2015/2016 Budget Speech

2015/16 budget speech

2015/16 budget speech

Radio interview at Vaaltar FM

Radio interview at Vaaltar FM

2015/16 budget speech

2015/16 budget speech


 

Honourable Speaker,

Honourable MECs,

Honourable Mayors and Speakers of our local municipalities,

Honourable Councillors,

Municipal Managers,

Partners in local government,

Members of the media,

Distinguished guests,

Ladies and gentlemen,

 

Mr Speaker,

 

I have the honour to present the fourth budget of our five year term of office, which is coming to an end before 18 August in 2016.

Councillors and the entire Frances Baard district community, we are enjoined by the Constitution of the Republic, in its section 156 and amongst others, to provide democratic and accountable local government to our communities as well as to ensure the provision of services to our communities in a sustainable manner. This is particularly magnified by the historic celebration of the Freedom Charter whose 60th anniversary is observed by our country and the entire democratic and progressive peoples

At the advent of our term of office we made a commitment to serve this district and its people to the best of our ability and to ensure that we strive towards excellence and the betterment of the living conditions of our people. Even though we experienced challenges, we managed to focus on the alignment of municipal services to the objectives and key performance indicators of the integrated development plan, through which we derive the mandate from our communities.

 

We have realised early the benefits of co-ordinating our administrative, financial and technical resources to ensure that we make full use of our limited resources to improve the lives of our communities. As a municipality we have been blessed to be part of a shared service model which does not put any financial obligation on our local municipalities. This is based on an understanding of the economic realities that confronts, especially, our three smaller local municipalities. We now have service level agreements with our local municipalities in areas of internal audit, financial services, technical support services, information communication technology, town planning, performance management and integrated development planning. This enables all the municipalities within the district to share and leverage on each other’s best practice model.

 

We have strengthened our governance structures to ensure accountability on how we administer the municipality and respond to our communities. Our public participation plan, which we adopted in September 2014, has been proven to be yielding results as meeting with communities have assisted us to communicate on what is expected of us and what the community expect to hear. Our audit committee has also assisted us in ensuring that we abide by good governance practices that are embedded in this institution and meet our constitutional, and most importantly, a fiduciary duty to execute our set mandate.

 

In the same breath, for the 2014/15 FY we wish to account, amongst others, on the following:

 

We spent R30 million on infrastructure improvement in the district during the current financial year. Of this amount R20 million was directed towards eradicating backlogs and providing infrastructure as well as procuring machinery plant and equipment to improve service delivery. This amount was divided equally among the four local municipalities and the following was achieved:

 

  • The increase in the sanitation fleet of Dikgatlong Municipality and repairs to electrical and water infrastructure.
  • We completed the master plans for electricity in Dikgatlong Municipality, and upgraded some roads as well as bulk water and sanitation in Phokwane Municipality.
  • The upgrade of electricity for Dikgatlong Municipality.
  • Improvement of the provision of bulk water infrastructure in Ritchie, as well as the resealing of two water resources in Phokwane Municipality.

An EPWP-coordinator was also appointed to coordinate job creation and the district municipality managed to create 94 jobs during the past year. An EPWP grant of R1m was received and the total amount will be claimed by year-end. We need to maximise this co-ordinating role to ensure a district wide job creation strategy.

 

The emphasis in the current financial year has been towards addressing the apartheid legacy of spatial patterns and injustice, especially in the human settlements environment and we have commenced the implementation of objectives of the Spatial Planning and Land Use Management Development Act (SPLUMA) 2013. We have managed to prepare the spatial development framework for the district municipality as well as for both Magareng and Dikgatlong local municipalities. This year has also seen the completion of the required environmental studies (EIA) for township establishment in Dikgatlong local municipality and cadastral survey, pegging and registration with the Surveyor-General will commence from 2015/16.

 

Through the finalisation of these plans we will ensure that spatial development takes place in these areas will improve the quality of life of our communities. As you might know spatial planning greatly influences our environment and is therefore of strategic importance.

 

An amount of R702,930 was spent for the preparation of SDF/Integrated Zoning Scheme and EIA studies for Magareng and Dikgatlong municipalities respectively.

