An amount of R30 million during the MTREF period has been provided for the development and improvement of cemeteries in the Metro. An amount of R11 million has been set aside in the MTREF period for the KWT traffic building.
PAKATI
Metro Growth and Development Strategy
The metro growth and development strategy is a long-term vision and goes beyond the IDP as a metro vision until 2030.
Scoping the Landscape
Water losses are still significant and continue to be one of the areas of focus for reducing the MTREF budget where an amount of R200 million of own funds during the 2017/18 MTREF period has been budgeted for the replacement of aging infrastructure. A further sum of R230 million has been budgeted during the MTREF period for the improvement of the Umzonyana Dam which will be financed by a loan financing.
The National Development Plan
Page | 17 Throughout its history, the institution has undertaken capital projects with the aim of expanding the city. However, it is recognized that capital expansion cannot occur indefinitely without corresponding economic growth, otherwise the cost of infrastructure replacement will outweigh the affordability of the local economy due to the impact of depreciation on operating budgets.
Local Economic Development
- Buffalo City Metro Development Agency (BCMDA)
- East London Industrial Development Zone (EL IDZ)
- Invest Buffalo City
- Priority Sectors
- Revitalization Of Industrial Areas
- Skills Development, Employment Readiness And Research Collaboration
The city will continue its support to the Auto Incubator in Mdantsane and subsequently contribute to the revitalization of the township economy. The manufacturing sector is an essential sector for the city and the prosperity of the service sector is dependent on a strong manufacturing base.
Charting the Way Forward
- Overall Summary of Year-on-Year Increases
- Rates
- Electricity
- Water
The capital expenditures of the municipality are guided community priorities as included in the IDP. A large part of the capital budget in the MTREF period 2017/18 has been allocated to major infrastructure services (wastewater: 17%, roads and rainwater: 17%).
Summary of Financial Position, Medium Term Revenue and Expenditure Strategy
- Cash & Cash Equivalents
- Cost Coverage
- Debt Impairment
- Asset Management
The institution continues its focus on improving the funding mix in the capital investment programme. Buffalo City Metropolitan Municipality's Built Environment Performance Plan BEPP), is submitted in accordance with the Division of Revenue Act (DoRA) requirements with respect to the various grants related to the built environment and secondly in partial fulfillment of the requirements of the Integrated City Development Grant ( ICDG).
BCMM’s Priorities and Linkages to the IDP
- Key amendments to the budget related policies
- Property Rates
In the first financial year of the MTREF budget, an amount of R40 million has been allocated to cover this plan. The budget appropriations in this regard amount to R778 million for the financial year 2017/18 and correspond to 12% of the total operational expenditure.
Repairs and Maintenance
Other expenses consist of various line items related to the daily work of the municipality. This allocation includes R70 million that has been allocated to MTREF for the electrification of informal housing while the remainder of the funding (R300 million) has been allocated for infrastructure improvements. The Zwelitsha Wastewater Treatment Works Upgrade Phase 2 project is ongoing and has been budgeted for R233 million over the MTREF period.
This requires the simultaneous assessment of the Financial Performance Budget, Financial Position and Cash Flow, along with the Capital Budget. This table facilitates the visualization of budgeted operational performance in relation to the organizational structure of the city. The table below is an analysis of the surplus or deficit for electricity and water trading services.
The reason is that the ownership and the municipality's net assets belong to the community. It can be seen that the municipality's liquidity levels grew significantly in the previous accounting periods.
SUPPORTING DOCUMENTATION
OVERVIEW OF ANNUAL BUDGET PROCESS
- IDP/Budget Process Overview
- Community Consultation
Make a copy of the rate book and resolutions available for public inspection at city offices. Submission of the Business Plans for consideration by Top Management for the 2015/16 rollover adjustment budget (excluding Contingent Grant Funded Projects). Submission of the Business Plans for consideration by Top Management for the 2015/16 adjustment budget rollover (Contingent Grant Funded Projects).
Council meeting Office of the President of MSA / MFMA November 30, 2016 No. IDP IDP/PMS MSA/MFMA Political Steering Committee Meeting 2 December 2016. Submission of business plans for consideration by top management for the 2017/18 to 2019/20 budget MTREF . It submits a mid-year 2016/2017 adjustment budget to Treasury in terms of Treasury reporting requirements.
TUESDAY, 18 APRIL 2017 DAY WARD VENUE & TIME
WEDNESDAY, 19 APRIL 2017 DAY WARD VENUE & TIME
THURSDAY, 20 APRIL 2017 DAY WARD VENUE & TIME
WEDNESDAY, 3 MAY 2017 DAY WARD VENUE & TIME
FRIDAY, 5 MAY 2017 DAY WARD VENUE & TIME
MONDAY, 8 MAY 2017 DAY WARD VENUE & TIME
WEDNESDAY, 10 MAY 2017 DAY WARD VENUE & TIME
OVERVIEW OF ALIGNMENT OF ANNUAL BUDGET WITH IDP
The process of screening IDPs was carried out within the framework of national, provincial and district policies and legislation. The national sphere of government develops and promulgates legislation, policies and strategies that all spheres must implement. In developing their own plans and policies, other spheres of government, especially the local sphere of government, must ensure coherence with national and provincial plans.
Key plans and policies include the National Development Plan, Provincial Development Plan – EC Vision 2030, Sustainable Development Goals and 12 Government Outcomes.
