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PRESENTATION OF FINAL MULTI–YEAR BUDGET 2021/2022 - 2023/24 FOR KING CETSHWAYO DISTRICT MUNICIPALITY BY DISTRICT MAYOR CLLR BL PHUNGULA
Honourable Speaker and Councillors
It is my great privilege to present the final budget for the current term of this council, our legacy of commitment to pave the way for the next financial year, and chart a course of development for the people of this district.
We take our lead for this financial year from the Provincial Programme of Action announced by the Premier of KwaZulu-Natal in the State of the Province Address. We present the budget under the resounding theme of, “Quickening the Tempo to Economic Recovery and Job Creation.”
We also take cognisance of the giant icon who we are celebrating this year, Mama Charlotte Maxeke.
Throughout her life, Maxeke championed the potential of African people, especially women, to stand up and take control of their own affairs.
This week, on 25 May 2021 we celebrated Africa Day. This year's Africa Month is celebrated under the theme: “The year of Arts, Culture and Heritage: in the year of Charlotte Maxeke”.
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It is also the year to commemorate the founding president of the African National Congress, Dr John Langalibalele Dube. Let us never forget the great minds and hearts that nurtured the soil of Africa and gave us the roots from which we grow.
In our quest to quicken the economic tempo, we recognise the resilient and hardworking people of our district, who have risen above the difficulties posed by the COVID-19 pandemic, and withstood the knock-on effect on jobs, the cost of living, and the strain on their mental and physical health.
We salute these citizens of the district, and endeavour to pass a budget that is transformational, community-driven and purposefully developmental.
The vision of the district is as follows:
Building sustainable communities through excellent service delivery Our Mission Statement is:
Creating a safe and healthy environment that promotes sustainable, radical, and inclusive economic and social development reinforced by service excellence.
Honourable Speaker, in keeping with this mandate, I present the final budget for the 2021/22 – 20323/24 financial years.
When I presented the Draft Budget to Council on 26 March 2021, I carefully spelled out the relevant legislation and budgeting regulations that we are abiding by in approving this budget.
I am pleased to say that we have followed the guidance and provisions of the MFMA (Section 16 and 24), the relevant MFMA circulars, as well as the Municipal Budget &
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Reporting Regulations. I will not repeat them in the interests of time. They are however detailed in the item in the Council agenda dealing with the approval of the Final Multi- Year Budget.
Councillors will recall from the draft budget presentation that there were changes to conditional grants, including a reduction in the MIG (Municipal Infrastructure Grant).
Some of the grants have been reprioritised from underspending grants to fund a once- off councillor gratuity for non-returning councillors.
In addition, the Municipal Systems Improvement Grant scope is extended to fund comprehensive institutional diagnostic assessments of the 21 district areas where the district municipality is a water service authority.
We have been advised to refer to MFMA Circular No. 107 relating to the Local Government elections and issues to be considered in compiling the 2021/22 MTREF.
Key to this are the rights and responsibilities of the administration and the incoming Councils, with regard to the IDP and preparation for the new Council to be empowered and supported in the execution of their duties.
The regulations also advise Councils to consider financial sustainability in terms of salary increases, and likewise, to budget for actual costs approved in the Public Office Bearers Act relating to remuneration of members of Council.
The rules applicable to rollover applications must also be noted, and it is important to note that with regard to the unconditional grant (Equitable Share) in response to the Covid-19 pandemic, municipalities may request a rollover from National Treasury of any unspent committed Covid-19 allocation to be rolled over into the 2021/22 financial year.
The final budget has been trimmed-down and sharpened in response to the decrease in grants and revenue over the past year, and it is informed by Council’s strong emphasis on prioritizing the core function of the municipality, which entails the provision of basic services such as water and sanitation.
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One of the most critical needs is to construct a new cell at the solid waste site as the current one has almost reached its full capacity. A business plan has been submitted to COGTA to fund the construction of the Cell 3 of the solid waste site, and a response is still awaited. Upon receipt of a positive response, the funding will be amended to reflect the MIG as the funder accordingly.
The 2021/2122 draft budget was tabled before Council on the 26 March 2021 and was recommended for public consultation.
In line with Section 23 of the MFMA, the municipality embarked on a pubic consultation process where budget roadshows were held in various areas of the local municipalities in the District. Consultations on the draft budget also took place with the corporate and government sector, the Local House of Traditional Leaders, as well as National Treasury and the KwaZulu-Natal Provincial Treasury.
