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The following speech was delivered by City of Cape Town Executive Mayor, Patricia de Lille, at the Council meeting for the tabling of the budget today, 25 May 2016.

Mr Speaker,

Before I begin, I would like to take a moment to celebrate Africa Day.

This is a celebration of our great continent and the heritage, experience, and hopes we all have as Africans.

May God bless Africa and her sons and daughters.

Mr Speaker,

The budget presented today is the final step of the legislated budget process and the final year of our five-year plan from 2011.

It is also another step in the progressive realisation of building a better city for everyone.

While there is still a lot more work to do, this budget demonstrates our commitment to continue the hard work of redressing the injustices of the past with dedication and determination.

Over the past few months, since the tabling of the draft budget, we have been engaging with our communities and our stakeholders in order to make progress possible.

We have presented our budget proposals, which are an expression of our strategic planning as codified in our Integrated Development Plan (IDP), and we have engaged at all levels.

As such, the figures I present today are based on changes and updates that have been made as part of the consultation process.

They are also changes that have been made by submissions from City departments, other governmental organisations, and our structures of Council including the multi-party portfolio committees and the Mayoral Committee.

The rates and tariff structures are:
Rates: an average of 6%, down from 10% last year
Refuse: 7,92%, down from 8,33% last year
Sanitation: 9,75%, down from 11% last year
Water: 9,75%, down from 11% last year
Electricity: an average of 7,78% but only 6,6% for domestic supply, down from 10,82% last year
Disposal at 12,08%

As stated at our last Council meeting, our budget has additional provisions for new projects:
· The Road Congestion Relief Programme

· Park facility upgrades

· Cemetery development

· The development of the Hanover Park Aqua Centre

· Hardening of facilities to reduce security costs

· Investment in our CCTV infrastructure network

· Additional firearms for safety and security services

· Investment in Project EPIC (Emergency and Policing Incident Command)

· Acquisition of new fire engines

· The upgrade of the Athlone Stadium and City Hall

· Upgrade of the Matthew Goniwe Clinic Extension

· The upgrade of the Gugulethu Clinic

· Roll-out of substance abuse clinics

· A restoration centre for street people

· New municipal courts, including Wynberg, Blue Downs and Mitchells Plain

In addition to these, I also request that Council note the following expenditure items:
· Pilot project for the roll-out of credit card machines

· An additional 10 councillors as per the gazette to serve after the 2016 local government elections

· Upgrade of City rental units to meet health and safety standards

· Furniture and equipment to be utilised in Early Childhood Development centres city-wide

· Additional vehicles for the roll-out of ward-based special projects (e.g. poverty alleviation, youth development, substance abuse and vulnerable groups) to communities in need of social services

In terms of other strategic initiatives, we have proposed a R229,2 million investment in the Expanded Public Works Programme (EPWP) to provide job opportunities despite only receiving just over R30 million from the National Government for this.

Last year, National Treasury noted that the City of Cape Town was ‘overly generous’ in its provision of subsidised services to the poor according to an assessment of our 2015/16 budget.

Indigent relief for the poorest in our city for 2016/17 will amount to R1,1 billion.

And rates rebates of R1,4 billion.

This means a provision of R2,5 billion for the social package, which will assist in relieving some of the financial burden experienced by especially poor households as follows:
· 6 kl of water per month per household free of charge

· 4,2 kl sanitation per month per household free of charge

· 60 kWh electricity free of charge per month per household for those using less than 250 kWh per month

· 25 kWh electricity free of charge per month per household for those using more than 250 kWh but less than 450 kWh per month

· Waste removal: consumers whose properties are valued between R0 and R400 000 receive rebates between 0% and 100%

· Rates rebates on various properties in terms of ownership and usage amount to R1,4 billion

· The qualification for the senior citizen and disabled person rates rebate maximum monthly household income is increased from the current R12 000 to R15 000

· For the indigent rate rebate for persons younger than 60 years, the maximum monthly household income is increased from the current R5 000 to R6 000

· Any household with a gross monthly income of R4 000 or less will receive a 100% rates rebate, an increase from the R3 500 per month threshold

These measures in particular show that we continue to honour our commitment to cross-subsidising the poor in the city.

That commitment has also been highlighted by a major amendment we have made to the budget as a result of our engagement process.

We received a number of comments about households under strain in the current economy.

While we have kept the level of increases low, we realised from our engagement process that we needed to do even more to assist those who need a helping hand.

