The 2016/2017 municipal budget and revised Integrated Development Plan (IDP) were approved by the Kouga Council at a meeting in Jeffreys Bay on Tuesday (31 May).
The new budget will be implemented from 1 July 2016 to 30 June 2017.
Kouga Executive Mayor Daphne Kettledas said the total operating revenue for the municipality was expected to increase by 8,06% to R637,174-million in the new financial year when compared to the 2015/2016 adjustments budget.
The total operating expenditure would amount to R686,357-million, resulting in a deficit of R49,182-million.
The Executive Mayor said the deficit was mainly due to non-cash items such as depreciation and asset impairment, for which R83,123-million has been budgeted.
“This means that, despite the deficit, our budget is fully cash-backed, as confirmed by Provincial Treasury in their assessment of the new budget,” she said.
According to the budget documents tabled before Council, funding for the 2016/2017 operating budget will be obtained from various sources. These include service charges such as electricity, water, sanitation, refuse collection and environmental management fees (56%). The remainder will be funded from property rates (23,32%) as well as grants and subsidies received from national and provincial government (15,8%).
The following increases in property rates and service charges will be implemented from 1 July 2016:
- Property rates: 9%
- Water: 9%
- Sanitation: 9%
- Refuse: 9%
- Electricity: 7,78% (on average, depending on the consumer type)
- Environmental management fee: 6%
The Executive Mayor said the increases for the coming year were higher than inflation in anticipation of the cost of operating and maintaining the extensive new sewer and water infrastructure that had been put in place during 2015/2016.
“We are mindful of the fact that people are struggling financially, hence, the budget proposes low tariff increases for the following two years – namely, 6,2% for 2017/2018 and 5,9% for 2018/2019.”
The major operating expenditure items for 2016/2017 are employee-related costs (33,98%), bulk electricity purchases (27,2%), depreciation (12,11%), general expenses (9,87%) and repairs and maintenance (5,24%).
The Executive Mayor said that while the percentage budget for repairs and maintenance was lower than the National Treasury guideline of 8%, this had been done deliberately to address the urgent need to replace the municipality’s ageing fleet.
“After careful consideration, we decided it would be better for service delivery if we started replacing old vehicles with new ones. Our fleet is very old and the money that is being spent on constantly having to repair them will go further if we buy new vehicles,” she said.
“This means that a portion of the money that would have gone to repairs and maintenance has been moved to our capital budget to purchase new vehicles.”
The capital budget for 2016/2017 totals R63,069-million, which is 39,65% less than the 2015/2016 adjustments budget. The decrease can mainly be attributed to a reduction in the grant funding from the Department of Human Settlements for capital projects.
A total of R3,8-million of the capital budget will be used to purchase new compactor and skip trucks for the collection of refuse and environmental management. A further R1-million has been set aside for a new mesh truck for the Cleansing and Parks Department.Other highlights on the capital budget include:
- R14,679m for the ongoing upgrade of the Kruisfontein Waste Water Treatment Works
- R8,368m towards the replacement of digesters at Patensie
- R8,073m for high mast lights
- R6m for the electrification of Ocean View
- R5,5m for a new community hall at KwaNomzamo
- R4,321m for the upgrading of sport facilities
- R3,73m for internal sewer reticulation at Wavecrest
- R2m for a new transfer station at Patensie
- R2m for water conservation and demand management projects
- R1,573m towards a new main incoming line to Jeffreys Bay
- R1,48m for a new pump at the Cormorant Sewer Pump Station at Aston Bay
Media Release – Laura-Leigh Randall – Kouga Municipality