Bleak outlook for Ilembe’s coffers
"Council needs to tread carefully on expenditure. The budget does not accommodate nearly enough for what needs to be done in the process plan."
The Ilembe municipality 2016/2017 budget presented at a special council meeting on September 1, suggested a bleak outlook of the municipality’s finances which could be tough on service delivery over the next five years.
The draft budget was discussed in line with the municipality’s five year integrated development plan and showed that the total amount of revenue generated by the municipality after deductions is not nearly enough to cover service delivery.
Ilembe’s total revenue is R589 million. Of that amount, R209 million is generated through grant funding while internal income generated from the municipality is only R25 million.
Ilembe’s provision for bad debt compared to its revenue is at a high of R55.7 million while employee salaries are reflected as R178 million.
This leaves the municipality with R355 million split between service delivery and smaller expenses such as maintenance. Service delivery is estimated at R347 million.
Speaking at the council meeting, Ilembe municipal manager Nonhlanhla Gamede said the budget was concerning.
“Overall our finances are not looking good,” said Gamede.
Drought, the billing system and aging infrastructure were blamed for the deteriorating budget.
Democratic Alliance Ward 22 Councillor Malcolm Hubner criticised the municipality for poor planning.
“There were certain areas like Stanger and Stanger Manor that did not have water restrictions. This year the effects showed when the upper course areas were left without water.
“Ilembe municipality hired 14 private water tankers to deliver water to the houses. This cost the municipality R82 million and saw them digging into their reserves. Typically, the municipality should have three months worth of funds left in the reserves,” said Hubner.
DA exco member, Cllr Madhun Sobram Sing cautioned council to budget wisely.
“Council needs to tread carefully on expenditure. The budget does not accommodate nearly enough for what needs to be done in the process plan.”
The plan includes working on youth unemployment, waste management, ocean economy, climate change and the coordination of human settlements, bulk infrastructure and roll out of low income housing.
Hubner explained that projects highlighted in the plan could be put on hold if the budget does not accommodate for them.
“If there is no budget, service delivery will suffer. People could see an increase in rates.”
Ilembe municipality’s media liaison, Khululiwe Makhaye said the municipality’s finance has improved since last year.
“We have held back on filling certain vacancies and our employee related costs have dropped. The drought expenditure was funded from monies received from the water and sanitations department as well as internally generated funds.”
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