KNYSNA NEWS - During a special council meeting on March 30, Knysna mayor Eleanore Bouw-Spies tabled the first draft medium-term revenue and expenditure framework (MTREF) for the municipality under the current political leadership.
“The draft budget tabled here today is a beginning step in attaining the strategic goals of the national development plan (NDP) as well as that of Knysna municipality, which includes among others, municipal transformation and organisational development, basic service delivery to all our communities, financial viability and transformation, excellence in administration, transparency and public participation. I am convinced that it will contribute to our new vision: Inclusive… Innovative… Inspired,” said Bouw-Spies.
The framework gives direction to the administration on how the municipality can realise the requirements that were defined and articulated during a February 2017 council strategic session.
“The MTREF speaks to inclusive economic growth that would provide sustainable jobs and broaden the local tax base, among others,” explained Bouw-Spies.
She added that a critical consideration of this inclusive economic growth would be to position Knysna as an investment destination of choice, enhancing Greater Knysna’s potential, diversifying the local economy and changing the ownership patterns within the current primary and secondary sectors of the economy in accordance with national essentials.
“We must all recognise that promoting economic development in the Knysna area necessitates an informed consideration of the global, national, provincial and regional economic environment,” she said.
Bouw-Spies highlighted economic indicators that were considered in the municipal financial strategies, preparation of the MTREF for 2017/18 and the two outer years. “The global recovery from the 2008 financial crisis remains risky, with growth forecast at 3.1% in 2016 and 3.4% in 2017,” she said.
She added that the municipality will need to improve its efforts to limit nonpriority spending and to implement stringent cost-containment measures. “In this MTREF we have ensured that we eradicate nonpriority spending and reprioritise expenditure to focus on core infrastructure and service delivery,” she said.
According to Bouw-Spies, infrastructure is viewed as an important means of promoting sustainable growth and reducing poverty. “As we all have seen with conditions of our roads, current water challenges and continued tripping of electricity, that provision of economic infrastructure is the only necessary condition for economic growth in the Greater Knysna municipal area.”
The total funded capital projects for this period amount to R123.1-million.
• Water infrastructure R27.7-million
• Electricity R23.8-million
• Sanitation R10.6-million
• Roads infrastructure R9.7-million
• Refuse removal R1.2-million
Bouw-Spies said the capital budget is funded by means of grants from national government to the tune of R32.6-million, provincial grants totalling of R22.6-million, loan funding in the amount of R36.6-million, and other funding totalling R31.1-million.
“The operating budget for the 2017/2018 financial year amounts to a surplus of R51.6-million, which represents a decrease of R26.7-million or 34.1% under the 2016/2017 adjusted budget,” she added.
• 7.5% increase in the wage bill in accordance with the multi-year wage agreement.
• 0.31% increase in the purchase of electricity from Eskom.
• Inflationary pressure and the general increase in the price of goods and services.
• Continued increase in fuel prices.
• Operational requirements to ensure service delivery standards are complied with, this is specifically in regard to water and waste water, electricity and roads.
• Housing allocation for the construction of houses is R55,766-million.
Revenue sources remain under strain, the mayor said, and to balance service delivery with affordability, proposed tariff increases had been limited (as below).
• Electricity 2.2%
• Water 6%
• Sewerage 6%
• Refuse removal 12%
• Assessment rates 6%
According to Bouw-Spies, provision is made in the operating budget for the subsidising of indigent households. This subsidy includes a free 6Kl of water, 50 units of electricity, and a 100% subsidy for refuse removal and sewerage charges.
“A 100% rebate on assessment rates will also be given for indigent households. The subsidy allowed exceeds the national norm and stretches the affordability threshold of the municipality,” she said.
Bouw-Spies concluded by requesting all members of her mayoral committee and all councillors to contribute to this draft budget as they engage in the community participation process. She added that the municipal manager and his team will be available and will continue to provide administrative support.
“All members of the ward committees and members of the public, as well as all relevant stakeholders are to ensure that they participate fully and make meaningful and valuable contributions in the budgeting process,” Bouw-Spies said.
“I would like to re-emphasise my request and invitation to all stakeholders to contribute to the public participation process before the budget is submitted to council for the final approval,” Bouw-Spies concluded.
Council during the tabling of the draft annual budget for the 2017/2018 financial year. Photo: Supplied
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