The budget to restore the faith in uMngeni Municipality

31 May 2022 in Where We Govern

Please find below the speech by his Worship the uMngeni Mayor Cllr. Chris Pappas

Madam Speaker, deputy mayor, councillors, Ndabezitha, Acting Municipal Manager, officials, and members of the public.

Thank you for joining us on this occasion of the first full budget of the new administration.

The Canadian Astronaut, Chris Hadfield said, “ultimately, leadership is not about glorious crowning acts. It’s about keeping your team focused on a goal and motivated to do their best to achieve it, especially when the stakes are high, and the consequences really matter. It is about laying the groundwork for others’ success, and then standing back and letting them shine.”

We set out 6 months ago to provide leadership and direction to an institution that had for a long time been abandoned by ethical-political vision. We said that our goal was simple, to restore faith in the uMngeni Municipality and in democracy as a vehicle for change. We would do this by focusing on the basics and prioritizing the people.

This budget comes at a time when the municipality is undergoing an internal transformation with policy reviews and restructuring all while rebuilding the capacity of the municipality to deliver. Officials and councillors alike have been working to plug the holes, turn off the taps and put out fires. We have committed the uMngeni Municipality to become a leading local government, setting the pace and the trends for service delivery in KwaZulu-Natal.

Of course, there will be challenges. There will be mistakes. There will be triumphs and there will be opportunities missed. This is the dynamism of local government, working with communities and of course the ever-shifting sands of political opportunism. But at all times we will remain focused on the motivation that led us here and the line that we must repeat to ourselves every day: “We are here to improve the lives of the people and that we are here for sacrifice and not status.

Our Integrated Development Plan has been completed. This document sets the tone and direction for our next 5 years. A lot of time and effort has gone into making the document as progressive as possible while at the same time incorporating as many views and inputs as possible. I would like to thank Mr Makhaye and his team for their hard work in this regard.

The new administration committed to 5 key basics:

1)    Transparent, accountable and fair government

2)    Focusing on infrastructure maintenance and investment

3)    Building safer communities

4)    Waste and the environment

5)     Jobs and a growing economy

We have set new performance indicators and adopted a performance management policy and Standard Operating Procedures for performance management. Our focus is impact and outcome oriented governance. Once completed, our service delivery charter will also work to strengthen our inward and outward-facing institutional culture. I look forward to this document in the next few months.

Madam Speaker, to achieve all the plans in the IDP we said that our first task would be to stabilise municipal finances. In November we face a bleak financial outlook. The municipality had been flagged as being at risk and something drastic needed to happen before it was too late.

It gives me great pleasure to say that we are no longer in crisis mode as the uMngeni Municipality and that the financial situation has improved significantly. Some highlights include:

  •      R16 million collected from outstanding debtors
  •      R5 million better month to month performance on revenue
  •      No Eskom debt
  •      Cash on hand has increased from R6 million to R9 million (0 months to 1.5 months)
  •      We have grown the indigent register from 133 people to 1155 people
  •      Grant funding has improved significantly, and most projects are now complete are almost complete
  •      Established an unauthorized, fruitless and wasteful expenditure policy
  •      Established a cost-containment policy

Today we will be fully capacitating our Audit Committee as well as establishing a Municipal Financial Disciplinary Board. These structures aim to tackle past and future maladministration, corruption and fraud. There are SIU cases, section 106 reports, internal whistleblowers and general wastefulness that we can begin to tackle through strengthening these and other accountability mechanisms. We have and will continue to review our current contracts and ensure that the municipality is getting value for money and that no side deals are being made for the benefit of politicians or officials.

Madam speaker for the first time uMngeni has achieved something quite significant. It has become custom that when the equitable share is paid to the municipality the money quickly disappears and is committed to paying creditors. This is a result of poorly performing own revenue generation and collection. However, I am pleased to say that R30 million was paid to the uMngeni Municipality at the end of April and at the end of May those funds have not been touched. This will allow us to generate interest from those funds, improve credit ratings, cushion the municipality against disasters and begin to build up reserves for bigger and better things in the future. This means that the uMngeni Municipality has in 6 months managed to secure an interest-bearing investment of R30 million. I would like to thank and congratulate the finance department, Mr Hloba and Cllr Passmoor for this great achievement.

