PART 2 SUPPORTING DOCUMENTATION
2.6 OVERVIEW OF BUDGET FUNDING
2.6.2. Medium-term outlook: Capital expenditure
The following is a breakdown of the funding composition of the 2019/20 medium-term capital programme.
Org Bud Budget Budget Budget
Funding source 2019/20 2020/21 2021/22 2022/23
R 000 R 000 R 000 R 000
Loan funding 2 988 369 2 620 591 2 200 000 3 000 000 CRR and surplus cash 1 578 123 3 179 205 3 800 000 3 085 336 Grants and contributions 3 187 968 2 619 226 2 655 323 3 137 882
Total 7 754 460 8 419 022 8 655 323 9 223 218
The capital budget of the City projects a spending plan of approximately R26.3 billion over the next three-year period. The capital budget for the 2020/21 financial year amounts to approximately R8.4 billion.
Approximately R5.8 billion of the capital budget will be funded by the City and R2.6 billion from grants and public contributions.
Funding Sources for 2020/21
COJ - Loans 31.1%
COJ - Cash 37.8%
National 4.5%
USDG/
ISUPG 22.0%
Other 4.6%
• R2.6 billion of capital will be funded from loans.
• R3.2 billion of capital will be funded through cash surpluses.
• R381.3 million will be funded from grants received from National (PTIS – R244.2 million, NDPG – R62.4 million and Integrated City Development Grant – R74.8 million).
• R1.9 billion will be funded through the Urban Settlement Development Grant (USDG).
• R389.6 million will be funded from other sources (public and bulk service contributions).
96
Table SA15: Investment particulars by type
2016/17 2017/18 2018/19 Audited
Outcome
Audited Outcome
Audited Outcome
Original Budget
Adjusted Budget
Budget Year 2020/21
Budget Year +1 2021/22
Budget Year +2 2022/23 R thousand
Parent municipality
Deposits - Bank 3 095 910 2 239 861 5 339 214 3 992 598 3 992 598 4 472 598 5 052 598 6 232 598 Guaranteed Endow ment Policies (sinking) 2 976 932–– 2 230 186–– 2 677 284–– 2 800 961–– 1 278 440–– 2 188 784–– 1 022 524–– 855 073––
Consolidated total: 6 072 842 4 470 047 8 016 498 6 793 559 5 271 038 6 661 382 6 075 122 7 087 671 Investment type
Current Year 2019/20 2020/21 Medium Term Revenue &
Expenditure Framework
Table SA16: Investment particulars by maturity
Investments by Maturity Period of
Investment Interest Rate ᶟ Opening balance Interest to be
realised Closing Balance Name of institution & investment ID Yrs/Months
Parent municipality
RMB Fix ed 7.20% 04 July 2019 – – 450 000 ABSA Fix ed 0.0735 12 July 2019 – – 500 000 NEDBANK Fix ed 0.0765 26 July 2019 – – 500 000 INVESTEC Fix ed 8.10%-8.20% 24 Jul 19 - 26 Feb 20 96 022 – 171 200
RMB 0.067 CALL 1 100 – 290 370
ABSA 0.068 CALL 866 010 – 218 982
NEDBANK 0.067 CALL 131 596 – 402 023
INVESTEC 0.067 CALL 1 718 – 387 139
SBSA 0.067 CALL 104 027 – 599 045
DEUTCHE BANK 0.0655 CALL 1 000 – 1 000
CITIBANK 0.0635 CALL 1 499 – 1 582
TOTAL INVESTMENTS AND INTEREST 1 202 972 – 3 521 341 Type of Investment Expiry date of
investment
Table SA17: Borrowing
Borrowing - Categorised by type 2016/17 2017/18 2018/19
R thousand Audited
Outcom e
Audited Outcom e
Audited Outcom e
Original Budget
Adjusted Budget
Budget Year 2020/21
Budget Year +1 2021/22
Budget Year +2 2022/23 Parent m unicipality
Annuity and Bullet Loans 3 750 000 2 750 000 2 750 000
Long-Term Loans (non-annuity ) 8 604 896 11 140 329 13 083 343
Financial Leases 205 327 162 835 183 374
Marketable Bonds 7 756 753 6 016 000 6 016 000 22 479 406 22 248 793 23 835 062 22 823 081 23 585 410
Total Borrowing 20 316 976 20 069 164 22 032 717 22 479 406 22 248 793 23 835 062 22 823 081 23 585 410
Current Year 2019/20 2020/21 Medium Term Revenue &
Expenditure Fram ework
97
Table SA18: Transfers and grant receipts
Description 2016/17 2017/18 2018/19
R thousand Audited
Outcome
Audited Outcome
Audited Outcome
Original Budget
Adjusted Budget
Budget Year 2020/21
Budget Year +1 2021/22
Budget Year +2 2022/23 RECEIPTS:
Operating Transfers and Grants
