WITH municipalities now nearing the end of the current mandate term, Capricorn district municipality is geared up to prepare for the new council term and its first financial year by consulting with all its stakeholders on IDP and budget.
To get the ball rolling, the municipality has approved a draft budget for the next financial year which pencilled a further roadmap to seek inputs from stakeholders.
Executive Mayor Gilbert Kganyago presented a draft budget during a council meeting held recently. The budget is comprised of R640m operational income and R354m operating income in allocations. The 2016/17 financial years’ budget proposal is part of a R4, 3 billion budget that is projected for the Medium Term Expenditure Framework (MTEF) period ending in 2019. The 2016/17 budget represents a 1% increase (R3m) from last year’s budget of R992m (after adjustment). From the proposed overall budget of R995m includes the R914m of grants plus the R81m revenue from water sales, the interest on investment and the other income from sale of tenders.
On operating revenue, specifically, there is an increase of 5% on the interest on investments, totalling to R22m. The increase of about 5% on the water sales, totalling to R 57m. There was a decrease of the other income. Operating expenditure, it has decreased from R663m in the current financial year to the proposed R640m for the next financial year.
This is because more other funds are channelled towards capital projects. The draft operating expenditure has the following adjustments compared to the current budgets of 15/16 financial year: Salaries will increase by 12% from adjusted budget R247m to overall of R278m; councillors’ allowances have increased to R11m while general expenses were decreased to R82m. The bulk water purchases is increasing to R51m. The other portion of the budget goes to the Debt impairment/ commission on water sales. Since we give 100% commission to the local municipality on the sale of water.
On capital budget, the budget has increased by 8% from R328m to R354m because of the following reasons: Capital budget has got projects that are funded by equitable share, water services operating grant from Department of Water Affairs and the Municipal Infrastructure Grant (MIG). The draft budget is allocated to various projects, which led to the overall amount of R 354m in the 2016/17 financial year. Most of the capital budget is distributed between water and sanitation and operations and maintenance projects.
“As this budget will be the first for the new financial year of the new council mandate term, we are pleased that about 85% of the capital budget is allocated to our core mandate – water and sanitation, which include operations and maintenance of water schemes”, Kganyago said. To this end, R261m is set aside for water and sanitation projects that include R40m for operations and maintenance.
“Our other core mandate, emergency and disaster management, will see an increase of 46% from R13m to R19m that will enable us to strengthen our fire-fighting army and our response to disasters that befall our people as a result of extreme weather patterns such as gale force winds, thunderstorms and heavy rains”, he said. There is also an additional R2m allocated to the cost recovery.
“The central component of our administration – Corporate services, will benefit from R24m that is set aside for the purchase of furniture, vehicles, and refurbishment of some operations and fire services fleet, the parking shades and installation of air conditioners, fire extinguishers and offsite storage”, he stated.
Notwithstanding budgetary constraint, the rest of the budget votes per department will see no significant increases and will thus be unpacked in detail in the State of the District Address.
This budget is strongly redistributive of the resources of the municipality and addresses the service delivery mandate that we carry in line with the six Key Strategic Thrusts or KPA’s of local government including: Institutional Transformation and Organisational Development, Basic Services and Infrastructure Delivery, Spatial Analysis and Rationale, Local Economic Development (LED), Good Governance and Public Participation, Municipal Financial Management and Viability.
Consultations will take place as follows: sector departments and parastatals (14 March), traditional leaders (16 March), business and academic institutions (17 March), NGO’s and CBO’s (17 March), IDP Rep Forum (23 March).
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