iLembe adjustment budget approved

2016-03-09 06:00
Photo: supplied Deputy mayor of the iLembe District Dolly Shandu presented the adjustment budget to council.

Photo: supplied Deputy mayor of the iLembe District Dolly Shandu presented the adjustment budget to council.

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THE iLembe District Municipality council approved the 2015/2016 adjustment budget recently at a council meeting at iLembe House.

The deputy mayor Dolly Shandu tabled the adjustment budget on behalf of mayor Welcome Mdabe who is away on council business in China.

Shandu said one of the main challenges that resulted in the need to adjust the budget was the utilisation of committed funds to address the severe drought crisis in the region.

“Certain programmes and non-core activities had to be suspended through the use of the district’s current virement policy whereas this adjustment budget caters to the reinstatement of such programmes in line with the Service Delivery and Budget Implementation Plan (SDBIP).

“By the first six months the district committed R12.9 million through hire of plants, drought awareness and other capital costs in the process of ensuring our communities are not left in dire state without water,” said the deputy mayor.

Another challenge that led to the budget being adjusted was the slow growth on the revenue collection rate. The rate is on 56% instead of 65% which is the mid-year target.

“This impacts negatively on the implementation of the budget, as expenditure relies so much on what is collected at the end of the month,” said Shandu.

According to Shandu, council has taken strict measures to ensure service delivery is prioritised to maintain continued delivery as the district’s promise of providing excellent services and quality of life for its people.

“These include curtailing of non-core spending on the municipal budget through the austerity measures, revenue enhancement strategy in place to improve the revenue collection and the exploration of various mechanisms in addressing the water crisis brought by the drought,” she said.

The budget was prepared during the process of the takeover of schemes currently run by Umgeni Water.
The schemes were successfully taken over in October 2015 with the exception of the Umvoti scheme of which the takeover is under way.
The adjustments budget requires an additional R28,1 million to increase the bulk purchases mainly as a result of the bulk tariff increase of 7.8% and takeover of schemes. An appeal process mediated by SALGA to limit the increase to 5.6% and also to look into the affordability of the current bulk water tariff charged by Umgeni Water is underway.
At the time of the finalisation of the adjustments budget this process had not yet reached conclusion hence the adjustments to the bulk purchases.

The mid-term performance indicated an extreme strain in the cash flows of the municipality due to, amongst other things low collection rate impacted by the current drought, demand to respond to the implication of the drought and funds owed to the municipality.

For the adjustment budget a downward adjustments on the water service charges revenue with a total of R23 million is proposed until the drought epidemic is over.

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