Swellendam Municipality Mayoral Budget Speech: 2021-2022
Budget Speech by the Executive Mayor
Mr Deputy Mayor
Members of the Mayoral Committee; Fellow Councillors;
Municipal Manager and Senior Management; Members of the public
It gives me great pleasure to present the 2021/2022 Budget for Swellendam Municipality. In so doing, please allow me to make a few observations.
This will be my tenth and final budget speech as Mayor of Swellendam municipality.
I am gratefull to have been afforded this opportunity. Back in 2011 when I took on this responsibility I did so with a firm commitment not only to improve the lives of our residents, but also to restore the long-term financial viability of the municipality.
Only time will tell to what extent this endeavour has been successful but I am hopefull that history will look kindly on this particular period in the development of Swellendam and her people.
This budget builds on the work done by this administration over the past four to five years.
A budget must give expression to the strategy and policies of the Council, but it must also demonstrate our ability to impact positively on the lives of our people. In short, a budget is not just about numbers, but more importantly it should be the instrument which facilitates positive change for all of our diverse communities.
Mr Speaker, I am therefore pleased to be able to present a budget which promotes job opportunities,
a budget which is firmly based on good, affordable service delivery,
a budget which provides for the upkeep and improvement of vital infrastructure,
and a budget which has at its very heart a system of good governance, transparency, and accountability.
The economic outlook for our municipality and the country remains uncertain and complex. The consequences of the pandemic are far-reaching and it will continue to affect every town and every community in South Africa for many years to come.
Aiding economic recovery and protecting jobs are critical components of our short to medium-term strategy for growth and development.
However, the economic recovery that we all so dearly desire depends partly on vaccinating as many people as quickly as possible. This is to allow for increased tourism and other business activities which will contribute to economic growth and job creation. In this regard I would like to thank all of our local health workers and volunteers who are working around the clock to make it happen. Fortunately, in the Western Cape we have the most competent Provincial Government of all, and as a result the citizens of this province are likely to be vaccinated in a much more efficient manner than anywhere else!
Over the next three years, the municipality will have to adjust to significant changes in national and provincial expenditure plans. All municipalities rely on a variety of grants to supplement budgets, especially when it comes to the expansion of infrastructure, improved service delivery, and free basic services for indigent residents.
Considering the negative impact that the large–scale theft and corruption of some Thirty Billion Rand annually by national government and its agencies is having on all three spheres of government, new ways need to be explored to become more efficient with fewer resources.
Fortunately, the residents of Swellendam municipality have the assurance that, given our string of Clean and Unqualified Audits over the past eigth years, every penny of our budget can be accounted for. In this municipality, under DA leadership, we have stopped the corruption, mismanagement, and theft of taxpayers’ money, and we make sure, year after year, that the people’s money is spent on the people, and not on the politicians!
Mr Speaker, since this is my last time in this role I trust that you will allow me the indulgence of briefly looking back at merely some of the milestones of the past few years.
- From 2016 to 2021, we have achieved combined budget growth of 49%, or 10% per annum
- Through good financial management our Capital budget has more than doubled between 2016 – 2021, from R20,5 million to R45,9 million, allowing for the greatest investment in infrastructure in the history of Swellendam. As a result municipal assets have increased by 30% over this period.
- Our safety-net for Indigent support of 2300 households has grown to R23 million per annum, ensuring free basic services to those that cannot afford to pay
- Due to good financial management our payment rate has steadily improved from 89% in 2011 to an average of 99% over the past eight years, thereby ensuring that those who can pay, do in fact pay for services rendered.
- Cash and cash equivalents have increased from R36 million in 2016 to almost R90 million in 2021. The policies of this DA-led administration has achieved this through fiscal discipline, revenue enhancement, and improved collection.
- As a result of good financial management over a number of years the municipality has been in a position to provide meaningfull relief to 56 businesses who were badly affected by Lockdown measures, thereby enabling a quicker recovery and protecting jobs.
- In the past five years this municipality has achieved Four Clean Audits and one Unqualified Audit thereby demonstrating our commitment to effective service delivery, accountability, and transparency.
Mr Speaker, we can be particularly proud of various capital projects throughout the municipality under this DA-led administration. For instance:
In Railton, over the past five years alone, expenditure on roads and stormwater, electrical infrastructure and sporting facilities have amounted to R35 million. In the budget tabled today Railton receives a further almost R20 million for upgrades on infrastructure related to roads, water, electricity and housing.
