Honourable Speaker, Councillor Mopedi Members of the Mayoral Committee Chairperson of MPAC, Councillor Toyi
Leaders of all Political Parties represented in Council Honourable Councillors
The Municipal Manager Directors and All Officials Distinguished Guests Members of the Media.
Let me greet you all in the mighty name of our Lord Jesus Christ.
Honourable Speaker
This year marks the 5th year of this Council’s term in office. The President of the Country of South Africa has announced that the Local Government elections shall be held on the 27 October 2021.
The Independent Electoral Commission has also announced that voter registration for the upcoming local government elections is expected to take place on July 17 and 18 and IEC registration stations will open from 8am to 5pm to assist new voters to register and existing voters to check and, where necessary, update their registration details. It is for this reason that I urge you as politicians in your own right, to encourage electorates to register to vote.
Fellow Councillors, the current financial year has been extremely tough in light of the serious cash flow challenges that the
municipality is facing. COVID 19 pandemic does not augur well for the municipality’s finances which is already under severe strain.
COVID 19 further exposed the vulnerability of the municipality’s cash position.
Despite the cash flow position of the municipality, efforts were made by this Council to address these challenges and amongst others the municipality approved,
1. Indigent write offs on the 31 August 2020
2. The revenue enhancement strategy on the 16 October 2020 3. Interim deployment: Temporary Unskilled Labour on the 10
December 2020
4. Amnesty for payment of services on the 28 January 2021, etc The municipality would like to thank all our residents who
continued to settle their outstanding municipal accounts during this difficult period.
LEGISLATIVE DIRECTIVE
In terms of section 16 (1) of the Local Government: Municipal Finance Management Act, No. 56 of 2003 the Council of a municipality must for each financial year approve an annual budget for the municipality before the start of that financial year.
Section 16(2) of the Management Act, No. 56 of 2003 states that, for a municipality to comply with subsection 1, the Mayor of the municipality must table the annual budget at a Council meeting at least 90 days before the start of the budget year. The Draft Budget 2020/2021 was duly tabled on the 31 March 2021 where after it was subjected to public and stakeholder consultations.
Section 24 of the Local Government: Municipal Finance Management Act, No. 56 of 2003 obligates Municipal Councils to approve their annual budgets before the start of a financial year, together with the adoption of resolutions as may be necessary:
a) Imposing any municipal tax for the budget year;
b) Setting any municipal tariffs for the budget year;
c) Approving measurable performance objectives for revenue from each source and for each vote in the budget;
d) Approving any changes to the municipality’s integrated development plan; and
e) Approving any changes to the municipality’s budget-related policies.
Section 34 of the Local Government: Municipal Systems Act, No 32 of 2000, provides that a municipal council must review its
Integrated Development Plan annually in accordance with the assessment of its performance in terms of Section 41, and to the extent that changing circumstances so demand, and may amend its Integrated Development Plan in accordance with a prescribed process.
CONSULTATIVE PERIOD
The notice calling for the public comments and public participation schedule were advertised and the consultation process for both IDP and Budget public participation started on Tuesday, 13 April 2021 and ended on Wednesday, 21 April 2021. Despite the uncertainty of COVID 19 pandemic members of the community attended the public participation meetings in different areas of the municipality.
I hereby on behalf of Ngwathe Council, thank all those community members who left their homes to attend the meetings of which some were held on the cold open fields because of the pandemic.
Honourable Speaker
The National Lockdown imposed as a result of the COVID 19 virus, and the various regulations promulgated by National Government under the National State of Disaster, has unfortunately had a devastating effect on the economy of South Africa as a whole and Ngwathe Local Municipality in particular.
I present this budget today, fully understanding the challenges that we face as a municipality, which include the fact that we simply do not have sufficient funding for all areas that need to be funded. The challenge is to do more with the available resources.