 

In the 2015/2016 financial year the objective is to enhance the implementation of SPLUMA by facilitating the preparation of the SDF for Sol Plaatje Municipality and the development of township establishment in Phokwane and Dikgatlong municipalities respectively. An amount of R2,337,000 has been earmarked for this purpose. We will be completing the integrated zoning schemes for Magareng local municipality and in that way ensure that this municipality use erven in its area for a correct use and to its full potential.

 

Our preparations for the implementation of the Spatial Planning and Land Use Management Act (SPLUMA) is being completed and all appropriate structures such as the municipal planning tribunal will be put in place in the coming financial year. With the exception of Sol Plaatje, we have taken a decision to have a joint municipal planning tribunal with our local municipalities. We will be assisting our local municipalities to prepare and adopt the necessary bylaws required for the implementation of SPLUMA in the 2015/16 financial year. Through our GIS, we are finalising the data cleansing project for the Dikgatlong local municipality and this will ensure that this municipality can prepare a much more focussed revenue enhancement strategy.

 

Throughout the world it has been found that SMMEs play a critical role in absorbing labour, penetrating new markets and generally expanding economies in creative and innovative ways. SMMEs are an important vehicle in addressing the challenges of job creation, economic growth and equity in South African society. SMME development is recognised by the National Development Plan as cardinal for dealing with challenges of poverty, unemployment and inequality.

In his Northern Cape Budget Speech for 2015, the honourable MEC John Block stated that “It is crucial that as government we invest in our youth to ensure a skilled and capable workforce to support government priorities.” In her 2015 state of the province address the honourable Premier Sylvia Lucas also stated that “The small, medium, micro enterprises (SMME) sector is one of the major contributors to the country’s gross domestic product (GDP), and thus equally contributes to economic growth as well as one of the key job drivers in the new growth path.”

 

Mr Speaker, I want to concur with these statements and confirm that we embrace it even more so as we as a district municipality continue to invest in preparing young graduates for the job market through our internship programme. Bi-annually we have an intake of approximately 20 – 25 interns in the field of tourism, local economic development, finance, information technology and internal audit. Through local economic development initiatives we focus especially on youth development through capacity building and empowering of SMME’s.

 

The Youth Entrepreneurial Development Programme is an ongoing initiative to develop LED practitioners and SMMEs out of young graduates who studied Commerce. The graduates are exposed to business opportunities and actual LED work to equip them with skills that will help them be successful in business or to find employment. Currently 12 SMMEs are being trained through the New Venture Training programme.

 

We have taken a conscious decision to establish a mayoral financial aid fund for young people to improve the skills levels in our district. In the current financial year, we have assisted 24 students in the district to study in various institutions of higher learning.

 

The district undertook an exercise to develop a policy to support sustainable SMME development in the district. The main objective of the FBDM SMME Development and Support Policy is to provide a framework for SMME development in the district through an integrated system of business support facilities. The policy directs how local municipalities, supported by the district municipality, should support SMMEs. In this way we will ensure that there is maximum impact instead of many uncoordinated efforts.

 

Through this directed and coordinated effort, the district will be able to create the required conducive environment for small business and entrepreneurship development in the district. The policy seeks to address the main challenges and constraints faced by SMMEs as well as to provide a guideline on interventions and programmes to ensure the necessary conducive environment is created.

 

The policy further aims to ensure that the SMMEs have the necessary resources (technical skills, soft skills, machinery and equipment) required. The review process formulated a Local Economic Development Strategy based on the identified development needs, opportunities, competitive and comparative advantages to inform and guide Frances Baard District Municipality and its local municipalities to facilitate development.

 Through the strategy we will unlock the economic development potential of the area, encourage private sector investment and create a conducive environment for enterprise development and job opportunities for the community. Through this integrated approach to SMME development and LED strategy, we aim to thrust the district’s economy onto a higher trajectory. One where the economy is diversified, productivity is enhanced, investment is stimulated and entrepreneurship flourishes.

 

We took a decision to utilise our full potential to market the district as a tourist destination, hence the inaugural stand at the Tourism Indaba in Durban this year. The Tourism Indaba is one of the major events on the tourism calendar and we saw it as an opportunity to market more extensively what the district has to offer in terms of tourism attractions. By so doing we will ensure that we tap into the tourism sector, which is a major contributor to the Provincial GDP and will boost the local economy.