Previously, properties valued at R300 000 qualified for a further free 4,5 kl of water and 3,15 kl for sewerage. This has been increased for properties valued at R400 000.

This is a major change that was an outcome of the engagement process, including the community meetings which I attended.

It demonstrates that it is possible to have a responsive budget approach if you have a government that is willing to listen.

Mr Speaker, since the tabling of the draft budget in March, the following was also incorporated into the budget:

A further allocation to the Safety and Security Directorate amounting to R19,6 million for various items such as firearms, specialised equipment, and additional funding for the Integrated Contact Centre.

An additional allocation of R11,5 million within the Supply Chain Management (SCM) Department (R10,1 million) and the Utility Services Directorate (R1,4 million) to address the drastic need to increase the efficiency of procurement processes and strengthen capacity, knowledge and the skills base within the SCM function and the organisation generally.

Those residents who submitted requests have been responded to individually.

However, I would like to take a moment to respond to the approximately 3 000 submissions we received from the Social Justice Coalition (SJC).

The broad thrust of these submissions claimed that we are not doing enough for sanitation in informal settlements.

It is worth noting that the SJC only works in certain parts of Khayelitsha, not all of it.

Further, it does not work in other informal settlements or backyarder communities around the metro.

Despite this, it made 3 000 submissions along similar lines, each of which require an individual response.

It is important for people to use the public engagement process effectively. Indeed, we encourage it with the resources we spend trying to get our message out to people.

The SJC and their constituents deserved a response.

We had to pull Monitoring and Evaluation staff out of the field for 10 days to consider these submissions in their entirety.

What the SJC does not realise, and seems unwilling to acknowledge, is that in a world of limited resources, everything has to be planned for and shared among more than 200 informal settlements.

What is more, we have made many investments where we can to give people dignity.

When we are not able to provide full-flush toilets, it is for the following reasons; full-flush toilets cannot be legally installed on privately-owned property, in areas of extremely high density, under power lines, on landfill sites, in a road or railway buffer, within servitudes, outside the urban edge, in water retention ponds and floodplains.

Up to 82% of informal settlements are either fully or partially affected by one or more of the above-mentioned constraints.

Alternative sanitation types such as the portable flush toilet (PFT) or chemical toilets are provided when and only when it is not possible to install water-borne infrastructure.

Despite these constraints, the City’s proposed Water and Sanitation budget for 2016/17 direct spend in informal settlements is in fact an increase compared with last year: R559,7 million this year versus R503,7 million last year.

This R15 million that the SJC is referring to on page 244 is meant for toilets alone.

What is not taken into account is the bulk infrastructure to support the toilets, such as wastewater treatment facilities or the bulk water operations which are much more expensive than the provision of toilets and taps, and from which informal settlements also benefit.

We have also done an exercise for Khayelitsha informal settlements for the associated services I just referred to and this amounts to approximately R75 million in capital expenditure in addition to the R15 million reflected in the budget for the 2016/2017 financial year.

This is just for informal settlements in Khayelitsha.

The SJC communicated and illustrated this R15 million as our full allocation for informal settlements when every directorate will spend millions more on other services to informal settlements.

What is displayed here is the ignorance of the SJC, where they don’t realise that what goes into the toilet needs to go down a pipe to a wastewater treatment plant to be processed.

So I hope they will stop calculating our budget just based on toilet structures.

As part of the public consultation, the Executive Deputy Mayor also had a meeting with the SJC to explain the various aspects of the budget as I have just explained now.

In this regard, budget numbers for water and sanitation in this budget are instructive:
Water and Sanitation are spending over R779 million in poorer areas, including for backyarders and informal settlements
R100 million that is planned for upgrades to the Zandvliet Wastewater Treatment Works which services Khayelitsha
A new water supply from Baden Powell to Khayelitsha is planned to commence in the 2016/17 financial year at a cost of R45,4 million over a three-year period
The Borcherds Quarry Wastewater Treatment Works is also being upgraded; the total cost over three years amounts to R174,5 million. A key part of this is the upgrade of the Stercus where all alternative sanitation types are taken for emptying and cleaning. The cost of upgrade for 2016/17 is R50 million
R113 million is planned for the completion of Cape Flats 3 bulk sewer and this serves residents in poorer areas
In support of housing projects largely for the benefit of the poor, over R28 million is set aside for bulk water and sewers
The Mitchells Plain Wastewater Treatment Works is undergoing upgrades for a planned R50,5 million, again mostly servicing people in poorer areas
And in general, the R74,6 million being planned on sewer and water network upgrades city-wide will serve those living in poorer areas

As we have repeatedly said, major capital programmes and projects have to be read across areas and budget line items to understand the full impact and not just one single figure like R15 million only.