We can also proudly recall our achievements in relaton to housing in Railton when we won the Govan Mbeki Award for the Best Upgrade of an Informal Settlement Programme (UISP) in the entire country! In the process we spent R68 million and created 560 housing opportunities for the people of Railton, including the first serviced sites ever for this Municipality.
In Suurbraak, over the past five years at least R47 million has been spent on infrastructure and housing. In today’s budget a further R5 million is allocated for Suurbraak’s bulk water supply. All of this will unlock several hundred new housing opportunities for law-abiding residents who have patiently respected the housing waiting list. Individuals who erect illegal structures on unserviced land, and then try to jump the housing-queue by demanding services should never be accommodated at the expense of those citizens who respect the laws of the country.
Buffeljagsrivier has also seen significant expenditure of almost R22 million the past 5 – 6 years related to housing, water, sewerage, roads and stormwater.
In Barrydale over the past five years we have spent R41 million on upgrades to water supply, roads and stormwater, and housing. And in today’s budget a further R14,5 million is allocated for upgrades on roads and bulk water supply, a total of R55,5 million over five years!
In Swellendam itself, the Klipperivier WWTF was built at a cost of R68 million, and the water purification plant was upgraded at a cost R10 million.
One aspect which is of increasing concern is the condition of our roads, and many believe we are simply not doing enough to keep our roads in a reasonable state of repair. I would be the first one to say we should spent more on our road infrastructure but I also know that a greater allocation can only be achieved by slashing expenditure on another service in the municipality.
For the sake of clarity and perspective we need to put the following figures on the table:
We have approximately 35 kms of gravel roads, and 87 kms of tarred or paved roads.
Over the past ten years we have spent a total of R96 million on roads, including speedbumps and intersections. This is made up of R67 million capital expenditure and R29 million operational expenditure, or maintenance. This amounts to almost R10 million per year for the past ten years. This spending trend is continued in today’s budget, and we should continue to make every effort to source additional funding for the upkeep and expansion of our road network.
Coming now to the essence of the budget, some of the main challenges for the 2021/2022 financial year were:
As for water, our biggest concern is the constant pipe-breaks, and water interruptions especially in, but certainly not limited to, Railton. This requires urgent upgrades. A comprehensive business plan is currently being prepared to be submitted to various government departments for additional grant funding to upgrade the total network throughout Railton. In the interim, an amount of R2.5 million is provided in the 2021/2022 capital budget to commence with the replacement of the water pipelines.
Water remains a critical resource, and the public needs to be encouraged to be more circumspect in using this finite resource.
The destruction of municipal infrastructure is of growing concern to the administration, especially when a critical service such as water is affected. The senseless destruction of infrastructure should be addressed by all who value
affordable service delivery, and I appeal to the public to assist us in bringing the culprits to book.
The municipality continues to experience challenges in waste management generally but I am glad to say that there has been a remarkable improvement over the past year or so. The lifespan of the landfill site is coming to an end, and we have limited choices going forward.
An important development is the recent appointment of a Solid Waste Manager, and we look forward to creative solutions for the future of waste management emanating from this appointment.
The municipality is currently engaged in ongoing negotiations with various stakeholders in an effort to find the most cost-effective long-term solutions to solid waste management.
It is unfortunate that some residents continue with the practice of illegally dumping garden refuse, building rubble and domestic refuse at various open spaces which compels the municipality to clean up such areas at great additional cost.
I hereby call on all residents to help the municipality in identifying the transgressors and appeal to all stakeholders to help promote a clean environment and greater civic pride.
Currently, waste collection is running at a loss of R2,2 million. Unaffordable tariff increases are not a viable option to make this service financially more sustainable, but the termination of illegal dumping can contribute to putting this service on a better financial footing.
The total operating revenue of R356,2 million has increased by only 1,3% in the 2021/22 financial year from the previous financial year.
The total operating expenditure for the 2021/2022 financial year has been appropriated at R346,6 million, resulting in an operating budget surplus of R9.6 million. When capital grants are deducted and non-cash entries are added back, a cash surplus of R0,810 million is realized.