Point Plan
The percentage of people with access to electricity needs to increase from 70% in 2010 to 95% by 2030, with no grid options available for the rest. Ensure that all people have access to clean, potable water and that there is sufficient water for agriculture and industry. Page | 145 The 2017/18 MTREF has therefore been directly informed by the IDP review process and the tables below provide a reconciliation between IDP strategic objectives and operating revenues, operating expenditure and capital expenditure.
Page | 146 Table 40: MBRR Table SA5 - Alignment between IDP Strategic Objectives and budgeted operating expenses. Page | 147 Table 41: MBRR Table SA6 – Alignment between IDP Strategic Objectives and budgeted capital expenditures. Performance Management is a system that aims to manage and monitor the progress of service delivery against identified strategic objectives and priorities.
Safety of capital
Liquidity
Revenue Management
Creditors Management
Other Indicators
BCMM has developed a Water Conservation and Water Demand Management (WC/WDM) strategy that focuses primarily on reducing non-revenue water levels to increase the financial viability and sustainability of BCMM's water supply.
Free Basic Services: Basic Social Services Package for Indigent Households
- Blue Drop Status
The BCMM is the Water Services Authority and has executive authority to provide water services within its jurisdiction in terms of the Municipal Structures Act 118 of 1998 or the ministerial authorizations granted in terms of this Act. Ensuring access: ensuring the realization of the right to access water services, in particular basic water services (depending on available resources) by ensuring that appropriate investments are made in water services infrastructure. Planning: Prepare water services development plans to ensure effective, efficient, affordable, economic and sustainable access to water services that promote sustainable livelihoods and economic development.
Regulation: To regulate the provision of water services and water service providers within the jurisdiction of the municipality and within the policy and regulatory frameworks set by DWAF through the adoption of by-laws and the regulation of contracts. Provision: Ensure the provision of efficient, effective and sustainable water services (including water conservation and demand management) by providing water services ourselves or by selecting, commissioning and contracting with external water service providers. BCMM provides approximately 60% of the potable water volume through Umzonyana Water Treatment Works and KWT Water Treatment Works, 40% is provided by Amatola Water as a water service provider.
Tariff Policy
Rates Policy
Credit Control Policy
Indigent Policy
Investment and Cash Management Policy
Long-Term Borrowings Policy
The Council is to adopt the revised Supply Chain Management Policy (which includes the Supply Chain Management Policy for Infrastructure Procurement and Delivery Management) on 26 May 2017.
Asset Management Policy
Capital Infrastructure Investment Policy
Funding and Reserves Policy
The long-term financial planning policy was adopted by the council on May 29, 2013 and includes the preparation, implementation and evaluation of the plan for the provision of basic communal services and basic assets.
Budget Implementation & Management Policy (Budget Virement Policy) The Budget Implementation & Management Policy (Budget Virement Policy) was adopted
Budget Policy
It must also be recognized in the local government environment that the resources that are accumulated must allow for the replacement of the asset that was originally created. The main purpose of the increase in liquidity resources is to enable the replacement of infrastructure assets in the future. In the case of the Buffalo City Metropolitan Municipality, there is a potential to increase loan financing to the institution to enable replacement of infrastructure assets as the institution has low leverage.
The detrimental effect of this policy is that consumers are expected to pay a slightly higher monthly bill compared to peers, but this policy is implemented specifically in an attempt to allow future replacement of infrastructure assets. The reason for using this approach was, in particular, to enable the collection of additional funds for the replacement and/or renovation of these infrastructure assets in the future. Admittedly, if this approach were not followed, there would be a significant risk for the national fisc and consequently for the treasury to allow significant additional funding to replace these assets in the future.
Interest rates for borrowing and investment of funds
Short term: A1: Defined as very high certainty of timely payment compared to other issuers or obligations in the same country. Long-term: A: Defined as high credit quality relative to other issuers or obligations in the same country. The revenue collection rate is currently at April 2017) of annual billings and arrears.
Stricter control measures of the Credit Control Policy are implemented, recovery of overdue debts will be used as a source of additional cash flow to finance future capital infrastructure projects.
Growth in the tax base of the municipality
Salary and Wage increases
Impact of National, Provincial and Local policies
The focus will be on strengthening the link between political priorities and spending to thereby ensure the achievement of national, provincial and local goals.
Ensuring maintenance of existing assets
Ability of the municipality to spend and deliver on the programmes
Tariff Increases over the Medium-term
Deposits - Corporation for Public Deposits Bankers Acceptance Certificates Negotiable Certificates of Deposit - Banks Guaranteed Endowment Policies (settlement) Repurchase Agreements - Banks Municipal Bonds. Deposits - Corporation for Public Deposits Bankers Acceptance Certificates Negotiable Certificates of Deposit - Banks Guaranteed Endowment Policies (Sinking) Repurchase Agreements - Banks.
Outcome
Audited Outcome
Original Budget
Adjusted Budget
Full Year Forecast
Pre-audit outcome
Budget Year 2017/18
Budget Year +1 2018/19
Budget Year +2 2019/20
Current Year 2016/17 2017/18 Medium Term Revenue &
Expenditure Framework
Cost Coverage
Estimated cost recovery, including conditional grants, is expected to be 7.1 months as at 30 June 2018 and is expected to remain approximately 7 months into the MTREF period.
Surplus/deficit
Property Rates/service charge revenue as a percentage increase less macro inflation target
Cash receipts as a percentage of ratepayer and other revenue
In the 2017/18 financial year of the MTREF, an amount of R318 million in bad debts is provisioned, based on an average collection rate of 92.5%.
Repairs and maintenance expenditure level
Asset renewal/upgrade expenditure level
Page | 187 Table 60: MBRR Table SA23 - Salaries, allowances and bonuses (political officials/councillors/senior managers).
