Buffalo City Metro mayor Xola Pakati has proposed an increase in spending in a number of areas to promote development, but promised to keep tariff increases to single digit figures over the next three years.
This was reflected in the Draft Medium Term Revenue and Expenditure Framework (MTREF) for 2018-19 to 2020-21 presented in council on Wednesday.
Pakati’s report revealed that BCM had budgeted to grow its spending from R8.2-billion in 2018-19 to R9.3-billion in 2019-20 and R9.7-billion in 2020-21.
In each year R1.5-billion been allocated to infrastructure investment.
“Our commitment to respond to our people’s legitimate demands for a better life is reflected in a budget in which the key priorities are water and sanitation, roads and storm water drainage, human settlements development, transport planning, electricity and related critical infrastructure and maintenance,” says the report.
He said the metro wants to limit its tariff increases to single-digit percentages on all services except property rates, which would see no percentage increase on the 2018-19 tariff due to implementation of a new valuation roll.
For the 2018-19 year, a 6.8% increase is proposed on electricity, 9.2% for refuse removal, 9% for water services and 8.8% on sewerage.
These are expected to take effect from July 1 this year.
“The municipality has recognised the economic adversities that are currently being experienced by its citizens and in an attempt to relieve the growing poverty it has taken a decision to strive to keep its tariff increases at the most minimal feasible levels.”
Pakati said in his report: “In a continued effort to ensure the future financial viability of the city, continuous review of the operational cost base is being undertaken in an attempt to identify inefficiencies.”
He added that they would continue to focus on the operational budget in the 2018-19 financial year to further reduce any inefficiency.
He said the revenue base is not at the required levels, due mainly to the rural areas that are part of BCM.
“We are mindful that inflation leads to more pain for the poor than any other group.
“I am happy, therefore, to propose an 11% increase to the basic welfare package for households that qualify in terms of our policy, which means that the indigents of Buffalo City will continue to have a safety net of free basic services.”
Water services will benefit to a total capital budget of R739.6-million.
“This includes an amount of R240.4-million from own funds, specifically for the replacement and refurbishment of existing infrastructure within the metro.
“It also includes an amount of R170-million from loan funding to be utilised on the Umzonyana Dam upgrade project,” reads the report.
It also proposes that R1.2-billion be set aside over the next three years for the construction and refurbishment of roads and stormwater infrastructure across the city.
“The city is also continuing with the process of fleet renewal and procuring its own specialised vehicles for its operations.”
Just over R900-million has been allocated for the implementation of integrated transport system.
“Transport planning continues to be a focus area for the institution due to the high volumes on our roads.”
The Buffalo City Metro Development Agency is expected to start implementing some development projects within the next three years, and the city has set aside an amount of R34.3-million for the 2018-19 year to allow it to realise its mandate.
This amount will be escalated with a Consumer Price Index increase for the next two years and the metro will also transfer R25-million and R50-million in each of these last two years for capital projects that will be implemented by the entity.
Budget aims at poverty relief, infrastructure
This was reflected in the Draft Medium Term Revenue and Expenditure Framework (MTREF) for 2018-19 to 2020-21 presented in council on Wednesday.
Pakati’s report revealed that BCM had budgeted to grow its spending from R8.2-billion in 2018-19 to R9.3-billion in 2019-20 and R9.7-billion in 2020-21.
In each year R1.5-billion been allocated to infrastructure investment.
“Our commitment to respond to our people’s legitimate demands for a better life is reflected in a budget in which the key priorities are water and sanitation, roads and storm water drainage, human settlements development, transport planning, electricity and related critical infrastructure and maintenance,” says the report.
He said the metro wants to limit its tariff increases to single-digit percentages on all services except property rates, which would see no percentage increase on the 2018-19 tariff due to implementation of a new valuation roll.
For the 2018-19 year, a 6.8% increase is proposed on electricity, 9.2% for refuse removal, 9% for water services and 8.8% on sewerage.
These are expected to take effect from July 1 this year.
“The municipality has recognised the economic adversities that are currently being experienced by its citizens and in an attempt to relieve the growing poverty it has taken a decision to strive to keep its tariff increases at the most minimal feasible levels.”
Pakati said in his report: “In a continued effort to ensure the future financial viability of the city, continuous review of the operational cost base is being undertaken in an attempt to identify inefficiencies.”
He added that they would continue to focus on the operational budget in the 2018-19 financial year to further reduce any inefficiency.
He said the revenue base is not at the required levels, due mainly to the rural areas that are part of BCM.
“We are mindful that inflation leads to more pain for the poor than any other group.
“I am happy, therefore, to propose an 11% increase to the basic welfare package for households that qualify in terms of our policy, which means that the indigents of Buffalo City will continue to have a safety net of free basic services.”
Water services will benefit to a total capital budget of R739.6-million.
“This includes an amount of R240.4-million from own funds, specifically for the replacement and refurbishment of existing infrastructure within the metro.
“It also includes an amount of R170-million from loan funding to be utilised on the Umzonyana Dam upgrade project,” reads the report.
It also proposes that R1.2-billion be set aside over the next three years for the construction and refurbishment of roads and stormwater infrastructure across the city.
“The city is also continuing with the process of fleet renewal and procuring its own specialised vehicles for its operations.”
Just over R900-million has been allocated for the implementation of integrated transport system.
“Transport planning continues to be a focus area for the institution due to the high volumes on our roads.”
The Buffalo City Metro Development Agency is expected to start implementing some development projects within the next three years, and the city has set aside an amount of R34.3-million for the 2018-19 year to allow it to realise its mandate.
This amount will be escalated with a Consumer Price Index increase for the next two years and the metro will also transfer R25-million and R50-million in each of these last two years for capital projects that will be implemented by the entity.
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