d) Agricultural properties e) Mining properties
f) Properties owned by an organ of state and used for public service purposes g) Public service infrastructure properties
h) Properties owned by public benefit organisations and used for specified public benefit activities i) Properties used for multiple purposes, subject to section 9
j) Any other category of property as may be determined by the Minister, with the concurrence of the Minister of Finance, by Notice in the Gazette.
In addition to these categories, a municipality may determine additional categories of rate-able property, including vacant land, provided that, with the exception of vacant land, the determination of such property categories does not circumvent the categories of rate-able property above.
Where a municipality can, on good cause, show that there is a need to sub-categorise the above categories, it must apply to the Minister in writing at least 15 months prior to the implementation date.
Section 93B determines that the provisions of section 8 must be applied by a municipality within seven years of the date of commencement of this Act. The City of Tshwane will not implement the section 8 provisions for the 2015/16 financial year.
2.4.3 ASSET MANAGEMENT, INFRASTRUCTURE INVESTMENT AND FUNDING POLICY
Long-term financial planning recognises the effect of long-lived assets (through proper maintenance and timely replacement) on financial sustainability. Section 78(1) of the MFMA requires that the assets and liabilities of the municipality must be managed effectively and that assets must be safeguarded and maintained to the extent necessary. The National Treasury’s MFMA Circular 58 of 14 December 2011 draws particular attention to underspending on repairs and maintenance, which can shorten the life of assets and increase long-term maintenance and refurbishment costs, resulting in the deterioration of service reliability. Provision for depreciation and asset impairment has been informed by the Municipality’s Asset Management Strategy.
2.4.4 ADJUSTMENT BUDGET POLICY
The Adjustment Budget Policy forms part of the Budget Policy. The adjustments budget process is governed by various provisions in the MFMA and aims to instil and establish an increased level of discipline, responsibility and accountability in the financial management practices of municipalities. To ensure that the City continues to deliver on its core mandate and achieves its developmental goals, the mid-year review and adjustment budget process will be used to ensure that underperforming functions are identified and that funds are redirected to performing functions.
2.4.5 SUPPLY CHAIN MANAGEMENT POLICY
The Supply Chain Management Policy was amended and adopted by the Council on 31 July 2013. This policy is currently under review.
2.4.6 BUDGET POLICY
The Budget Policy, which includes the Fund Transfer Policy, aims to empower senior managers with an efficient financial and budgetary amendment and control system to ensure optimum service delivery within the legislative framework of the MFMA and the City’s system of delegations.
The Budget Policy approved by the Council on 29 May 2014 was reviewed and minor amendments were approved by Council in May 2015.
2.4.7 CASH MANAGEMENT AND INVESTMENT POLICY
The City’s strategy towards cash backing of the capital reserves, capital provisions and unspent conditional grants, as well as external borrowing, aims to ensure the City’s sustainability over the medium to longer term. The strategy is informed, amongst others, by the relevant GRAP accounting standards, sections 18 and 19 of the MFMA, and National Treasury Circular 48.
It is therefore imperative that departments first spend external funds (grant funding) received on a project before spending internal funds provided by the City. This is to prevent any unspent external funds from resorting back to the National Revenue Fund.
Cash back strategy
The following cash flow management processes and systems are in place:
• Monthly cash flow statements are compiled daily based on daily projected and actual committed cash revenue and payments on the SAP system.
• Quarterly and annually projected cash flow statements are regularly prepared in advance.
• The monthly cash flow status of the City, including the status on certain critical dates of the following calendar month, is submitted on a monthly basis to the MMC for Finance.
• This information is also included in the monthly corporate financial report which is submitted to the Mayoral Committee and, at the end of each quarter, to the Council.
The above-mentioned reports are based on actual and projected cash revenue and payments of which the projections are based on previous actual payment history information within the framework of the cash-flow statement included in the annual budget.
2.4.8 TARIFF POLICIES
The Local Government: Municipal Systems Act, 2000 (Act 32 of 2000) requires municipalities to adopt and implement a tariff policy.
2.4.9 LONG-TERM FINANCIAL MODEL
The Long-term Financial Model has directly informed the compilation of the 2015/16 MTREF with the emphasis on affordability and long-term sustainability. The model dictates the approach to longer-term financial modelling and the outcomes are filtered into the budget process. The Business Planning and Consolidation (BPC) (full implementation anticipated for June 2015) offers a strong multi-user platform that is fully integrated with Microsoft Excel. This tool consolidates the following Budget Office processes:
• Long-term financial modelling and forecasting.
• Preparation and consolidation of the medium-term revenue and expenditure budget.
• Management reporting.
• Regulatory and statutory reporting requirements as contained in the MFMA and determined by the National Treasury.
2.4.10 THE FOLLOWING BUDGET-RELATED POLICIES ARE AVAILABLE ON THE CITY’S WEBSITE:
• Budget Policy.
• Credit Control and Debt Collection Policy.
• Indigent Policy.
• Property Rates Policy.
• Indigent Exit Programme.
• Supply Chain Management Policy.