City’s big budget plans

2020-04-21 14:54

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Msunduzi Municipality is anticipating to spend in excess of R413,5 million on capital projects such as housing and roads rehabilitation in the 2020/21 financial year, which begins in July.

The municipality’s projected revenue collection and expenditure for the upcoming financial year are outlined in the draft budget that is currently out for public comment.

According to the document the City is expecting to record a R366,9 million increase in its revenue from R5,6 billion to R5,9 billion, while the expenditure is anticipated to increase by R502 million from R5,1 billion this financial year.

These are dependent on whether Msunduzi can achieve an 85% revenue collection rate on its current customer base and spend 100% on both the capital budget and operational expenditure.

The biggest sources of City revenue continue to be property rates and water and electricity, which are anticipated to put over R4 billion in its coffers.

Water and electricity bulk purchases and salaries make up the highest percentage of the municipality’s monthly expenditure bill.

Among the priorities for 2020/21 are the filling of vacant posts, call centre infrastructure development project, rehabilitation of municipal buildings, capping of water and electricity losses as well as finalising the implementation of the SAP financial system.

There are three housing projects on the capital budget, which include R90 million for the long-awaited Jika Joe housing development and R6,1 million for the military veterans’ project.

The City Hall is also finally going to get some attention with R5 million budgeted for its refurbishment.


DA caucus leader Sibongiseni Majola said the draft budget is an indication that Msunduzi is still sleeping on its financial potential.

“The budget is a regulated exercise so every year National Treasury issues a circular that guides the process. This year’s circular dictates our projections must be realistic and what we have before us is far from the truth ...

“The officials who put this together are just juggling figures instead of looking at the past performance and seeing how we can improve on that.”

He said Msunduzi also has a history of underspending on conditional grants, which sees millions of rands surrendered back to the National Treasury every year, while the City’s residents continue to bemoan the poor service delivery.

“There is no way they are going to start spending 100% of those grants when some departments often struggle to get past even 50%.”

Majola said Pietermaritzburg is a R10 billion city but it cannot reach that status until it starts implementing its bylaws equitably. This, he said, will include billing the more than 80 000 consumers currently not on the municipality’s database who continue to enjoy free water and electricity.

“You can’t say you are going to collect 85% when there are customers who are not even on your database.”

He said the municipality is repeatedly shooting itself in the foot by not registering all the indigent households to receive a significant equitable share for supplying them with free basic services.

“According to the census statistics there are more than 30 000 indigent households in Msunduzi but the City’s register has about 5 000.”

He said people would not come forward to register because they are already enjoying free unlimited services.

He said treasury also instructs muni­cipalities to align their tariff hikes with the consumer price index (CPI), which is between zero and six percent for 2021, yet Msunduzi wants to impose an increase of 8,1% for electricity and nine percent for water on its customers.

While he understands that the City will simply be passing down tariffs from National Energy Regulator of SA (Nersa) and Umgeni Water, he said the municipality can find a way to cushion its residents from them.

“The DA’s position on this is that the municipality must protect its residents from the pressures exerted by service providers. Rather use punitive tariffs on bylaw contraventions. That will increase the revenue collected on fines, penalties and other charges on transgressions.”

He said at present the City is not exploiting the revenue on transgressions and that is indicated with a budget projection of just R17 million for 2020/21, which is a R1 million increase from this year’s R16 million. The proposed tariff hikes and R542,2 million expenditure for contracted services are some of the reasons the DA says it will not support this budget when it comes to council for approval at the end of June.

“We know that the budget for contracted services include maintenance and repairs for things like potholes, street lights and halls, but we cannot support it because it also includes an irregular expenditure for bodyguards for councillors. We cannot be part of approving that because those bodyguards were never approved by council.”


Electricity: 8,1%

Rates: 6%

Water: 9%

Sanitation: 6%

Refuse: 6%

Other: 6%

Read more on:    pietermaritzburg  |  msunduzi municipality

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