It is my privilege as Mayor, to present to you an overview of the compilation and implementation of the Medium Term Revenue & Expenditure Framework (MTREF) budget for 2018/2019.
In terms of the Municipal Financial Management Act (MFMA), the municipality must table a draft budget to the public for consideration and comment before a final budget can be tabled to Council for approval. Due processes were followed and all inputs and comments were considered in compiling the proposed budget.
Honourable Speaker and residents, the tabling of the MTREF budget occurs within the context of a changing and challenging fiscal and economic context. I am concerned about the Council’s diminishing revenue resources against the fast-growing indigent population. The affordability of municipalities is becoming most challenging as the current inflation rates does not correspond with the increases experienced within a municipal environment.
Although the compilation of this year’s budget was difficult and complex, the Integrated Development Plan and the municipal Long Term Financial Plan provides direction to what can be budgeted for. The spending of funds from this budget must be in line with the National Development Plan and Provincial strategic goals. We as a municipality need to endeavour to strategically and proactively manage sustainability to survive.
Residents cannot afford unrealistic increases and the guideline of a 6% increase in tariffs was applied. Property tax and tariff hikes were considered in a conservative manner and Council forfeited much needed income to accommodate maximum service delivery to the poor. No items were included in the budget that is not a strategic objective of the municipality.
The budget is limited and will have to be managed effectively and efficiently. Innovative plans will have to be executed to ensure necessary service delivery.
Notwithstanding the limited funds, effective maintenance will be performed throughout the municipal area in order to protect Council’s assets and extend its life span.
Allow me to highlight the important aspects of this budget:
The municipality will be partnering with Inter-governmental and other spheres of Government, public entities and state-owner companies in order to implement development within Hessequa.
The shortage of water in the Western Cape is addressed in the budget by way of a 12% increase in water tariff. Additional water infrastructure such as boreholes and a desalination plant will take place in Still Bay and Witsand. The Hessequa Innovation Helix, in collaboration with Stellenbosch University, identified a water desalination project for Witsand. Costs associated with the installation of this project amounted to R9 million, of which the French Treasury indicated that they could finance 50% of the proposed Witsand desalination plant by means of a grant. Hessequa Municipality will be responsible for funding the remaining 50%. Hessequa Municipality has applied for an allocation to the Western Cape Local Government Drought Assistance Fund to receive the 50% funding and this application has been successful.
The cost of compliance to all environmental legislation remains high. The disposal of waste generated by communities and any related cost, is constitutionally mandated to be the responsibility of the municipality. There is currently no other landfill airspace available and the current service points will not be extended. Rural areas and private developments will be levied for waste removal services from 1 July 2018. Residents are urged to lead by example and reduce waste by recycling. Recycling is a necessity to lengthen the life span of our landfill sites. Therefore, I appeal to you to be part of the recycling process.
The indigent register is increasing on a regular basis because of the economic conditions and fiscal constraints. Indigent category A has increased to double the new state pension, and category B’s income threshold increases from R3 500 per month to R3 800 per month.
Municipal indigent subsidy remains unchanged and will continue to provide financial relief to qualifying residents.
Pensioners have many options within the Policy on Property Tax, to reduce the effects of the taxed amount, due to reductions available within different age groups and income levels.
The municipality has adopted its Credit Control and Debt Collection Policy to provide for the expansion of card payment facilities. Card payment facilities will be available at the Traffic Office payment points at Riversdale, Stilbaai, Albertinia and Heidelberg from 1 July 2018 for the payment of REGISTRATION AND LICENSING OF A MOTOR VEHICLE.
The capital budget also highlights the following:
The resurfacing of road in Riversdale and Heidelberg (R8.2 million).
The upgrading of sport facilities in Slangrivier and Melkhoutfontein (R10 million each).
R10 million budgeted for the sewerage system in Riversdale and R3 million for the sewerage system in Gouritsmond.
R4 million is dedicated to a reservoir for Still Bay and R1 million for the upgrading of caravan parks.
Proposed Tariff increases for 2018/19
Vacant Stands 24,0%
ELECTRICITY 6.84% (average)
SUNDRY TARIFFS 6.0% – 8.0%
I am proud of excellent officials and the commitment of councillors who enabled Hessequa Municipality to reach the goal set, in obtaining a fourth clean audit report from the Auditor General, receiving a 3rd place in the National Greenest Municipality Awards in 2017 and embarking on a renewable energy journey to provide Hessequa with a sustainable energy solutions that will provide a reliable and secure supply of electricity into the future.
I would like to take this opportunity to thank the Municipal Manager, the Directors of departments, the CFO and her budget team, for the compilation of the 2018/19 budget.
Thank you to every councillor who assisted with inputs to put this budget before Council today, for final approval.
I would like to conclude with two quotes from Nelson Mandela. “It always seems impossible until it’s done.” and “What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead.”
I thank you,
Mayor Grant Riddles