Passing a prudent and just budget is an important step in solving the challenges that residents of the City of Ekurhuleni face.
This is according to MMC for Finance and Economic Development Fanyana Nkosi, in his presentation of the 2022 budget speech today (May 25), which was passed by council.
Nkosi said the day is poignant for many reasons, including that it is the commemoration of Africa Day (two decades after the establishment of the African Union) and it is done in the run-up to Youth Month.
“Youth must know our multi-party coalition government budget prioritises intergenerational equity, meaning that our youth won’t be the future victims of irresponsible spending today,” he said.
“Many of our students will have successfully progressed their schooling despite the pandemic-related disruptions of the last two years. We need to draw inspiration from their perseverance, for the economic outlook indicates that we could face many disruptions.
“For our local economic recovery, we will leverage the City of Ekurhuleni’s strong, established manufacturing, aviation, aeronautic and logistics base, together with its large cluster of industrial anchor tenants and transportation capability centred around air travel, freight movement, and transport corridors.
“For this purpose, we have resolved in our mayoral strategic session in March that there should be a review of the City’s growth and development strategy 2055 and economic development plans.
“We will demonstrate a commitment to the creation of a conducive environment that enables regional economic development, competitiveness and inclusive growth. In this regard, our sights are set on these five-year economic development targets.”
He said this includes:
• R50bn investments attracted and secured from Airport City, Aerotropolis, special economic zone, strategic urban developments and industrial cluster development proclamations, development investment attraction, facilitation and retention.
• 2 500 SMMES and cooperatives development and R1bn ‘value of City’ procurement opportunities awarded for township economy development, community enterprise development and empowerment and business regulation.
• R125m revenue generated from leasing of township hubs, business licences and permits.
• R200m revenue generation from Ekurhuleni fresh produce market operations, facilities and municipal farm release.
• 70 000 work opportunities generated in the regional economy through the implementation of EPWP, PEP and private sector jobs initiatives.
Tariff increases
“Through a public participating process and budget tips campaign conducted last month, the people of Ekurhuleni, directed us to, among others, fix the state of our roads, speedily deliver housing, put an end to water interruptions and, most of all, drastically reduce power outages,” Nkosi said.
“Without the levying of tariffs, any municipality will not be able to render basic municipal services that it is constitutionally obliged to provide.
“In levying tariffs, the city was mindful to strike a balance between affordability to consumers and financial sustainability of the city.”
The following tariff increases are proposed:
• There will be no increase in assessment rates for any categories of properties. This is to shield ratepayers from increases associated with the new valuation roll implemented from July 1, 2021. The deadline for the objection and appeal process was April 29. The Valuation Appeal Board will commence in August.
• Sundry tariffs increases are capped at 4.8% in line with the CPI rate. This is somewhat below the likely consumer price inflation increases for the next 12 to 24 months.
• Refuse removal tariff increase is proposed at 7.0%. Waste management services, with the exception of landfills, are transport and labour-intensive operations and are sensitive to the substantial and constant increases in the price of oils and lubricants, fuels, repairs and maintenance of the fleet and labour costs. Although this service is within the control of the City, there are input costs that are outside our control.
The metro has limited power to control increases for services such as water and sanitation and electricity that relies on bulk service procurement from external utilities (Rand Water and Eskom).
• Electricity tariff increases are proposed at 9,61%.
• The water and sanitation tariff increases are proposed at 11%.
“Around 62% of the city’s budget revenue of R48bn for 2022/23 is projected to come from electricity, water, sanitation and refuse collection charges.
“Despite the poor state of our roads, these are also the service delivery areas in which residents and ratepayers have been the most dissatisfied for years. As a result, we have resolved that more than R1.6bn or 63% of our repairs and maintenance budget will go to the trading services departments for the 2022/23 financial year,” said Nkosi.
Relief measures
The city is providing relief to the registered indigent households amounting to R4.5bn.
A household is deemed indigent if it resides in a property worth R250 000 or less. The social package for indigent relief consists of:
• 100% rebates on assessment rates
• Free refuse removal
• 50kwh of free electricity per month
• 6kl of water and sewerage per month
• Free indigent burial to registered and deemed indigents
• Special rates on emergency services such as ambulance and fire-fighting
Debt rehabilitation incentive
This will comprise a 50% write-off of debt in excess of one year on the date of approval of the application – inclusive of rates, service charges, interest and other costs.
The balance of the account on the date of application approval, excluding the current account and after the 50% write-off, will be placed in a consolidated arrangement account to be written off incrementally over a three-year period.
However, this will be on condition that all scheme provisions are being complied with during that timeframe.
The scheme will be available to qualifying applicants from 1 July 2022 until 31 March 2023.
Business and residential customers who keep their accounts up to date for six months will receive a 2% rebate credit against their accounts in the seventh month.
Energy
Capital expenditure on energy will increase at a much quicker rate than maintenance and repair spending, with a 39% increase (R558m) for 2022/23 and at double the rate of inflation for the other two years.
The repairs and maintenance expenditure allocation is R922m for 2022/23, which is a 90/10 split between provision for electrical network repairs (inclusive of substations, transformers and meter boxes) and streetlights.
The maintenance and repair allocations for the next two years will also exceed inflation. The idea is to ensure the replacing of infrastructure at the rate of at least 10km of cabling per annum and ensure the refurbishment of circuits and equipment.