The key aspects of the budget are as follows:
The proposed increases on Trading Services revenue were revised by the Revenue Section and were considered by the Budget Steering Committee in December 2020.
These have been included in the current final budget. The total expected revenue on Service charges is expected to be below the MTREF projected amount by R7.3m.
The are no changes in grant income from the draft budget to the final budget.
The total budget over the MTREF is:
2021/22 2022/23 2023/24
FINAL MTREF:
2020/21
R1,030 billion R1,156 billion R1,240 billion
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The expenditure is aligned to the projected Income, after excluding the portion of the depreciation that is not cash backed. The depreciation for 2021/22 is estimated at R130m with cash back of R10.1m, as presented in the March draft budget.
The overall Expenditure for the 2021/22 financial year is R1.030 billion rand, increasing by R4.4m from the draft budget that was tabled in Council in March.
This is due to the expected insurance payout and auction sales proceeds, both of which have been factored into the final budget.
The Operational Budget (Municipal Running Costs) including employee costs for the 2020/21 financial year is R823m. There have been some changes in most of the cost centres due to the movement of some functions and staff in relation to those functions and new cost centers, such as Risk and Fleet Management. The explanations for these are explained in detail in the budget item.
The budget for the Bulk Water provision is R174m for the 2021/22 financial year, increasing to R202m in the two outer years of the MTREF.
The salary increase of 6% has been factored into the final budget for 2021/22. The total employee related costs for the financial year is R275 million. Due to the financial constraints being experienced by the municipality, all the vacant positions are proposed to be put on hold while this financial situation prevails.
The only positions that are to be filled are those of the DMM’s in the Technical Services and Corporate Services department, together with the Senior Managers in Technical Services.
Furthermore, the positions of the water tanker drivers (adjustment budget) and plumbers and general assistants which have been included in this budget will be filled as these are intended to reduce reliance of the municipality on external service providers when it comes to basic service delivery provision.
6 The Operational IDP Budget is as follows:
2021/22 2022/23 2023/24
Final Budget:
2020/21
R83 million R50 million R53 million
It must be noted that, in line with the directive to reduce costs and prioritise the core function of the municipality in terms of the allocation of budget, there has been a substantial decrease in the budget allocated for operational projects across the majority of the cost centres.
Capital IDP Budget
The capital budget for the 2021/22 MTREF has been provided for as follows;
2021/22 2022/23 2023/24
Final Budget:
2020/21
R245 million R348 million R397 million
There has been a decrease of R4.7m from what was tabled before Council to what is contained in the final 2020/21 budget.
The construction of the landfill site cell 3 does need to commence as a matter of urgency as the airspace is almost at capacity. A total budget of R19.8m from the draft budget has been reduced by R9.1m as this was increased in the last 2023/24 financial in the MIG grant.
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The table below depicts the capital projects that have been allocated the biggest chunk of the capital budget in the 2021/22 MTREF:
Honourable Speaker and councillors, this summary gives a snapshot of the total budget of R1.030 billion for 2021/22, with a total of R3.426 billion for the MTREF.
Our tariff increases are a balance of affordability and financial sustainability. Water and sanitation tariffs will increase on average by 6%.
Cemetery fees will have zero increase, however Waste site tariffs will increase by 10%.
This brings me to the end of the budget presentation.
Project Name
Final Budget 2021/22
MIDDLEDRIFT SSA5 30 075 736
TANKER REDUCTION STRATEGY 30 000 000 MBONAMBI WATER PHASE 2 27 316 300 MELMOTH SEWER UPGRADE 26 565 523 MHLANA SOMOPHO PHASE 3C 25 667 948
MIDDLEDRIFT PHASE 2 18 073 778
WC/WDM STRATEGY IMPLEMENTATION 10 000 000 GINGINDLOVU RAW WATER SYSTEM RELOCATION 10 000 000 REFURB OF WATER STORAGE RESERVOIRS 10 000 000
MIDDLEDRIFT SSA3 10 000 000
ESHOWE WATER TREATMENT WORKS REFURBISHM 10 000 000
NKANDLA VITSHINI S/A SSA5 7 707 936
CONSTRAUCTION OF CELL 3 6 384 305
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I wish to quote Dr John Langalibalele Dube after his election as president of the South African Native National Congress in 1912:
“We must still be careful ever to seek out the way where wisdom (not mere sentiment or desire) leadeth, treading softly, ploddingly, along the bright path illumined by righteousness and reason – the steep and thorny path, yet only one that will safely and surely lead us to our goal, the attainment of our rightful inheritance as sons of Africa.”
I thank you all!