The Draft MTREF Budget 2021/22 – 2023/24 was compiled and aligned to the draft Integrated Development Plan and the following National Treasury circulars were taken into account:
• Municipal Budget Circular for the 2021/22 MTREF - MFMA Circular No. 88, 107 and 108, and previous guidelines and circulars,
• Municipal Budget Circular: Cost containment measure - MFMA Circular No. 82,
• Division of Revenue Bill (Gazette 43025 of 17 February 2020),
• Municipal Budget and Reporting Regulation,
• Water Boards (Rand Water) Tariff Guidelines and approval
• Eskom Electricity Tariff Guidelines and approval,
• South African Local Government Bargain Council - Collective Agreement: wage increase
The following is a consolidated overview of the proposed 2021/2022 budget taking into consideration tariff adjustments,
- Total Operating revenue: R 880,182,893 - Total Operating Expenditure: R 900,155,977 - Total Capital Expenditure: R 159,661,000
- The increases in taxes and tariffs are as follows:
1. Water Supply 4.95%
2. Electricity 20% (pending actual Nersa Approval)
3. Sewerage 4.1%
4. Refuse 4.1%
5. Rates and Taxes 4.1% (With rebates / 10%
discount on Residential and 5% discount on business)
6. Cemeteries 4.1%
7. Halls 4.1%
8. All Other Sundries 4.1%
Speaker, honourable Councillors
Let me also remind the meeting that this is the final review of the current IDP since this year is the Local Government election year. In terms of section 21 (b) of the MFMA the Mayor is required to table in Council ten months before the start of the new financial year (i.e.
in August 2021) a time schedule that sets out the process to revise
the IDP and budget. The next Budget and IDP process plan for the development of the new 5 year strategic document shall be presented and approved by Council around August 2021.
AUDIT PERFORMANCE
It should be noted that within the past five years we have received two unqualified audit opinions by the Auditor-General which symbolized responsible and good governance practices, during the third year we regressed to a disclaimer audit opinion, the forth year we received a qualified audit opinion and we are presently on a qualified opinion. It I imperative that we join hands and ensure that we improve our audit opinion to achieve a clean audit.
ACKNOWLEDGEMENTS
I thank all MMCs, Section 79 Chairperson, Councillors, Municipal Manager, Directors and officials for their hard work and for their determination to complete the IDP and budget for 2021/22 and two outer years. I also thank the public who participated in finalising this IDP and budget.
Thanks to our Heavenly Farther for his support, guidance and wisdom because without his presence this IDP and budget would not have been possible.
CONCLUSION
It is my honour to present this 2021/22 – 2023/24 Medium Term Revenue and Expenditure Framework (MTREF) Budget and Reviewed 2021/22 IDP to you.
On behalf of the Mayoral Committee I hereby recommend that:
1. MTREF BUDGET FOR 2021/22, 2022/23 AND 2023/24
1. Council consider the draft 2021/22 – 2023/24 Medium Term Revenue and Expenditure Framework (MTREF) Budget as required by section 16 of the Municipal Finance
Management Act no 26 of 2003.
2. MAYCO recommends to Council to consider that the 2021/22 – 2023/24 operating revenue budget amounting to R 880,182,893, operating expenditure budget
amounting to R 900,155,977 and the capital budget
amounting to R159,661,000 funded from conditional grant, as contained in the tables.
3. MAYCO recommends to Council to consider the approval of the following proposed adjustments to the tariffs:
9. Water Supply 4.95%
10. Electricity 20% (pending actual Nersa Approval)
11. Sewerage 4.1%
12. Refuse 4.1%
13. Rates and Taxes 4.1% (With rebates / 10%
discount on Residential and 5% discount on business)
14. Cemeteries 4.1%
15. Halls 4.1%
16. All Other Sundries 4.1%
4. MAYCO recommends to Council to consider the following draft budget-related policies and by-laws for the 2021/22 – 2023/24 Medium Term Revenue and Expenditure
Framework budget:
a) Draft Credit Control and Debt Collection Policy and by- law
b) Draft Property Rates Policy;
c) Draft Policy on Free Basic Services;
d) Draft Tariff Policy e) Draft Budget Policy;
f) Draft Supply Chain Management g) Draft Transfer and Virement Policy;
h) Draft Funding and Reserves Policy;
i) Draft Asset Management Policy j) Draft Banking and Investment Policy k) Draft Borrowing Policy
l) Draft Funding and Reserves Policy
m) Draft Wasteful and Fruitless Expenditure
n) Daft Cell phone Allowance o) Draft Traveling and Subsistence
5. Council takes note that NERSA approved 14.59% for electricity tariff
6. MAYCO recommends to Council to instruct management to apply for further increase to the maximum of 20% before the 15 June 2021, which will be the closing date for further applications.
3. NGWATHE LM REVIEW IDP 2021/22
1. MAYCO recommends to Council to approve the Review Draft IDP 2021/22.