Supply from Eskom will be supplemented by 47 renewable independent power producers, who will come on board from 2024.
Potholes
In the 2022/23 financial year, R370m is allocated to the roads and stormwater department for repairs and maintenance, including the patching of potholes.
An additional R283m is allocated for asset renewal.
“Our objective is to review the allocation for pothole repair with the January 2023 adjustment budget. As we are aware, the city will have to work hard towards a minimum 3% equivalent of installed infrastructure value per annum provided for maintenance. All avenues are currently being pursued,” Nkosi said.
“One of these was to ask National Treasury for a review of the allocation the city receives for road maintenance from the fuel levy. The amount received in comparison to other cities is not in proportion to the road network that the city is maintaining.
“On the issue of potholes, the multi-party coalition government welcomed offers of public-private partnerships. Our department is also working with a social enterprise to brand our own pothole repair unit that would offer sponsorship and operating partnership opportunities to the private sector.”
Public transport
In the coming financial year, the metro will support Phase 1A of the Harambee Bus Rapid Transport network, running from Thembisa via Kempton Park to OR Tambo International Airport.
“We will also support extensions of the network in Thembisa and the service from Kempton Park/Rhodesfield to Boksburg (Phase 1B). The condition of various public transport facilities is assessed and the Germiston bus depot, the Germiston intermodal facility and the Somhlolo public transport facility will all be refurbished in the coming financial year.
“To assist, the transport planning and provision department will receive a capital budget of R303m, and repairs and fleet maintenance has an allocation of R170m,” Nkosi said.
Safety and security
A key priority will be the funding of additional police deployment, equipment resourcing and the establishment of K9 units.
Currently, 480 EMPD recruits will finish their basic training at the end of June and the EMPD will also supplement its human capital by enrolling traffic wardens into the police academy next month to be trained as EMPD officers.
The city’s security services are operated on a hybrid model of in-house and outsourced provision. The metro is considering various avenues to insource all of the security services.
With regard to Disaster and Emergency Management Services, the construction of these projects are planned:
• The Katlehong Fire Station (R20m allocated for completion in the next financial year).
• The Isando/Elandsfontein Fire Station in Klopper Park (R5m has been allocated in the next financial year to ensure its completion in 2023/24).
• The Etwatwa Fire Station upgrade (R5m is allocated in the next financial year).
Housing
The metro will fast-track all mega projects while at the same time ensuring that residents receive their title deeds.
The Department of Human Settlements has received a gazetted amount of R126.2m from Gauteng Provincial Department of Human Settlements for the 2022/23 financial year to deliver 725 housing units in Alliance Ext 1, Payneville Ext 1, Mayfield Ext 32 and 34 and Leeuwpoort.
In terms of the department’s capital budget, the allocation is R582m will be:
• Leeuwpoort mega project (R25m), due to deliver designs and construction of engineering services for Sunward Park portions of the development, as well as remaining engineering services in Parkdene around the Cinderella Hostel to unlock the housing development. The project is expected to be completed in the 2023/24 financial year.
• R9.7m is budgeted for the completion of 259 planned serviced stands in Balmoral Ext 4.
•R15.3m is budgeted for the completion of 144 social housing units in Portion 62 Airport Park Ext.
Health services
Allocations to the health and social development department will be strengthened by the R190m grant funding for the 2022/23 financial year secured from the Gauteng provincial government.
These funds are for primary healthcare, as well as the city’s AIDS Unit.
Arts and culture
The Department of Sport, Heritage, Recreation, Arts and Culture was awarded just under R21-m in grants to be spent on our city’s libraries, which will benefit the youth in particular.
Back to Basics
Nkosi reiterated the metro reaffirms its commitment to breathe life into the theme outlined by the executive mayor for 2022 in her State of the City Address, namely back to basics for service delivery and inclusive growth.
The central tenets of this approach are to refocus the priorities of the city closely on better quality service delivery along the lines of the powers and functions of municipalities as set out in the Constitution.
They will also not pursue vanity projects and duplicate programmes that are either the responsibility of other spheres of government or through parallel initiatives within the municipality.
The nine back to basic priorities that draw heavily on the multi-party coalition agreement are:
1. Giving residents back their power by helping to reduce their vulnerability to load-shedding and enhance access to reliable, affordable, and sustainable electricity.
2. Ensuring that every community has access to reliable, clean, running water, that is safe to drink and to prepare food, and also that the metro modernises water management and prevents untreated wastewater from contaminating the environment.
3. Investing in safe, reliable, affordable public transport, well-maintained roads and infrastructure renewal with measures to safeguard infrastructure from vandalism and theft.
4. Ensuring there is a hygienic environment to live and play, delivered through the effective waste collection and waste disposal, working landfill sites, as well as the implementation of recycling programmes through reclaiming of untidy public parks and cemeteries.
5. Promoting housing options, ensuring more people own their homes by receiving valid title deeds.
6. Being tough on crime and tougher on the causes of crime by investing in localised law enforcement.
7. Minimising the risks that lead to poor health, responding effectively to health emergencies and promoting the resilience of communities through effective disaster risk management.
8. Regaining the financial stability of the city by ensuring good governance.
9. Using back to basics service delivery as a foundation to bring in investment and jobs to the local economy by making it easier to do business within the municipality.
“It is early days, but despite the economic headwinds, we have already made some headway with the financial recovery of the city,” Nkosi said.
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