The city's draft budget

2009-05-27 00:00

MSUNDUZI Municipality’s draft budget is a mixed bag with welcome concessions for some ratepayers and unpleasant news for others.

The document shows that as in most institutions a fair amount of income gets spent on human resources costs. A perusal of the draft operating estimates shows that 12% has been set aside for salary increases, R15 million to fill vacant posts and R33,5 million for overtime. To keep down overtime costs, senior officials will have to be diligent. There was controversy this year when the council’s entire overtime budget of R33 million was blown seven months into the financial year.

The 12% recommended salary increase in the draft budget is based on the estimated cost of living allowance. As no agreement has been reached as yet in terms of collective bargaining for salaries in local government structures, this could go up or down.

Another sticking point is the six percent increase for repairs and maintenance. The Democratic Alliance has spoken out vehemently on this low increase. Mayor Zanele Hlatshwayo, as reported in yesterday’s paper, said this is because more money had been set aside in the capital budget to replace rather than repair the city’s ageing infrastructure.

Msunduzi seems to have had one of the smoother introductions to the Municipal Property Rates Act (MPRA) which will be implemented in the city from July 1. Although there was an outcry over the valuation roll, there has been general acceptance of the rates revenue. The draft budget capped the rates revenue at R406 million, which is a 7,5% increase on the amount collected in the last financial year. The recommended rates randage is 0,0075 in the rand for residential properties and 0,0156 in the rand for non-residential properties. Various rebates do apply. All residential properties will get a rebate of 0,0090 cents in the rand. No rates will be paid if a property is valued at R130 000 or less and there will also be a 100% rebate on vacant land valued at R60 000 or less. Agricultural properties will get a rebate of 0,0066 in the rand, public service buildings a rebate of 0,0050 in the rand, while rural communal land, state trust land and Ingonyama Trust land qualifies for a rebate of 0,0165 cents in the rand.

Homeowners who are pensioners whose total income does not exceed R2 516 per month will qualify for 33,33% rebate and those earning less than R2 020 per month can get a 40% rebate.

Non-profit organisations will get a 100% rebate in the 2009/10 financial year. However, as stipulated in the MPRA this will be gradually decreased in the following years going down to 75%, 50% then 25%. By the end of four years these organisations will be expected to pay rates.

Councillor Pops Chetty has spoken out on the fact that the Group Areas rebate has fallen away in this budget. He claims there is provision for the rebate in the MPRA and that the conditions that warranted the rebate still prevail.

While there has been general acceptance for the proposed tariff increases for water, sewage and refuse, there is strong resistance to a proposed 27,5% electricity tariff increase (see edited version of Pietermaritzburg Chamber of Business (PCB) submission on this matter on the right).

Bridgemohan said that in preparing the draft budget they had to take cognisance of a warning from the national Treasury which said municipalities must pay special attention to eliminating spending on “nice-to-have items and non-essential activities”. National Treasury had also warned that given the economic crisis, tough decisions would have to be made in preparing the budget and that council had to give priority to:

• managing all revenue streams, especially debtors;

• protecting the poor from the worst impacts of the economic downturn; and

• expedite spending on capital projects that are funded by conditional grants.

PCB has asked for a closer relationship with the municipality, saying this will enable the private sector to assist in and contribute towards the development of the city. According to the organisation’s submission on the budget, a regular and structured forum or council should be established in which representatives of the business community may interact with municipal officials and councillors, particularly those responsible for ecomonic development and growth.

● PCB full submission on the Msunduzi Draft Municipal Budget for 2009/10 can be viewed at: www.pcb.org.za

Read about which manufacturers are affected the most.

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