CDM adopts 2019/2020 IDP/Budget

Capricorn District Municipality adopted the 2019/2020 IDP/Budget. The R1, 029 billion budget was adopted during a council seating held on 23 May 2019 at CDM Council Chamber.

The 2019/2020 IDP/Budget notice was given in terms of Chapter 5, Section 25 (4) of the Local Government: Municipal Systems Act (Act 32 of 2000) and Chapter 4, Section 22 of the Local Government: Municipal Finance Management Act (Act 56 of 2003).

The proceedings for ordinary council meeting held on 23 May 2019 commenced with the election of the new Speaker of Council. The new Speaker elected was Cllr Maite Monica Mohale. Cllr Mohale proceeded to preside over the council meeting immediately after her election and continued with proceedings of council which included report on the progress and review of 2018/2019 IDP/Budget framework/process plan and reviewed IDP 2019/2020 – 2020/2021 & Budget 2019/2020 MTREF.

The Executive Mayor of Capricorn District Municipality Cllr John Mpe, presented the 2019/2020 IDP/Budget and related financial policies.

WATER SUPPLY

In Lepelle Nkumpi, we will be investing R237.8 million for MTREF period as compared to R299 million which was budgeted for in 2018/19. This is for the implementation of regional water schemes which will benefit 4070 households.

The MTREF budget of R168 million was put aside for water projects in Blouberg in the previous financial year and in the new financial year we are investing R213.1 million for MTREF to implement water projects to benefit 4872 households. In embracing partnerships with private sector in water supply, we signed an agreement with Waterberg JV Resources Pty Ltd Mine operating in Blouberg to jointly develop a water supply management plan to increase the water supply and infrastructure capacity for both the local community and the Mine.

In Molemole in the last financial year, we set aside the budget of R48m to complete water projects that benefited 2 387 households. This time we will be investing MTREF budget of R107.4 million for implementation of Regional Water Supply projects which is going to benefit 5,499 households once completed. 

OPERATIONS AND MAINTENANCE

We have attended to breakdowns and repairs of infrastructure and boreholes to 44 villages in Blouberg, 23 villages in Molemole and 24 villages in Lepelle Nkumpi to ensure that residents are not short-changed because of breakdowns. For the financial year 2019/20, we are putting aside R24.9 million to continue operating and maintaining our water infrastructure 

SANITATION

In 2018/19 we set aside R21m that was used for sanitation projects. To continue on this delivery, we have not deviated from the previous year budget. We are planning to roll out more rural sanitation projects with R21.7 million for 2019/20 financial year. 

ELECTRICITY AND ENERGY

Honourable Speaker, in the year 2000, 41% of our population did not have access to electricity. In the previous financial year, 89% of our households were connected to the grid. We are pleased to report that today, 96% of households in the district are connected to the grid to enjoy the convenience of cooking, refrigeration, heating and lighting – thanks to partnership with Eskom and local municipalities. 

ROADS AND TRANSPORT

In further reducing backlogs in proper roads that for aesthetic appreciation and to unlock the economic potential, our local municipalities  supporting, Roads Agency Limpopo (RAL) which is the implementing agent continue to upgrade and maintain various roads while implementing new ones. During the District IDP/Budget Lekgotla, RAL has yet again emphasized that the District need to submit a list of priority roads for upgrading in consultation with Local Municipalities, Traditional Authorities and all other relevant stakeholders. That is going to be done after our special IGR meeting. The budget allocation for roads is sitting with RAL. 

SPATIAL PLANNING, LAND USE AND ENVIRONMENTAL MANAGEMENT

In 2018/19 we allocated R500 000 towards implementation of the SDF and R17, 4 million for Environmental Management. Going forward, we have allocated R15, 9 million for the two key performance areas to position us to be a planning theatre that will speedily shape the perfect spatial pattern for development to flourish. 

ECONOMIC DEVELOPMENT AND TRANSPORT PLANNING

As you know, the foregoing financial year was characterised by tough economic times – increasing job losses, occasioned by technical recession, low investor confidence and general negative global outlook on our economy. This posed a threat to the object of our economic transformation agenda. This is because a true test and essence of sound economic transformation is job creation and reduction of unemployment. Every promise of a job is an answer to a call by young people, whether economic times are tough or not. Looking forward, in the coming financial year, an allocation of R2.9 million as compared to the R3.7 million that was allocated in the previous financial year has been made to implement local economic development programmes and transport planning. 