An equally as impressive achievement is the completion of the draft valuation roll in record time. Mrs Nzuza, Mr Zungu and others have been hard at work rectifying the mess that we inherited. The importance of the valuation process cannot be overstressed. A process that usually takes a year has been completed in one and a half months. This is truly impressive. It will now go out for public comment and be closed at the end of June to be implemented on 1 July. Colleagues, the significance of this is that there is potentially another 5 to 8 million Rand in revenue that that municipality may have access to. This would be a big booster for service delivery.

There are still a number of challenges to overcome in bringing about financial stability including more aggressive consequence management for abuse of funds. I am pleased that we are making progress on a number of internal investigations and that structures such as the internal audit committee and the municipal financial disciplinary board should have their full complement of members by the 1st of July 2022. There is still a window for those who have abused the finances of the municipality to quietly slip out before the investigations move to a different intensity.

Madam Speaker, I would like to use this opportunity to thank a few people before expanding on the budget for 2022/2023.

  •      Firstly, is the Deputy Mayor for his loyalty, support and reliability. Young people are leading DM, and we shoulder that responsibility together.
  •      Cllr Passmoor and Cllr Lake for their leadership on their committees and hours of hard work in the background.
  •      The executive committee for the robust debates and progressive decisions
  •      To you madam speaker for your steady hand on the wheel of the council ship
  •      Mr Hloba, your dedication, knowledge and principled approach to the position is most appreciated.
  •      To our general managers and the teams that you lead. Thank you for the sacrifices and the dedication.
  •      The councillors of the governing party, thank you for your patience, ideas, support, and vision.
  •      And lastly, to the Democratic Alliance, a party that has rooted us all in services, transparency, ethical leadership and unrelenting pressure to see the lives of the people of South Africa improved.

Budget 2021/2022 has produced a funded budget of R537 million in expected revenue with a surplus of R186 337 after expenses. These public funds must be spent capably and ethically, and we must play our role of oversight and leadership very well to ensure that these funds are spent on the people and for the people of uMngeni.

R31 million or 6% has been allocated to maintenance, this is up from 4.9% in the last financial year. We are slowly increasing our maintenance budget to 8% as per the Treasury guideline. R41 million is set aside for capital investments. The municipality is well within the range for expenditure on staff-related costs (salaries and associated costs) with 25% of the budget spent on this item. Our largest single line item is bulk purchases which sit at 30% of the budget or R160.3 million. This is largely for Eskom.

Madam speaker the municipality remains committed to advancing social and economic opportunities. Some of the highlights of this budget:

  •      R600 000 has been allocated to Agriculture development
  •      R300 000 towards SMME development
  •      R800 000 towards tourism
  •      R700 000 towards informal trade
  •      R220 000 to assist poor households with burials
  •      R334 000 towards social programmes such as HIV/AIDS, senior citizens, and people with disabilities

In addition to this we have allocated the following amounts to support social partners who directly assist us:

–        R277 000 towards the SPCA for animal care

–        R350 000 towards Working on Fire to burn fire breaks

–        R200 000 towards Love Cities Network

–        R150 000 towards the Lions River Fire Protection Association

These funds are allocated to increase the access to economic opportunities for the people of uMngeni.

R1.45 million has been allocated to Youth Development with the following programmes making up some of that allocation. An increase of R450 000:

  •      R100 000 towards providing free public wifi hotspots
  •      R100 000 towards bursaries
  •      R100 000 towards assisting with tertiary registration
  •      R100 000 towards small business development
  •      R300 000 towards sports, arts and cultural development
  •      R36 000 towards an agricultural empowerment programme

In addition to this, the municipality will make available R250 000 towards hiring interns to provide in-service training. Over time we hope to increase this budget further.

In most communities, the deteriorating condition of the road network (gravel and tar) was identified as a major concern. To keep to our commitment to rebuild infrastructure and address our community’s concerns we have dedicated:

  •      R16 million towards contracted maintenance
  •      R5.3 million towards roads rehabilitation
  •      R1 million towards internal materials for repairs
  •      An additional R1.5 million towards salaries to increase internal capacity by hiring staff

A total budget of R23.8 million (excluding operating costs) has been allocated to roads.

R31 million will be spent on maintaining and upgrading electricity infrastructure with a further R15 million being spent on phase 1 of the new Mpophomeni substation which will assist to stabilize that grid.