 

Mr Speaker, in terms of the “back to basics” approach the district municipality is on track with the five pillars as identified by the approach. The district municipality is well within the acceptable levels regarding areas such as the delivery of basic services as we support our local municipalities both financially as well as technically. We have to work better with our local municipalities to complement their back to basics action plans.

 

We have assigned an engineering technician to each of the three smaller local municipalities and we are continuing our assistance according to the signed service level agreements that is in place. Our financial management system is also sound and we continue to have credible financial statements.

 

Mr Speaker, the district municipality managed to once again achieve an unqualified audit opinion with no matters of emphasis for the 2013/14 financial year. This is a great achievement for us, and yet we cannot fully bask in this glory whilst our local municipalities are not enjoying the same achievement. It is our intention to get our local municipalities to also record an improvement in their audit outcomes.

 

We have set aside R1,5m to support our local municipalities with financial service related matters including requests received and to ensuring that their financial systems are Standard Charts of Account (SCOA) compliant by 2017. In February and April of this year Council approved an amount of R2,8m to assist Magareng local municipality to meet its financial obligations (R2,2m for Eskom and R600,000 for the 2016 valuation roll).

 

On 19 March this year we re-launched the Frances Baard District Aids Council in order to strengthen our response to combat the pandemic and to realise the objectives of the Provincial strategic plan. Through the district aids council we will continue to engage with all relevant stakeholders to draw up integrated programmes to ensure that we combat the scourge together. We will work closely with the district aids coordinator seconded to the district municipality by the Office of the Premier.

The aids council also received a grant of R500,000 to continue with its work. We want to express our appreciation for the continued collective efforts by all levels of government in the fight against HIV/AIDS.

 

In the 2015/16 financial year the district municipality will have access to the rural roads asset management systems grant. The grant is intended to assist municipalities to establish a municipal road asset management system which will allow for the management of the municipal road network (including bridges), assess asset condition and the traffic carried by these assets.

 

Our level two accreditation status in the housing development function bestows us with the responsibility to plan and manage all human settlements in the district, with the exception of Sol Plaatje municipality projects. All budgeted projects for this financial year are progressing well and are on schedule. The following is the picture of housing delivery in the three local municipalities:

 

  • The target of 100 houses in Magareng has been achieved.
  • In Phokwane local municipality all 50 houses planned for Kingston have been completed and 224 houses for Pampierstad were completed.
  • The project for the Buffer Zone in Dikgatlong local municipality kicked off amidst several challenges and currently 5 houses are completed. The 147 houses for Stillwater have been completed. Monthly site meetings and quarterly project steering committee meetings continues and regular consumer education workshops were conducted for the current financial year.

 

Mr Speaker, we have reason to pat ourselves on the back in terms of what we have been able to achieve with housing. In August 2014 we won the national award for the best level 2 accredited district municipality in South Africa at the National Govan Mbeki Awards and at the recently held Provincial Govan Mbeki Awards in April 2015 we were first runner-up for the Provincial best level 2 accredited municipality.

 

Mr Speaker, I now wish to return to the business of the day.

The budget for 2015/16 represents the penultimate budget for the current Council. We have worked for many months to find the right balance of measures to maintain support for our local municipalities to provide basic services to the people of this district. The Municipal Systems Act requires us to ensure financially and economically viable municipalities guided by the strategic planning instrument, the IDP.

 

At this stage, it is common cause that the Frances Baard District Municipality is grants dependent. 91% of the total revenue, the bigger portion of which is the equitable share is determined by the growth rate of the Gross Domestic Product. The district municipality collects own revenue anticipated at 9% of the total revenue for the 2015/16 financial year.

 

The district economy is mainly primary based and dominated by the Sol Plaatje’s economy. Sol Plaatje municipality remains the biggest contributor to the economy of the district. The major revenue streams that support the programmes and activities of the district municipality remains government grants and subsidies, interest earned on external investments and actuarial gains.

 

Allow me now to take you through a more detailed presentation of how we propose to invest the funds that have been entrusted to us.