EMERGENCY SERVICES AND DISASTER MANAGEMENT

To this end, we have put aside R18.9 million for disaster management and emergency services – in the previous financial year it was R10 million. In terms of emergency services, we allocated R15.5 million for the completion of the TT Cholo Fire Station. 

SOCIAL TRANSFORMATION

We have allocated R1 million towards social transformation programmes to continue addressing empowerment of special groupings and creating an institutional framework that will facilitate the effective implementation of our social responsibility programmes. 

INSTITUTIONAL TRANSFORMATION

We have also allocated to Corporate Services a budget of R17 946 000 that will cover Information Technology (IT) related expenses, purchase of furniture, vehicles, and refurbishing some O&M and fire services fleet, the parking shades and installation of air conditioners, fire extinguishers and offsite storage. 

BUDGET RELATED POLICIES

Fellow councillors, let me also highlight that the Division of Revenue Act (DORA) is issued to show the allocations in terms of each grant, either conditional or non-conditional. We are experiencing more strain in this MTREF budget 2019/20. Most money is channelled towards water, sanitation and Operations & Maintenance, as water is generally our core function, hence from the equitable shares portion and WSIG Grant, it shows an increase allocated for repairs and maintenance that basically talk to O&M. So the overall budget includes the R 932 627 000 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.

If you look at the Operating Revenue, apart from revenue from grants, there is an increase of 7% on the interest on investments, totalling to R 27 542 000. Another increase of about 6% on the water sales, totalling to R 68 027 000.

Coming to the Operating Expenditure, our salaries will increase to R 312 371 000; while the councillors allowances increased to R 15 467 000; general expenses is R 129 085 000. However the operating projects has decreased to R 68 020 000; the repairs and maintenance is seen increased to R 55 614 000; while the bulk water purchases is at R 85 428 000 and the depreciation is R 65 626 000

If we go down to the Capital Budget which is at R 309 134 000, it has projects funded by equitable share and Municipal Infrastructure Grant (MIG). The Capital budget includes Operations & Maintenance of R 16 220 000;

Honourable Speaker, budget related policies form greater part of the budget process as it gives guidance towards the direction on the financial management within an institution. We have the 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. In this policy we have not made any changes.

On Cash and investment policy, that ensures an appropriate, prudent and effective cash management and investment, again we were satisfied with the content in the policy and no changes were made

On Tariff policy that seeks to prescribe the accounting, administrative policies, and procedures relating to the determination and levying of tariffs for services we render to our people, no changes were made. The tariff for 2019/20, 2020/21 and 2021/22 were increased by 6% as per the guidelines in the budget circular issued by Treasury. 

On Virement policy that provides guidelines to be followed, to effect virement of approved budget during the course of the financial year, no changes were made. 

We have effected changes on Petty cash policy where we have increased the maximum amount from R4000 to R10 000 per month, due to the historic spending of departments and the respective units and the introduction of e-wallet cards. Petty cash policy’s purpose is to ensure the cost-effective and efficient use of petty cash funds while maintaining the required level of control in the municipality.

 

On the Supply chain management policy that enables 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 ensure that all assets are effectively and efficiently controlled, utilised, guarded and managed is the Asset management policy. It focuses on the planning, acquisition, operations and maintenance and disposal activities. No changes were made to the policy. 

The Delegations of financial powers policy which purpose 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 were the individual to whom authority has been delegated can commit the municipality and/or incur liabilities on behalf of the municipality and no changes were made to this policy.

On the Indigent policy that allows municipalities to target the delivery of essential services to citizens who experience difficulties of life and below a minimum income threshold, this policy ensures that such citizens have access to package of essential services, no changes were made,

Bad debts provision and write off policy that ensures that sufficient provision for bad debt is provided for, no changes were made. 

Budget 2019/20

Honourable 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.

Honourable Speaker, if you look at the 2018/19, the total budget was at R949 million, which comprised of R251 million for capital budget and R752 million for operating budget, which represents a 76/24 ratio.

All the outlined programmes in the IDP for the new financial year will be implemented with a total budget of R1, 029 billion, which comprises of R720 million operational expenditure and R309 million capital expenditure which represents a 72/28 ratio. This total budget includes the R932.6 million of grants plus the R96.9 million revenue from water sales, the interest on investment and the other income from sale of tenders.

It is therefore my honour to table this reviewed IDP 2019/2020 – 2020/2021, budget 2019/20 for MTREF period and budget related policies to you, the Council and to the people of Capricorn district – for adoption.

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