The draft 2012/2017 Integrated Development Plan (IDP) and draft budget for 2012/2013 was approved by the Kouga Council at a meeting in Jeffreys Bay yesterday.
The draft operating budget amounts to R517-million, which is R48,5-million or 10% more than the 2011/2012 adjustment budget of R468,5-million. The draft capital budget for 2012/2013 is R35-million, up R6,5-million from the adjusted 2011/2012 capital budget.
The new financial year starts in July 2012.
Kouga Executive Mayor Booi Koerat was applauded by the Council for giving a frank account of the municipality’s financial position before tabling the draft budget.
“When we came into Council last year, I don’t believe any of us had an idea of the dire financial situation facing the municipality. There were serious cash-flow problems due to, among other things, declining collection rates and historic expenditure patterns,” he reported to Council.
“Over the past ten months we have started doing things smarter. A full financial recovery plan is in place and we are already seeing positive results.”
The Mayor said that debtors owing the municipality amounted to R110-million but that improved debt collection efforts have seen this amount decreasing monthly. The municipality has also been able to reduce its creditors by R20-million over the past year.
He said a focus of the budgeting process had been on keeping tariff and property rate increases as affordable as possible, despite both Eskom and the Nelson Mandela Bay Metro pushing up the price the municipality will be paying for electricity and water significantly.
The average tariff increases are as follows:
- Property rates: 5,6%
- Refuse removal: 6%
- Water: 12%
- Sanitation: 9%
- Electricity: 11%
The Mayor said another focus had been reducing staff-related costs so that more money could be put towards service delivery and maintenance.
“The draft budget for staff costs is R189,8-million or 37% of the budget. R40,8-million, or 8% of the total, has been budgeted for maintenance. While this budget brings us closer to our target, reducing staff costs will be an ongoing process,” he said.
The Council will workshop the draft budget in April. Public meetings will also be held. Comments received will be considered for the final budget to be tabled to Council.
The break-down per source of the draft R517-million operating budget is:
- Assessment rates: R130,4m
- Electricity: R186,9m
- Water: R40,4m
- Sanitation: R35,5m
- Refuse: R25,5m
- Grants and subsidies: R54,9m
- Other income: R43,4m
Operating expenditure will be split as follows:
- Staff-related costs: R189,8m
- Electricity purchases: R128,9m
- Water purchases: R16,5m
- General (operational) expenses: R141,1m
- Repairs and Maintenance: R40,8m
Political observers say that on the whole it was a most positive meeting with a good spirit of co-operation. DA Clr DA Cawood complimented the Mayor on his honest report-back in his speech.
Political observers say that on the whole it was a most positive meeting with a good spirit of co-operation. DA Clr DA Cawood complimented the Mayor on his honest report-back speech.
Clr Nico Botha questioned the 95% collection rate (that means that the municipality has to ensure people pay their bills) . He expressed satisfaction though with the monies collected for maintenance.
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