The Executive Mayor of Mossel Bay, Alderlady Marie Ferreira, tabled a total draft budget of R880,6 million for the 2013/2014 financial year at the Council meeting on 28 March 2013. This compares with the second adjustments budget of R843,3 million for 2011/2012 and the initial budget of R818 million for the same year.
The total 2013/2014 budget is comprised of a capital budget of R100 million and an operational budget of R780,5 million. The operational budget includes departmental and non-cash transactions in the amount of R103,4 million. If this amount is subtracted the operational cash budget for 2013/2014 amounts to R677 million.
The Mayor announced that the proposed increase for services rendered by the Municipality as well as property rates is 6% across the board. The National Electricity Regulator of South Africa (NERSA) notified municipalities on 26 March 2013 that a guideline increase of 7% will apply in respect of municipal consumers. Municipalities are, however, still awaiting the increase in the Eskom tariffs.
In her budget speech the Mayor said Council heeded the call of the National Treasury to pay particular attention to maintaining rates at affordable levels. She said the Municipality’s revenue and cash flows are expected to remain under pressure in the 2013/2014 financial year and it is necessary to manage all revenue and expenditure and cash streams effectively and to evaluate all spending decisions carefully.
The Mayor also said the time had come for all to lower their expectations with regard to levels of service delivery and infrastructure that are provided. She said it is clear that many ratepayers and consumers are struggling to keep their heads above water and rates and tariffs cannot be increased simply to appease the unrealistic demands of a minority of ratepayers who can afford much higher rates and tariffs.
The main categories of expenditure from the cash budget for 2013/2014 will be as follows:
- Employee-related costs of R190,9 million, which at 28,2% of the cash budget is below the national norm of 30%.
- Bulk purchases of R203,6 million, or 30,1% of the cash budget.
- Other general expenses of R128,3 million, or 19% of the budget. This category includes an amount of R65 million in respect of housing top-structures, which is derived from Provincial Human Settlements Funding.
The 2013/2014 Capital Budget will be financed mainly by R72,4 million from the Municipality’s Capital Replacement Reserve and R17,8 million in Municipal Infrastructure Grants, ie MIG funding.
The major allocations in the Capital Budget are as follows:
- Streets and Stormwater : R30,4 million.
- Electricity Services : R21,2 million.
- Sewerage Services : R17,1 million.
- Community Services : R16,6 million.
- Water Services : R12,5 million.
Alderlady Ferreira said an analysis of the Capital Replacement Reserve has shown that the present levels of financing of capital budgets from this Reserve are sustainable over the medium term. The Municipality’s policy is to contribute an amount equal to the depreciation costs towards the Capital Replacement Reserve annually. On this basis it is envisaged that the municipality will be able to finance the capital budget with between R71 million and R72,5 million annually over the next four financial years.
Council remains committed to addressing the plight of the poor and it is proposed that households respectively classified as indigent and poor both receive a monthly subsidy of R381,88, plus VAT, on their household accounts, subject to certain conditions with regard to monthly income and water and electricity consumption. This compares with R360,27, plus VAT, for both categories in the 2012/2013 financial year. These subsidies will cover the basic fees with regard to sewerage, refuse removal, water basic and electricity basic.
All households will continue to receive 6 kilolitres of water free per month. Indigent households will continue to receive 50 kWh of free electricity per month and all other households 20 kWh per month. As in the present financial year they will also not pay for sewerage and refuse services and do not pay property rates on the first R50 000 valuation of their properties.
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 will remain at R9 000 per month. The limit to qualify for a discount of 30% remains at R12 000 for the 2013/2014 financial year.
It is also recommended that the existing 40% discount on sewerage fees for pensioners whose income does not exceed R9 000 per month and 30% when their income is more than R9 000 but does not exceed R12 000, remains in place.
The budget document is available for public inspection and comment at municipal offices and libraries in Mossel Bay, D’Almeida, KwaNonqaba, Great Brak River, Hartenbos, Friemersheim and Herbertsdale. It will also be placed on the Municipality’s website. Comments must be in writing and reach the Municipal Manager, PO Box 25, Mossel Bay, 6065, by not later than 3 May 2013.