Other important service delivery items include:

  •      R1.5 million towards grass cutting
  •      R100 000 towards swimming pool maintenance
  •      R1 million towards maintaining halls
  •      R3 million towards our workshop in order to service our fleet
  •      R5 million for operations at the landfill site

Madam Speaker as a grant dependent municipality it is important for us to continuously look for ways to improve the lives of the people of uMngeni through alternative funding models. In this regard we will be spending the following amounts:

  •      R4 million on upgrading streetlights
  •      R4.7 million on upgrading informal settlement
  •      R24 million in MIG funding which we hope to use to purchase plant and equipment for our dumpsite
  •      R3.5 million human settlement upgrade

It is no secret that the uMgungundlovu District Municipality continues to struggle financially and in terms of management. This has a severely negative impact on our communities with people going days without water. To intervene in this situation and try to improve the lives of the people, especially rural communities, we have allocated R150 000 towards drilling boreholes. Depending on market prices at the time this should enable at least 2 boreholes to be drilled.

Our staff and their wellbeing are very important to us. In order to develop our staff further, we have allocated R200 000 towards paying for bursaries and R600 000 for skills development and training. In addition to this, we have also allocated R150 000 for employee wellness. We have also significantly increased the allocation for uniforms, protective clothing and specialized equipment. As an example, the waste department will receive R200 000 to support their staff.

We have committed R75 000 towards community safety initiatives. This is to support CPFs and other organized crime prevention initiatives. This is a first for uMngeni.

We are aware of the electricity crisis that faces the residents of Hilton and has allocated R150 000 towards legal and consultant fees to assist with the takeover of Hilton electricity. This is not a short-term solution but involves a much longer-term plan. However, we are committing to moving things forward.

The Curry’s Post landfill site has some serious challenges. To show our seriousness in turning the site around we have allocated an additional R5 million to rehabilitate the site. This is on top of the existing R5 million bringing the total interventions to R10 million.

We are investing in our IT infrastructure with more than R2 million in additional funding being allocated to capacitating our IT capabilities. This includes R300 000 on servers and R1 million in different software. We are investing in digitizing the building’s plans as part of this process.

Madam Speaker, I am incredibly excited to announce that we have put in place mechanisms to support the members of the public from rising costs of living, poverty and socio-economic conditions. We have increased the number of free basic electricity units from 50 to 150. We have increased the threshold to qualify for indigence from R3500 to R5000. We have also increased the pensioner rebate threshold from R11 500 to R13 000. Through our budget policies, we have also provided much-needed relief to ratepayers who have seen an increase in their property prices. We have decreased the rate range by 25% from 1.7 to 1.2, we have also added the following discounts/rebates on top of the primary rebate in recognition of Covid-19, the July riots and the poor economic conditions. Each of the following categories will receive an additional:

Urban residential – 2.5%

Rural residential – 20%

Urban business – 20%

Rural business – 30%

Urban hospitality and tourism – 20%

Rural hospitality and tourism- 40%

Industrial – 10%

Mining – 10%

Vacant – 10% -25%

Agriculture – 82.5%

As an added cushion against increases, we have increased the capital exemption from R120 000 to R130 000. This means that the first R130 000 on a property value will not be rated.

For the first time, the municipality will also offer all property owners who are over 60 years of age a 10% discount on the application on the primary property. There is a further 20% for those seniors who have an income of R13 000 or less.

As a caring municipality, all those registered on our indigent database will get a 100% rebate as well as a 100% rebate for child head households.

As we continue to tackle electricity losses, we have also decreased the cost of converting conventional meters to prepaid meters and we have also committed to replacing broken or old meters free of charge for those who are indigent.

The municipality will today also pass an investment and attraction policy that will offer a wide range of discounts and incentives for businesses wanting to invest or expand their operations in uMngeni. This policy aims to ensure that uMngeni becomes the premier small-town investment destination in KwaZulu-Natal.

This budget is in all essence a progressive and all considered budget. It shows the commitment of the new administration to grow the economy, clean our communities, build safer communities, and fix our infrastructure. Once again, I would like to thank all departments, the Councillors, and Mr Hloba.

I also once again thank the Democratic Alliance for allowing us the opportunity to serve the people of uMngeni and build a better future. It gives me great pleasure to table the 2022/2023 budget on behalf of the people of the uMngeni Municipality.

Let us keep making progress together.