Mr Speaker, it is important and praiseworthy to note that the budget presented to Council for 2021/2022 is both realistic and cash-backed. I wish to emphasise that it is a remarkable achievement to continue to deliver high levels of service without a budget deficit or heavy borrowing.
The expenditure on repair and maintenance is R21,6 million which represents 6,5% of the expenditure budget. From this allocation, R3,7 million will be spent on roads maintenance, R1,7 million on the electricity network and R3,1 million on water and sewerage networks.
Bulk purchases are directly influenced by the purchase of electricity from Eskom. The annual price increase of 17,8% has been factored into the budget appropriations and directly impact the revenue provisions. Bulk purchases represent 24% (R84,2 million) of operating expenditure for the 2021/2022 financial year.
Tariff-setting is a pivotal and strategic part of the compilation of any budget. One cannot simply raise rates and tariffs without seriously taking into account local economic conditions, the plight of the poor, and indeed the well-being of all residents. Whilst it might be tempting, especially in an Election year, for some to play politics with rates and taxes, it is of utmost importance that we act with the greatest responsibility in order to safeguard the financial sustainability of the municipality.
Revenue generated from rates and service charges forms a significant percentage of the revenue of the Municipality, namely 63% of the total revenue mix. This high percentage is largely due to the share that the sale of electricity contributes, which is in turn due to the consistently steep increases in Eskom tariffs for bulk electricity over the past few years.
The proposed tariff increases are set as follows:
- Property Rates 6,5%
- Electricity 14,59% (to be finalised by NERSA)
- Water 7% (Average between the scales)
- Refuse Removal 9%
- Sewerage 6%
The combined impact on the municipal account varies between 10,2 and 11,5 per cent mostly as a result of the electricity price increases. If electricity is excluded the impact on the municipal account is 6,8 per cent.
It must be noted that the Customer Care, Credit Control and Debt Collection Policy is amended annually based on inputs received from various community meetings, as well as proposals received from the Mayoral Committee and management. As a government responsive to the needs of our people we are constantly looking at ways of improving our services and policies. I am therefore glad to confirm that a new option for payment arrangements will be introduced to support residents who are not in a position to pay their municipal accounts.
This is further testimony to our willingness to finding payment solutions for those who are struggling to meet their commitments to the municipality.
The capital budget of R49,9 million for 2021/22 is the largest allocation over the past 5 years mainly due to the successful applications we have lodged for new additional sources of funding. The capital budget will be funded from Conditional Grants, our own Capital Replacement Fund and limited Borrowings. The Capital Replacement Fund, which was established as a result of the successful financial recovery of the municipality, will contribute R7,9 million of the capital expenditure.
Council’s continued commitment to improving services to all communities, is clearly illustrated by our undertaking to implement the following important capital projects:
- R5 million: bulk water supply: Suurbraak
- R5,2 million: gravel roads and stormwater: Smitsville
- R5,1 million: bulk electricity: Railton
- R9,3 million: bulk water supply: Barrydale
- R9 million: housing bulk services: Railton
- R3 million: Resiesbaan street: Railton
- R2,5 million: bulk water pipeline: Railton
Mr Speaker, in conclusion, may I say it has been a great privilege to serve the people of this municipality.
I now come to the end of my final budget with a happy heart, and with an enduring optimism for the people of Swellendam.
I want to thank everyone who has made a contribution to making my task easier. I sincerely appreciate the support and goodwill that I have received from all corners of the municipality.
As far as this Budget is concerned may I extend a special word of thanks to our new Director of Finance and her staff for their skillfull and diligent work in producing a budget which meets the highest standards of service delivery and affordability.
I also wish to thank the Municipal Manager for his leadership and advice, and for sharing a vision of excellence for this institution, and indeed to every senior
manager my appreciation for their sustained efforts in lifting our municipality to new heights.
My appreciation also goes to all those Councillors, members of staff, and members of the public who continue to give their very best for the municipality and the communities we serve.
We must continually strive to provide the best possible services at the most affordable price for all.
We must never compromise on good governance, sound financial management, and ethical leadership.
And, we must protect our Clean Audit status because it instills confidence and attracts investment.
Let us now, within the spirit of freedom, fairness, and opportunity for all, work hard to implement this budget for the benefit of all our people.
Executive Mayor 27 May 2021