7.3% sting in budget tail

The annual budget for the Ekurhuleni metro was announced at a special council meeting held in Germiston last Thursday.
The speech, presented by Clr Moses Makwakwa, member of th mayral committee for finance, presented the Medium Term Revenue and Expenditure Framework for the period 2014/2015 to 2016/2017.
The bottom line for residents is an increase of approximately 7.3% to your monthly municipal bill.
Medium Term Revenue and Expenditure Framework
The metro has revenue of R85 billion which is made up of R28 billion in 2014/15.
This represents an increase of 5.7% year on year.
The main contributors to the R28 billion are:

• R4 billion from assessment rate
• R12 billion from electricity sale
• R1 billion from refuse collection
• R4 billion from water and sanitation
• R5 billion from government grants
• R2 billion from other revenue

Proposed Tariff
In ensuring that the metro continues to provide sustainable services, the following tariff increases were proposed:

• 0% increase on cemeteries and recreational halls.
• 7.5% on assessment rates.
• Between 6.3% to 7.6% on electricity.
• 8.1% increase on water for both residential and business.
• 8% on sanitation for both residential and business.
• Refuse removal increase ranges between 2.4% and 7.1% for residents and 6% for business. 

Factoring these proposed tariff increases, the average increase on an account will be about 7.3% compared to the 9.3% average increase in 2013/2014 budget.
“This is a clear demonstration that we are committed in providing affordable services and to broaden access,” Makwakwa said.
Social support
In view of the proposed tariffs, the municipality will provide the following social package relief:

• The first R150 000 on property value is exempted from assessment rates.
• For pensioners, an additional rebate for property assessments ranges from 10% to 100%.
• Churches and NGO’s are exempted from assessment rates
• All households will still enjoy 6kl of water and sanitation service for free.
• Low end users will continue to receive an additional incentive of 100kw of free basic electricity.

Indigents
The metro has allocated just under R800 million to this sector, therefore all our registered indigents will continue to receive: 

• 100% rebates on assessment rates including households headed by children.
• Free 9kl of water.
• Free 9kl of sanitation.
• Free refuse removal.
• 100kw of free basic electricity.
• Free burial.

The metro invites all indigents in Ekurhuleni to visit their nearest customer care centre to register so that they also can benefit from this package.
The metro has also set aside R17-m for the Grant in Aid programme in its efforts to build social cohesion.
In delivering his speech, Makwakwa comments that based on National Treasury assessment during May 2014, Ekurhuleni remains the most affordable metro to live in.
“We remain very concerned by the fact that we are still collecting below our target of 93%, whilst there is high capital pressure for service delivery. “However, through the implementation of the revised revenue protection and enhancement project, we will continue with the battle of improving on collection.” 
The metro has set out steps it will take to improve collection:

• Further intensify awareness campaign through Siyakhokha Siyathuthuka.
• e-Siyakhokha registration drive to maximum exploitation of E-service platform to improve revenue collection.
• Apply aggressive credit control measures to recover outstanding debt. 
• Engage in public private partnership to eradicate the unacceptable levels of water losses and to progressively install meters where stands are unmetered.
• Re-open the interest waiver scheme on outstanding accounts for business and residents.

Expenditure framework
The metro’s expenditure is R85-b which is made up of R28-b in 2014/15. This represents an increase of 5.7% year on year. 
The main contributors to the R28 billion are:

• R10-b for Bulk Water, Electricity and Sewer.
• R2-b for repairs and maintenance.
• R5-b for personnel costs.
• R1-b for bad debt provision.
• R2-b for depreciation.
• R8-b for general and grants expenditure.

Makwakwa announced that the metro’s expenditure increase of 5.7% is in line with inflation but commented that the metro strives to contain operating costs.

Captial investment
Ekurhuleni will be investing R12-b over the Medium Term Revenue and Expenditure Framework period which is informed by the capital investment framework (CIF). 
Urban restructuring has been allocated R3.6-b, R4.8-b will go to upgrading and renewal and R3.6-b to economic development.
The capital investment will be spent in the following manner:

Transport, roads and stormwater
Money has allocated, for 2014/2015, as such:

• R441-m for the Integrated Rapid Public Transport Network.
• R93-m for construction of an intermodal transport facility and taxi ranks including a taxi rank in Bluegumview, Duduza.
• R40-m for the replacement of municipal buses.
• R135-m for continued rehabilitation of roads.
• R78-m 2014/2015) for roads infrastructure in the low cost housing areas.
• R63-m for the construction of tertiary roads.
• R100-m for stormwater upgrades.

Energy

• R26-m for increasing the provision of public lighting covering street and 72 high mast lighting.
• R161-m towards corporate electrification.
• R47-m for the installation of protective structures and pre-payment meters to prevent electricity theft, vandalism and for safety.
• R92-m for substation and to minimise network downtime and unnecessary electricity outages.

Water and sanitation

• R150-m water loss programme.
• R100-m upgrading water networks.
• R66-m for human settlements essential services.
• R9-m for emergency water and sanitation services to informal settlements.

Human settlements
Ekurhuleni is geared for the full accreditation of providing houses to the residents. 
R4.3-b will be added to Ekurhuleni’s capital investment programme as soon as the full accreditation is assigned.
The following will be spent in 2014/2015:

• R7 million 2014/2015) for land acquisition
• R94-m 2014/2015) for development of social housing and upgrading of Council rental stock
• R102-m urban renewal.
• R80-m for mixed use housing development

Community safety

• R235-m is set aside for residents’ safety.

Disaster and Emergency

• R57-m for fire stations including Duduza and KwaThema.
• R29-m for specialised vehicles

Environment and waste management

• R6-m towards rehabilitation of environmental resources including Payneville Ext 3 and degraded Wetlands
• R4-m for upgrading the Ambient Air Quality Monitoring Stations
• R63-m for the upgrading waste fill sites and public offloading facilities.
• R49-m for waste removal trucks.

Sports, recreation, arts and culture

• R46-m for the construction and rehabilitation of sport, art and other recreational facilities, including Duduza.
• R31-m for the construction of new libraries in Tsakane and Brakpan, and rehabilitation of other libraries.

The DA proposed an alternative budget which can be viewed here.