DESPITE fierce expostulation from the opposition, the Kouga Council approved the municipality’s operating and capital budgets for the new financial year, starting onJuly 1, at a meeting last Thursday.
Ward 7 Councillor Chico Februarie, who opposed the budget on various occasions and threatened to obtain legal advice, says, “The budget and IDP are not a true reflection of the vital needs of community members in less fortunate wards.
“It does not stand for the poorest of the poor.”
Executive Mayor Horatio Hendricks says every effort had been made to ensure that the budget was “pro poor and fully funded”.
According to the approved budget, Kouga’s total operating revenue for the new financial year will increase to R836,693 million. This is 10,06% or R76,46 million more compared to the 2018/19 adjustments budget.
Hendricks says the operating budget was dependent on the municipality maintaining a collection rate of 96%.
“It will be funded from various sources, the major contributors being electricity (33,11%), property rates (23,51%), operating grants and subsidies (15,91%), water (9,1%) and refuse (6,42%).
The total operating expenditure for the 2019/2020 financial year amounts to R897,137 million, with the major operating expenditure items being employee-related costs (32,43%), bulk electricity purchases (25,9%) and depreciation (9,49%).
“The staff budget provides for a general increase of 6,5% in line with the approved Salary and Wage Collective Agreement. It is encouraging to see that employee-related costs are well below the 35% guideline issued by National Treasury,” says the Mayor.
The budget for repairs and maintenance amounts to R43,692 million, of which 66,27% will be spent on infrastructure assets, including, roads and stormwater, electricity, water, sanitation, solid waste, community, sport and recreational facilities.
In order to fund the operating budget, the following increases in property rates and service charges were approved:
- Property rates: 6,5%
- Water: 7,5%
- Sanitation: 7%
- Refuse: 7%
- EMF: 0%
- Electricity 14,26%.
The Mayor says the municipality had kept tariff increases as low as possible.
“In some instances, especially when it comes to electricity, this proved to be a challenge, with NERSA giving Eskom the go-ahead to increase its bulk tariff to municipalities by 15,63% from 1 July 2019.”
Also approved by Council is the capital budget, amounting to R93,11 million.
“This is a sharp decrease of 55,56% or R116,405 million compared to the 2018/19 adjustments budget,” Hendricks said.
“This decrease is due to the Water Services Infrastructure Grant which the municipality received in the 2018/2019 financial year for drought-intervention projects.”
He says the capital budget once again reflected the strides Kouga has made to strengthen its financial position, with 45,1% of R41,994 million of the budget being funded from the municipality’s own income.
The remaining 54,9% or R51,117 million will be funded through government grants and subsidies.
