government Municipal Finance Management Act 2003, is to ensure that resources of a municipality are used effectively, efficiently, and economically by implementing cost containment measures.
No changes were made to the policy.
Madam Speaker, as we close this council term, we are also mindful of the good work done by us as a District despite challenges we faced. When our people go to the polls on 27 October 2021 to usher in the 5th Local Government administration, they will do so acknowledging that, while today is better than yesterday, their tomorrow must be better than today. They will go to the polls at a time when 76% of them have access to portable water after CDM addressed their plight with mega projects and provided thousands in the indigent bracket with free basic water. They will also cast their vote when over 96% of them are connected to the electricity grid and while only about 33% have proper sanitation and 30% having access to waste removal.
Madam Speaker we want to request this Council to allow Management to ensure that all matters raised by Audit on our IDP and Budget are addressed without any material impact on our Budget and IDP, matters such as Annual targets on strategy phase aligns with annual targets on project phase, KPIs be consistent with the targets, consistent Project naming on both strategy and project listing and budget, adherence to SMART principles and Correction in the crafting of KPIs or targets
We want to thank all stakeholders and residents who participated in the processes, including representatives of non-profit organisations, business, the youth, women, people living with disability and the faith-based sectors. We also acknowledge the inputs and advice from various experts, especially from the universities and research institutions in the district that augmented the work of our management. We continue to thank the entire workforce of CDM, Makgoshi and all councillors for the sterling work done.
It is therefore my honour to table this reviewed IDP and Budget 2021/22 to this Council for adoption.
Thank you!