 

The total budget for the 2015/16 financial year is R168.49m. The operational budget is R155.1m (40 million of which goes to the capital expenditure of our local municipalities as well as R17,032m for special projects for both the district and its local municipalities. The capital budget for the district municipality is R13.39m. The anticipated deficit is R37.96m, which is mainly as a result of R30m budgeted for the capital projects as well as R10m budgeted for operation and maintenance. The largest portion of the budget is allocated to the Planning & Development and Infrastructure Services Departments. Allocations to these departments amounts to R78.43m and is directly linked towards the improvement of the quality of life of communities in the district. This includes R41.32m for infrastructure development and repairs and maintenance at local municipalities.

 

The extent of our support and investment in service delivery to our communities can be seen in the allocations made to our local municipalities. For the 2015/16 financial year we will be allocating and amount of R5m each to Dikgatlong and Sol Plaatje and R10m each to Phokwane and Magareng local municipalities for infrastructure development and a further R2.5m each for operation and maintenance.

 

The above allocation will include the following major infrastructure projects:

  • In Phokwane: Refurbishment of the old oxidation pond system and the upgrading of the outflow line at the Jan Kempdorp Waste Water Treatment Works, fencing of Hartswater Water Treatment Works, a master plan for bulk water and sanitation infrastructure including a maintenance plan, a water conservation and demand management strategy, and water and sanitation for 608 stands in Guldenskat;
  • In Magareng: The provision of sewer reticulation network for 558 sites in Warrenvale will continue, and we will also be procuring a TLB and a sanitation truck;
  • In Sol Plaatje the main focus will be on bulk water supply in Ritchie/Modderrivier; and
  • In Dikgatlong: Replacement of steel/asbestos pipes in the water reticulation network in Barkly West and we will also be increasing their refuse removal capacity.

 

In terms of Operation and Maintenance the focus will be as follows:

  • In Phokwane, Magareng and Dikgatlong: the maintenance of water and waste water treatment infrastructure, electrical infrastructure and maintenance of streets and stormwater infrastructure
  • In Sol Plaatje: the maintenance of the Platfontein sanitation system and the maintenance of gravel roads.

 

For local economic development and tourism an amount of R3.03m and R3.44m has been allocated respectively. In terms of spatial planning R2.34m has been earmarked for the surveying of erven in Dikgatlong municipality; the development of a spatial development framework for Sol Plaatje municipality; the development of bylaws for three of our local municipalities; a CBD renewal plan for Magareng local municipality; township establishment for 450 erven in the Phokwane area and 200 erven in the Dikgatlong area.

 

A further R9.1m has been allocated to special projects in other divisions such as finance, human Resource, disaster management, environmental health and GIS. R1.69m has also been budgeted for replacement and acquisition of the Council motor vehicle pool.

A large portion on the usage of motor vehicles is to service our local municipalities through our different functions. Vehicles that have reached disposal stage are donated to our local municipalities in terms of our supply chain management policy.

 

Mr Speaker, grants and subsidies are still our biggest source of income and we are at R106.51m for 2015/2016. This dependency on grants and subsidies influences our expenditure.

The major grant funding that the district municipality is receiving from national government is as follows:

  • Equitable Share: R 98.94m
  • Finance Management Grant: R1.25m
  • Municipal Systems Improvement Grant: R940k.
  • Rural Road Asset Management Systems: R2.15m
  • District AIDS Council Grant: R500k

 

Mr Speaker, as you can see we continue to be a district municipality which focusses most of its resources towards the support of our local municipalities and we will continue to do so in order to ensure that we improve the lives and living conditions of the communities that we were elected to serve.

 

In closing I want to share with you the following quote from Jim Rohn, “Don’t wish it was easier, wish you were better. Don’t wish for less problems, wish for more skills. Don’t wish for less challenges, wish for more wisdom.” close quote. We are stronger and wiser and better equipped because of the challenges we face every day, to ensure that we improve the lives of those we serve.

 

Mr Speaker, lastly, I want to sincerely thank all Councillors, the Municipal Manager, the Heads of Department, managers, officials, stakeholders and members of the public who gave input to this process. I believe that this was a team effort and by sharing credit and thanking all involved I know we will have more of your dedication and support.

I thank you

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