WITH the country downgraded to junk status by international financial ratings agency Standard & Poor’s and the threat of rising fuel and food costs, Durban ratepayers also face an average of 6.9 per cent increase in municipal rates.
Tabling her draft budget in council last week, Mayor Zandile Gumede’s maiden budget shows capital expenditure is budgeted to rise to R7.3 billion in 2017/18 and thereafter to R7.8 billion by 2019/20.
Of the capital budget, about 75 per cent is allocated for infrastructure and household services and backlogs over the medium term. Of this, R2.4 billion is directed to new housing developments and interim servicing of informal settlements.
Gumede said that while austerity measures had been applied to address the initial budget deficit, some increases had been unavoidable, such as the bulk water tariff increase by Umgeni Water Board of 15 per cent.
Ratepayers will also fork out more for electricity which has been hiked by 1.88 per cent. Domestic water consumers will pay 15 per cent more for water, while businesses pay 17 per cent more for water. The tariff for refuse removal and sanitation has been increased by 9.9 per cent each.
Free basic services package, pensioners, child-headed households, disability grantees and the medically boarded are exempt from paying rates on the first R460 000 of their property value. Residential Properties valued up to R230 000 (previously R 85 000) will be exempt from paying rates. All other properties valued above R230 000, for the first R 120 000 of value, no rates will be charged.
The first 6kl of water is free to households with property values under R250 000.
The first 50kwh of electricity is free to residents using less than 150kwh per month in Eskom reticulated areas. The first 65kwh of electricity is free to residents using less than 150kwh per month in eThekwini reticulated areas.
The first 6kl of effluent disposal is exempt for all properties with values under R250 000. In addition, a free basic service is also available to indigent consumer units with VIP’s, urine diversion toilets and in informal settlements serviced by means of a toilet/ablution block within 200 metres.
Residential properties valued up to R250 000 are exempt from the domestic refuse removal tariff. In addition, a free basic refuse removal service is also available to indigent residents living in rural and informal settlements.
Breaking down the budget:
ETHEKWINI Mayor, Zandile Gumede described her first budget as a “well balanced budget that addresses the triple threat of poverty, unemployment and inequality.”
Gumede said the budget also took into account building business confidence in terms of retaining and expanding existing businesses and attracting new investors to help grow the rates base.
The R45-billion draft budget will be open for public participation at regional budget hearings which are due to be held during the months of April and May. Details of when and where the meetings have been scheduled will be published in due time.
The Mayor said the budget had been developed to be balanced, realistic, sustainable, cost reflective, affordable and taking into account the current economic climate.
The 2017/18 draft budget comprises of a capital budget of R7.5 billion and an operational budget of R37.5 billion (increased from R33.1 billion in 2016/17 financial year) which funds the continued provision of services provided by the Municipality.
The growth of the operating budget is mainly due to the cost of addressing service delivery backlogs, the cost of bulk purchases of water and electricity, repairs and maintenance of infrastructure, the impact of capital spending on operating expenditure and employee related costs as a result of filling vacancies and the provision for salary increases.
The main drivers of the operating budget are attributed to:
• Water Services: R6.5 billion, increase of R685 million (11.7%) – Provided to approximately 956 000 consumers via 327 storage facilities, 98 pumps stations and five water purification works.
• Cleansing and Solid Waste: R2.1 billion, increase of R72 million (10.5%) – A refuse removal service is provided once a week to over 956 000 households, both formal and informal. Approximately 81.3 million refuse bags are distributed and over 426 000 tons of refuse is removed annually.
• Sanitation: R1.9 billion, increase of R152 million (8.4%) – The service relates to the collection and treatment of waste water produced in the city. Approximately 505 000 KL of effluent flows into the treatment works daily.
• Electricity Service: R13.4 billion, increase of 1.8 billion (16.9%) – Electricity services are provided to over 752 000 customers within the city and surrounding areas.
• Engineering Services: R2.0 billion, increase of 30.4 million (1.6%) – The unit provides engineering, buildings and built environmental infrastructure, surveying and land information services.
• Community and Emergency Services: R3.2 billion, increase of R113 million – For the operation and maintenance of a range of facilities which include 336 soccer fields, 163 community halls, 141 parks, 57 cemeteries, 96 libraries, 16 museums and 52 swimming pools. The unit also maintains 260 000 ha of verges in the municipal area.
Budget addresses unemployment:
Provisions in this medium term budget support government’s commitment to address unemployment and create job opportunities. In doing so:
• 1 250 caretakers are employed at ablution facilities with a further 50 to be employed as further ablution facilities are completed.
• 943 plumbing contractors are employed on a rotational basis to undertake water related services. Additional plumbers are being considered to improve turnaround time.
• 366 community based contractors employ about 1 770 people for refuse removal services.
• 31 graduate engineers are employed under the Water mentorship program.
• 140 community based contractors are utilized in the roll out of rural water and sanitation projects.
• 753 people are employed by Durban Solid Waste through the Extended Public Works Programme grant.
• A further 23 484 work opportunities are expected to be created through the R66.7 million grant subsidized by National Treasury.
• R93 million has been allocated to the Zibambele Poverty Alleviation programme creating over 6 500 jobs.
• R21 million has been allocated to Sihlanvimvelo stream cleaning creating over 500 jobs.
