Budget aimed to meet community needs

DESPITE the initial positive note at the State of the City address and eThekwini Mayor Zandile Gumede’s “new day and dawn for the municipality” comment, the inevitable tariff increases could not be avoided in a conservative budget within a slow growth economy.

The positives include eThekwini Municipality has again received an unqualified audit while the two municipal entities, the Inkosi Albert Luthuli International Convention Centre and uShaka Marine World, have both received clean audit outcomes for the 2017/18 financial year; Durban was named by Brand SA as the City with the most improved image and rated the most liveable city in South Africa.

StatsSA reported that the City’s quarterly unemployment rate decreased to 21.9 per cent during the fourth quarter of 2017 after 23.3 per cent in the third quarter with an estimated 1.9 million people living below the poverty line in 2017 in the eThekwini Metropolitan area.“We need to work harder to address this challenge,” she said

Mayor Gumede said there was a concerted effort to clean up the inner city including removing all illegal signs and billboards and clearing crime and grime.

BUDGET HEARING ADJUSTMENTS Budget presentations were made at the 8 main regions of the municipality as well as to other organisations including civic and religious organisations, Amakhosi and the Durban Chamber of Commerce and Industry (DCCI). #EthekwiniBudget18 @GumedeZandileRT

— eThekwini Municipality (@eThekwiniM) May 31, 2018

“We are going to address the issue of problem buildings in the City and turn them into social housing, affordable and gap housing as well as students’ residences, business or for commercial usage and hotels.”

She said they will clamp down on those “stealing from the poor”. “When we deal with corruption, we will name and shame all those who steal from the poor.

We are prepared to fight corruption whenever it raises its head.

“Anyone who transgresses good business principles in the City will be dealt with using the full force of the law.”

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Mayor Gumede said CIIU has completed 326 investigations over the past financial year.

“A new Disciplinary Committee and a Blacklisting Committee has also been formed to deter fraud and corruption. Already we have blacklisted 42 companies who are prevented from doing business with the City for five years.”

Budget

The Full Council meeting also saw the tabling and adoption of the 2018/19 budget.

The total budget is R45.8 billion comprising an operating budget of R38.7 billion and a capital budget of R7.1 billion.

The dreaded tariff increases are:

• Property rates will increase by 6.9 per cent, electricity by 6.84 per cent while Eskom increases by 7.32 per cent.

• Water will increase by 15 per cent for domestic and 15.5 per cent for business while the Umgeni Water Board increase is set as 13.7 per cent.

• Refuse and sanitation will increase by 9.9 per cent.

Who is exempt?

Residential properties valued up to R230 000 will be exempt from paying rates.

All other properties valued above R230 000, no rates will be charged on the first R120 000.

For pensioners, child-headed households, disability grantees and the medically boarded, in addition to the above exemptions, a rebate not exceeding R4 364 has been approved.

The first 6kl of water is free to households with property value under R250 000 and 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.

However, it is interesting to note that National Treasury said of all the big metros, eThekwini has the lowest monthly bill for middle-income households.

Driving costs

Mayor Gudemede said the main driving costs relate to bulk purchases of water and electricity which make up R11.2 billion or 32.9 per cent of the operating budget while staff related costs of R10.4 billion or 30.5 per cent and contracted services which make up R5.08 billion or 14.9 per cent of the operating budget.

These three costs make up almost 80 per cent of the budget.

“Unfortunately, we have little control over the bulk purchase costs and salary related costs as these are determined outside of the municipality. NERSA and

Eskom determine the electricity increase, Umgeni Water Board determines the water increase and the South African Local Government Association together with the labour unions determine the salary increase,” she said.

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Austerity measures

Mayor Gumede said the municipality is committed to reducing costs and has implemented numerous austerity measures including:

• Utilisation of vehicles being closely monitored. Under-utilised vehicles being removed and pooled. The unauthorised use of vehicles is also being monitored

• Cost benefit analysis being done in terms of lease versus purchase, as well as repair versus replacement

• Fuel, overtime, security costs, catering and consultant costs are some of the costs that are being closely monitored

RMS Billing System – we have a challenge with people getting higher bills and unable to pay. We are really concerned as a result, we are investigating the system and also going out and having roadshows over weekends. #EthekwiniBudget18 @GumedeZandileRT

— eThekwini Municipality (@eThekwiniM) May 31, 2018

Revenue

The total revenue is R38.7 billion and the below four sources of revenue make up 88.4 per cent of the total revenue and are:

• R13.1 billion or 34 per cent from electricity

• R9.2 billion or 24 per cent from grants and subsidies

• R7.4 billion or 19 per cent from property rates

• R4.4 billion or 11.4 per cent from water

R10m for disasters

Councillor of the Human Resources and Governance Committee, Barbara Fortein said the Governance and Human Resources Committee fully supports the 2018/19 financial year’s budget.

Deputy Mayor Fawzia Peer, who is also the chairperson of the Security and Emergency Services, commended the Mayor for a balanced budget which speaks to the needs of the community.

She said R10 million would be injected into the Disaster Management in the 2018/19 financial year which would see the staff component increase by 30 per cent.

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