In addition, in the new financial year, the Human Settlements Directorate will be implementing two re-blocking projects in UT Section and BBT Section in Khayelitsha.

Each year we have an Upgrade of Informal Settlements Programme (UISP) and in the new financial year we will spend R26,9million on upgrades in the Masiphumelele TRA, Sweet Homes Incremental Development Area (IDA), Sir Lowry’s Pass Village IDA, and for Bonteheuwel backyarders, Lotus River backyarders, Eastridge backyarders, Atlantis backyarders, Scottsdene backyarders and others.

In all, our total budget proposal is just over R41 billion, with just over R6,5 billion proposed in our capital budget and just over R34,5 billion proposed in our operating budget.

Per directorate, the following updated allocations are proposed:
· City Health: just over R1 billion in opex and just over R37 million in capex

City Manager: over R225 million in opex and almost R20 million in capex
Community Services: over R1,8 billion in opex and over R186 million in capex
Corporate Services and Compliance: over R2,5 billion in opex and just under R390 million in capex
Energy, Environmental and Spatial Planning: over R600 million in opex and over R60 million in capex
Finance: over R2,2 billion in opex and over R136 million in capex
Human Settlements: just over R1,7 billion in opex and just under R500 million in capex
Safety and Security: over R2,8 billion in opex and over R130 million in capex
Social Development and Early Childhood Development: R207 million in opex and over R17 million in capex
Tourism, Events and Economic Development: over R570 million in opex and over R42 million in capex
Transport for Cape Town: over R2,9 billion in opex and under R1,4 billion in capex
Utility Services: over R16,6 billion in opex and over R3,5 billion in capex

Mr Speaker, a good reflection of this government’s spending commitments is a historic consideration of our budget allocations reflecting our five pillars.

Since the 2012/2013 financial year, and including the current financial year, the updated total allocations in opex for the five pillars have therefore been as follows:
· The caring city: over R12,1 billion

· The inclusive city: over R7,7 billion

· The opportunity city: over R64 billion

· The safe city: over R8,4 billion

· The well-run city: over R17,9 billion

Since the 2012/2013 financial year, and including the current financial year, the updated total allocations in capex for the five pillars have therefore been as follows:
The caring city: over R3 billion
The inclusive city: over R940 million
The opportunity city: just under R16,5 billion
The safe city: over R320 million
The well-run city: just under R700 million

And in order to demonstrate our future commitment, considering our exercise in strategic alignment, especially the five pillars which this government uses as a framework, the projections for capex per pillar over the next three years of the MTREF cycle are updated as follows:
· The caring city: approximately R1,8 billion

· The inclusive city: just under R560 million

· The opportunity city: just over R14 billion

· The safe city: just over R230 million

· The well-run city: just over R900 million

And for the same in updated opex proposals for the three-year period:
· The caring city: over R13 billion

· The inclusive city: over R7,7 billion

· The opportunity city: over R67,1 billion

· The safe city: over R9,2 billion

· The well-run city: over R16,6 billion

Mr Speaker,

In conclusion, we have engaged with our residents and other partners and have made changes to the budget accordingly.

Most significantly, we increased the safety net for poorer residents in terms of the allocations from the City.

This is part of our responsibility to ensure the continued success of the social compact in Cape Town.

That compact is a partnership to use our resources to address conditions of poverty and social distress.

It is a demonstration of a caring city using its budget to effect redress and build a city on the principles of historic reconciliation.

As the last budget of this government, I think that it continues to add to the progress we have made in building a better Cape Town for everyone.

While there is a lot more work to still be done, our mission to change the lives of our residents for the better with the resources we have will continue.

Mr Speaker, we put this five-year plan forward for the people of Cape Town in 2011 and they gave us a 61% mandate for our plan.

I want to assure the people of Cape Town that we have implemented this plan for the past five years including this financial year.

The IDP 2012 – 2017 contained 294 initiatives and we have implemented 97% of those already and we have 13 months left till June 2017.

And on 3 August, because of our track record of service delivery being the best in South Africa, we will put another five-year plan before the voters, who are intelligent, and we will ask them to lend us their vote for another five years to continue the work that we have done.

We are coming to the end of our term. See you at the polls and let the voters decide who governs the best.

Thank you, baie dankie, enkosi.

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