National Government: 6 102 644 6 663 742 7 458 755 8 545 300 8 538 214 9 711 698 10 701 428 11 177 002 Local Gov ernment Equitable Share 3 182 318 3 666 637 4 229 919 4 689 158 4 689 158 5 183 056 5 744 050 6 316 631 National : Fuel Lev y 2 595 595 2 710 941 2 942 282 3 273 169 3 273 169 3 683 458 4 080 855 4 422 921 National : Ex panded Public Works Programme 67 613 19 786 34 089 23 955 23 955 19 819 – – National : Infrastructure Skills Dev elopment Grant – – – 7 200 6 200 7 000 7 500 7 500 National : Local Gov ernment Financial Management Grant 1 050 1 050 – 1 000 1 000 1 000 1 000 1 000 National : Public Transport Netw ork Operations Grant 256 068 211 990 252 465 550 818 534 732 807 365 857 023 416 950 National : Energy Efficiency and Demand-side – – – – 10 000 10 000 11 000 12 000 Other Grants – 53 338 – – – – – – Provincial Government: 733 187 640 272 512 309 486 990 597 217 449 538 474 535 498 262
Prov incial : Disaster and Emergency Serv ices 117 321 123 187 130 373 55 156 124 102 – – – Prov incial : Health 136 185 143 367 151 726 161 327 161 327 170 734 180 244 189 256 Prov incial : Housing 345 513 248 785 116 728 245 507 286 788 254 304 268 291 281 706 Prov incial : Libraries, Archiv es and Museums 26 030 17 761 17 600 25 000 25 000 24 500 26 000 27 300 Prov incial: Transport 4 738 – – – – – – – Prov incial Grants 103 400 107 172 95 882 – – – – – Total Operating Transfers and Grants 6 835 831 7 304 014 7 971 064 9 037 510 9 144 305 10 176 125 11 187 114 11 686 973 Capital Transfers and Grants
National Government: 2 628 842 2 370 396 2 634 716 2 745 480 2 721 970 2 229 600 2 195 395 2 705 514 Public Transport Netw ork Grant: Capex 808 808 685 585 660 256 636 700 636 700 244 153 201 939 687 892 Urban Settlement Dev elopment Grant 1 009 837 1 577 196 1 847 914 1 968 023 1 974 346 1 478 287 1 859 474 1 889 397 Intergrated National Electrification Program 40 000 – – – – – – – Neighbourhood Dev elopment Partnership Grant 60 730 42 563 35 510 65 000 65 000 62 406 60 000 50 000 Intergrated City Dev elopment Grant 64 746 65 052 91 036 75 757 45 924 74 754 73 982 78 225 Informal Settlement Upgrading Grant – – – – – 370 000 – – Department of Energy Electrical infrastructure projects for priority mix ed housing dev elopments 546 066 – – – – – – – The Shared Industrial Production Facility (SIPF) in Alex andra 5 000 – – – – – – – Joshco: Social Housing Regulatory Authority 93 655 – – – – – – – Provincial Government: – 107 866 137 800 – – – – – Other capital transfers/grants [insert description] – 107 866 137 800 – – – – – Total Capital Transfers and Grants 2 628 842 2 478 262 2 772 516 2 745 480 2 721 970 2 229 600 2 195 395 2 705 514 TOTAL RECEIPTS OF TRANSFERS & GRANTS 9 464 673 9 782 276 10 743 580 11 782 990 11 866 275 12 405 725 13 382 509 14 392 487 Current Year 2019/20 2020/21 Medium Term Revenue &
Expenditure Framework
98
Table SA21: Transfers and grants made by the municipality
Description 2016/17 2017/18 2018/19
R thousand Audited
Outcome
Audited Outcome
Audited Outcome
Original Budget
Adjusted Budget
Budget Year 2020/21
Budget Year +1 2021/22
Budget Year +2 2022/23 SPCA 6 565 6 977 7 343 7 969 7 747 8 165 8 590 9 092 Housing Top Structures 339 149 247 645 118 238 245 507 286 788 254 304 268 291 281 706 Grants and Subsidies: Other – 11 184 – 12 693 1 000 8 391 8 827 8 747 Bike sharing 2 000 499 4 400 35 857 1 000 5 270 5 544 19 380 Subsidies: Other 3 617 4 964 5 000 5 000 5 000 5 000 5 260 5 523 Marks Park 1 444 1 525 1 607 1 694 1 694 1 794 1 887 1 981 Ekhaya Cardiac Gym – – 60 – 63 66 69 – NGO's (Various) 4 010 7 051 8 161 9 656 9 665 10 188 10 718 11 254 Subsidies : Other 21 390 – – – – – – – Mayoral Charity Golf - Soweto Country Club – – – – 780 – – – Wits Book Prize (Best Phd Student) 2 2 2 2 2 2 2 2 Joburg Ballet 8 000 8 873 9 587 10 645 9 483 11 273 11 859 12 452 Bidding Fund & Bid Support – – 4 466 4 444 900 3 162 3 327 4 015 Taxi Allowances – – – – 41 945 – – – Orchestra – – 10 000 – 11 162 10 590 11 141 11 698 The South African Planning Institute – 10 466 10 000 10 000 – – – – Taxi Compensation – – – – – 307 943 322 913 325 500 Other 114 570 (9 851) 1 405 104 081 – – – – TOTAL TRANSFERS AND GRANTS 500 747 289 336 180 269 447 548 377 229 626 148 658 428 691 350
