BUDGET APPROVED - BUDGET SPEECH BY OVERSTRAND MAYOR
Overstrand Municipality's Budget, the IDP Review, Water Services Development Plan and SDBIP for the financial year of 2021/2022 as well as the audited Annual Report for 2019/20 was approved Council.
The following speech was delivered by Executive Mayor Dudley Coetzee at a virtual special council meeting today, 26 May 2021:
Today the fourth review of our 5-year Integrated Development Plan (IDP) and 2021/2022 Budget will serve before Council.
For 2021/2022 our strategic direction set in the 5-year IDP remains unchanged. The IDP review articulates the development needs of our communities and the Municipality whilst also stating the specific initiatives for the 2021/2022 financial year. You will recall that the Municipal Budget funds the delivery of the IDP.
In looking back at the past 14 months, we had to adjust without prior notice to a national lockdown at the end of March 2020, as a result of the COVID-19 pandemic, and the various regulations promulgated by National Government under the National State of Disaster. We also had to adjust to and accommodate the devastating effect on the economy of South Africa and the impact on the Overstrand and our communities.
The announcement of stringent measures on a national level, to contain the spread of Covid-19, such as travel restrictions on foreigners, a ban on mass gatherings of people, and the closure of schools, are still impacting on the national economy. The unforeseen and almost disastrous impact of the afore mentioned on the local economy is a reality.
Adjusted lockdown level 3 was introduced from 29 December 2020 to 28 February 2021, with an adjusted lockdown level 1 effective from 1 March 2021.
The Department Health issued a statement during April 2021, confirming that more than 3 338 vaccination sites had been identified by provinces. The government also announced that it has secured all the vaccines needed.
Of concern however is the current upsurge of infections in various provinces, and the slow rate of vaccinations. Senior citizens are encouraged to register on the Electronic Vaccination Data System (EVDS), and we should all assist senior citizens to register on the EVDS portal at vaccine.enroll.health.gov.za.
At provincial level, there are signs of an economic recovery and we can expect economic growth to increase by an estimated 4.6% in 2021 in the Western Cape. There are, however, significant risks, including, the third wave of Covid-19, a shortage of electricity and a rise in inflation, all of which could compromise economic recovery.
The one real difference we can all make to economic recovery is ensuring that as many people as possible are vaccinated as soon as possible.
From a municipal finance perspective, the negative impact on cashflows in the event of a 3rd wave of the Covid-19 pandemic on the ability of consumers to maintain monthly payments of municipal accounts remains a threat.
Under the current circumstances revenue projections are based on an increase of 4% for property rates and other municipal services (excluding electricity) and includes sundry tariffs. The first 6kl of water consumed will also only increase by 4%.
We are aware of the fact that our communities share our concern with regard to the steep electricity price increases granted to Eskom by the National Energy Regulator of South Africa. NERSA approved an increase of 17.8% on the monthly account for bulk electricity purchased by the Municipality from Eskom. The Municipal tariff increase guideline for electricity purchased by consumers, from the Municipality, has been set at 14,59%.
Comments received from the public on the 2021/2022 Draft Budget are amongst others, affordability, roads and stormwater, and the threat of fires. The Budget Steering committee considered all comments received from our communities in finalising the 2021/2022 IDP and 2021/22 Budget.
With this Budget we have considered the impact that COVID-19 has had on our ratepayers as well as on the ability of the Municipality to continue to operate and provide infrastructure and a high level of services that are only fully used during relatively short holiday seasons.
In order to present a balanced budget to Council, the respective municipal directorates were requested to cut back on initial expenditure budget requests.
The two Special Rating Areas approved in March 2020 for Onrus-Vermont and Kleinmond, with implementation post-phoned will also now implement their respective business plans as from 1 July 2021. The rate requested for these areas varies per area and is also included in the list of tariffs.
As in the past, an amount R7m or R500 000 per ward, has been budgeted for ward specific projects, with a focus on infrastructure related projects. In order to contribute to reducing expenditure, no budget is provided for the Mayoral Fund nor is funding provided for Grants-in-Aid.
A contribution of R300 000 towards festivals has been included in the 2021/2022 budget, as a stimulus to attract visitors to the Overstrand and boost the local economy.
Residents who qualify for an indigent grant will be assisted with the following increased limits as from 1 July 2021, allowing more households to qualify for this support -
• An increase in the average monthly purchase of electricity over the previous 6 months, from 400kwh to 500kwh per month.
• An increase in the average monthly consumption of water over the previous 6 months, from 18kℓ to 20kℓ per month.
The South African Local Government Bargaining Council (SALGBC) Salary and Wage Collective Agreement for municipalities for the period 01 July 2018 to 31 June 2020 has come to an end and a new agreement is under consideration, which we trust will take into account the current fiscal constraints faced by government.
The proposed increase in the salary budget is 4.5%, and notch increases, which average 1.9% have also been budgeted for in view of the fact that annual salary adjustments are still to be negotiated between the employer organization (SALGA) and the respective unions.
No budget provision has been made for salary increases for Councillors and no new staff positions were considered for 2021/2022, in a further attempt to contain costs.
The Driver’s Licence testing centre planned for Gansbaai, and subsequently post-phoned, will now be operational in 2021/2022 after completion of the facility.
To assist in rebuilding the economy of the Overstrand and to help creating jobs for our residents R15.9m has been provided for temporary positions, including EPWP workers and seasonal staff.
All items of a Capital nature that can result in job creation for our people have also been included in the budget, particularly where this will address ageing water reticulation systems, as well as sewerage system projects and storm water projects.
The following provisions have been made for these projects in the 2021/2022 Capital Budget:
• Water Reticulation and Treatment R51,9m
• Sewerage System Upgrades R40,8m
• Stormwater Systems R6,5m
• Sport and Recreation R7,7m
• Roads R11,5m
• Zwelihle Library R4,37m
• Public Safety R7,89m
In summary the proposed tariff increases for a household for the coming financial year (2021/2022) is as follows:
Property rates and Municipal Services all increase by 4% and Electricity by 14.59%.
I would like to take this opportunity of thanking the Public for their participation and input during the IDP Review - and Budget preparation process.
I also wish to extend my sincere appreciation to the Councillors and Ward Committee members for their contribution to the budget. My sincere thanks also to the Municipal administrative staff for the hours of work that they have put into preparing this budget over many months and at times under very challenging conditions.