The Ethekwini Municipality consolidated R50.8 billion 2019/2020 medium term budget tabled for public consultation attempts to strike a balance between on-going service delivery imperatives and responding to the developmental challenges confronting the city.
The draft budget was tabled at a Full Council Meeting held on Thursday, 28 March at the Durban City Hall. It has been drafted against the current global economic climate. However, in terms of the Municipal Finance Management Act, the city has produced a fully funded budget which is balanced, credible and realistic.
Acting head of communication Mandla Nsele said the operating budget, which funds the continued provision of services provided by the municipality, increases to R 42.9 billion in 2019/20, R 47.0 billion in 2020/21 and R 51.1 billion in 2021/2022 respectively.
“The growth of the operating budget is mainly due to the repairs and maintenance of infrastructure, the cost of addressing service delivery backlogs, the cost of bulk purchases like water and electricity, the impact of capital spending on operating expenditure and employee related costs as a result of providing for critical vacancies and salary increases.”
He said notwithstanding the increasingly challenging economic constraints, the budget continues to sustain service delivery by re-prioritising expenditure to ensure key objectives are achieved taking heed of National Treasury and the belt tightening measures made in the National Budget speech.
“The Capital expenditure is budgeted to rise to R 7.9 billion in 2019/20 and thereafter to R 8.0 billion in 2020/21. R 17.1 billion (approximately 73 %) is allocated to meeting infrastructure and household services needs and backlogs over the medium term. R 3.7 billion of this is directed to new housing developments and interim servicing of informal settlements,” said Nsele
He said this is despite a host of developmental challenges inherited from the former regime service delivery remains at the very heart of eThekwini. “The capital budget continues to reflect consistent efforts to address backlogs in basic services and the renewal of the infrastructure of existing network services especially roads and electricity.”
Provisions in this medium term budget continue to support government’s commitment to broadening service delivery, attracting investors and expanding investment in infrastructure, while taking into account the constrained fiscal environment.
“The 2019/20 draft budget has been developed to contribute to the municipality achieving the strategic objectives set out in the Integrated Development Plan,” said Nsele
He said there are strategic priorities for the year 2019/2020. “In order to ensure immediate measures to reignite development and structural reforms over the medium term in line with the strategic vision outlined in our Integrated Development Plan (IDP), the municipality has identified priority areas to be addressed during the 2019/20 financial year, i.e. water challenges, human settlements, economic development, financial sustainability, access to public transport, service delivery backlogs, rural development, infrastructure degradation, food security amongst others,” Nsele said.
Deputy Mayor Councillor Fawzia Peer explained the increase in tariffs, “Tariff increases are a result of repairs and maintenance of infrastructure, cost of addressing service delivery backlogs, bulk purchases of water and electricity, the impact of capital spending on operating expenditure and employee related costs.”
She said the rates and tariff increases in some instances have been unavoidable due the water and electricity bulk tariff increases being well above inflation, salary increases above inflation, and ensuring that service delivery is not compromised.
“However, the overall increase in expenditure with the exception of salaries, wages and allowance and bulk tariff increase is only 5% which is below CPI. This must be appreciated within the context that the Salaries & Wages increase is 7% which was negotiated and approved by the central bargaining council (general increase), and a further 0.5% had to be budgeted for notch increases, whilst the impact of filling vacancies will have an impact of 9% year-on-year, ” said Peer.
The tariff increases are as follows: Assessment Rates 6.9 %
- Residential 15.0 %
- Business 15.5 %
Electricity 14.4 %
Sanitation 9.9 %
Refuse 9.9 %
Peer said, ” The rates increase of 6.9% is about the lowest in the country, especially when compared to Johannesburg (11.7%) and Cape Town (averaging about 9% based on their rate randages following a further revaluation) while the electricity tariff increases of 14% is an indicative increase due to the 15.69% increase expected from Eskom. However, should NERSA further review the Eskom increase, the City will also review the tariffs. With regards to the water tariff increase of 15% for domestic consumers and 15.5% for business are based on the Umgeni Water Board increase of 9.6% and takes into account the additional capital expenditure on Water in terms of the rollout of the Western Aqueduct, huge urbanization increase trends, provision of ablution facilities, as well as free basic water.”
Peer added that sewer tariff has been contained to 9.9% despite similar challenges to water in terms of increased service delivery demands, capital expenditure, ablution blocks and additional servicing of pit latrines.
“The 9.9% refuse tariff increase is due to additional areas being serviced, additional cleaning of the beachfront, CBD, and townships, and hence the increase above CPI could not be avoided,” she said
The Deputy Mayor appealed to all residents to continue to utilise water and electricity sparingly and also encouraged residents to attend the budget consultations.
“Despite increasingly challenging circumstances, service delivery will continue to be sustained through the 2019/20 budget by re-prioritising expenditure to ensure that key objectives are achieved. ” said Peer
Peer concluded by saying, “The proposed budget also provides all citizens of eThekwini with an opportunity to assess the Municipality’s service delivery performance, challenges and review the effectiveness of current programmes. “
The mayor together with councillors will take the draft budget to the community for their input and suggestions and will then be adopted at the end of May 2019. Provisions in this medium term budget continue to support government’s commitment to broadening service delivery and expanding investment in infrastructure. Details of venues and dates will be advertised soon.