GA-MASEMOLA – The water services challenged Sekhukhune District Municipality (SDM) has announced that its total annual revenue budget in the 2021/22 financial year amounts to R1.5 billion, a decrease of about 7 percent from the 2020/21 financial period.
The district municipality which has been marred by water crisis for years assured residents that was expected to increase back to R1.6 billion and further to R1.7 billion in the 2022/23 and 2023/24 financial years respectively.
No additional COVID-19 equitable share was allocated to the municipality for the 2021/22 financial period. For the 2021/22 financial year, tariffs have been increased by 10 percent to have a cost reflective tariff structure as compared to a decrease of 8 percent in the 2020/21 financial years.
According to the district municipality with four local municipalities under its jurisdiction, the aim of the 8 percent tariff reduction in the 2020/21 financial year was to help vulnerable groups, including businesses, to mitigate effects of the economic impact of the pandemic and relieve them for the purpose of consumer confidence enhancement.
Stanley Ramaila, SDM Executive Mayor, said the R1.5 billion total annual revenue budget constituted an allocation of R1.4 billion in government grants and subsidies and R113 million in own revenue sources for the 2021/22 financial year.
Ramaila made the announcement in his budget speech during a council seating in Ga-Masemola on Thursday, 20 May 2021.
The executive mayor said that the municipality’s own revenue sources included the interests earned on external short-term investments at R17.5 million, and service charges at R95.5 million.
“The R1.4 billion allocation from government grants includes the R878 million in Equitable Share, R2.3 million for the Finance Management Grant, R8.1 million for the Expanded Public Works Programme, R2.3 million for the Municipal Infrastructure Grant. The annual expenditure budget of our district in the 2021/22 financial year also amounts to R1.5 billion in total. The R1.5 billion total annual expenditure budget constitutes an allocation of R1.1 billion in operational expenses and just over R400 million in capital expenditure for the 2021/22 financial year, explained Ramaila.
The office of the Executive Mayor has been allocated an amount of R42.2 million. The Municipal Manager’s office will receive R73.7 million. The district’s mostly challenged Infrastructure and Water Services Department (IWS) has been allocated the lion’s share of the budget at R531 million. This amounts to 48 percent of the total operating expenditure. Budget and Treasury receives second highest chuck of the budget allocation at R201 million.
Community Services and Corporate Services departments will each receive R70.9 million and R125 million respectively. Sekhukhune Development Agency (SDM) was allocated R4.5 million of the total operational expenditure. Planning and Economic Development Department have been allocated R16.6 million.
“The operational expenditure among other things includes the bulk purchase of R130 million for operations and maintenance, R40 million payment to ESKOM, R61.1 million for repairs and maintenance of our water infrastructure, and R100.1 million for depreciation and impairment on projects that are vandalized and destroyed by some of our communities. R6.8 million has been allocated for the legal expenses while just over a million rand was allocated for both external and internal bursaries,” informed Ramaila.
The district municipality informed that its current total allocated funds for salaries were at 42 percent of the total operational cost. The total annual capital budget for the district is R424 million for 2021/22 financial year. The annual expenditure is funded through the R413 million in Municipal Infrastructure Grant, R2.3 million in Rural Road Asset Management System Grant and R8.1 million in own revenue funds.
“This expenditure includes allocation of R3.9 million on water carts, R2.2 million on the purchase of offices in Elias Motsoaledi and R1 million on computer equipment. Overall total capital expenditure from conditional grants decreased from R505 million to R424 million in the 2021/22 and 2020/21 financial year. WSIG allocation has decreased from R53.4 million to R50 million in-kind while MIG and RRAMS are allocated R413.6 million and R2.4 million in the 2021/22 financial year. The municipality has budgeted an operational surplus of R1.4 million for the 2021/22 financial year. The operational surpluses in both 2022/23 and 2023/24 financial years are both budgeted as R1.6 million and R400 thousand respectively,” added Ramaila.