Current Year 2019/20 2020/21 Medium Term Revenue &
Expenditure Framework
99
Table A7: Consolidated Budgeted Cash Flows
Description 2016/17 2017/18 2018/19
R thousand Audited
Outcom e
Audited Outcom e
Audited Outcom e
Original Budget
Adjusted Budget
Budget Year 2020/21
Budget Year +1 2021/22
Budget Year +2 2022/23 CASH FLOW FROM OPERATING ACTIVITIES
Receipts
Property rates 7 440 040 8 479 833 10 968 874 11 493 534 11 493 534 12 493 618 13 201 518 13 840 001 Serv ice charges 21 785 771 22 467 296 24 631 385 28 483 317 28 328 865 29 888 490 30 682 063 32 807 534 Other rev enue 1 110 475 1 665 688 1 868 838 3 395 353 3 412 550 3 848 064 4 294 311 4 395 461 Transfers and Subsidies - Operational 6 947 913 7 005 722 8 118 588 9 037 510 9 144 305 10 176 125 11 187 114 11 686 973 Transfers and Subsidies - Capital 2 620 785 2 478 262 2 772 516 2 745 480 2 721 970 2 229 600 2 195 395 2 705 514 Interest 624 146 715 421 839 864 646 285 662 604 699 149 733 635 773 440 Paym ents
Suppliers and employ ees (34 549 366) (35 392 093) (38 139 673) (44 740 237) (45 008 103) (47 612 896) (48 967 799) (51 366 019) Finance charges (2 404 884) (2 525 423) (2 434 266) (2 807 395) (2 807 622) (2 901 623) (3 034 160) (3 182 113) Transfers and Grants – – – (447 548) (377 229) (626 148) (658 428) (691 350) NET CASH FROM/(USED) OPERATING ACTIVITIES 3 574 880 4 894 706 8 626 126 7 806 300 7 570 874 8 194 378 9 633 648 10 969 441 CASH FLOWS FROM INVESTING ACTIVITIES
Receipts
Proceeds on disposal of PPE – – – 498 703 56 215 422 626 494 644 468 820 Decrease (increase) in non-current receiv ables – – – (70 727) (118 524) (124 687) (118 558) (132 053) Decrease (increase) in non-current inv estments 418 092 961 948 (9 350) (1 027 774) (743 668) (60 344) (1 101 740) 977 451 Paym ents
Capital assets (7 100 961) (6 354 940) (7 520 167) (7 754 430) (8 334 678) (8 419 022) (8 655 323) (9 223 218) NET CASH FROM/(USED) INVESTING ACTIVITIES (6 682 869) (5 392 992) (7 529 517) (8 354 228) (9 140 654) (8 181 427) (9 380 977) (7 909 001) CASH FLOWS FROM FINANCING ACTIVITIES
Receipts
Borrow ing long term/refinancing 2 626 001 5 998 386 4 349 726 2 988 369 2 988 369 2 620 591 2 200 000 3 000 000 Increase (decrease) in consumer deposits – – – 531 170 171 173 175 Paym ents
Repay ment of borrow ing (791 867) (6 356 150) (2 346 981) (807 986) (948 039) (1 838 485) (1 034 322) (3 211 981) NET CASH FROM/(USED) FINANCING ACTIVITIES 1 834 134 (357 764) 2 002 745 2 180 913 2 040 500 782 278 1 165 851 (211 806) NET INCREASE/ (DECREASE) IN CASH HELD (1 273 855) (856 050) 3 099 354 1 632 985 470 720 795 229 1 418 522 2 848 634
Cash/cash equiv alents at the y ear begin: 4 369 765 3 095 910 2 239 860 4 291 362 5 339 214 5 809 934 6 605 163 8 023 685 Cash/cash equiv alents at the y ear end: 3 095 910 2 239 860 5 339 214 5 924 346 5 809 934 6 605 163 8 023 685 10 872 319
Current Year 2019/20 2020/21 Medium Term Revenue &
Expenditure Framework
Cash Flow Management
Cash flow management and forecasting is a critical step in determining if the budget is funded over the medium-term. The table below is consistent with international standards of good financial management practice and improves understandability for councilors and management. Some specific features include:
• Clear separation of receipts and payments within each cash flow category;
• Clear separation of capital and operating receipts from government, which also enables cash from
‘Ratepayers and other’ to be provide for as cash inflow based on actual performance. In other words, the actual collection rate of billed revenue; and
• Separation of borrowing and loan repayments (no set-off), to assist with MFMA compliance assessment regarding the use of long-term borrowing (debt).
100