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Note to editors: the following budget speech was tabled by the City’s Executive Mayor, Patricia de Lille, for adoption at the full Council budget meeting today, 30 May 2017.

Good morning, goeie dag, molweni, as-salaam alaikum, shalom.

Mr Speaker,

When I tabled the draft budget in March, I said that it was truly the first of its kind for the City of Cape Town as we demonstrate the implementation of the Organisational Development and Transformation Plan’s (ODTP) principles and objectives.

Mr Speaker, before us today is the proposed Capital Budget for 2017/18 which is R6,8 billion and the Operating Budget which is R37,5 billion.

I would like to start with an issue which I know has been a concern for many Capetonians who are struggling make ends meet.The draft budget proposed the implementation of the home-user electricity tariff for properties valued at over R1 million.

The home-user tariff has an R8,21 per day service fee (R250 per month).

As a result of the widespread input from the public, we have listened and a decision has been made not to implement the home-user tariff.

This means that consumers in properties above the value of R1 million will remain on the Domestic Tariff.

There was great concern about the implementation of this charge, with over 1 000 comments received and we have listened.

I have advised the Energy Directorate to delay the implementation of this tariff.

This is a demonstration of our commitment in the ODTP to be a more responsive and customer-centric government where we have listened to residents and we will be undertaking more extensive engagement with the public around this service charge.

Mr Speaker,

In continuing our commitment to provide relief to poorer households, we have also introduced a new rates rebate of R50 per month for households whose properties are valued between R400 000 and R750 000.

We have also increased the value of property from R400 000 to R500 000 for households who qualify for a 25% reduction in refuse removal charges.

Mr Speaker,

Our proposed rates and tariff structure for Council’s approval today is as follows:
· Rates: an average of 5% – down from 6% last year
· Electricity: an average of 3,34% – down from 7,78% last year
· Refuse: an average of 6,51% – down from 7,92% last year
· Disposal: an average of 8,32% – down from 12,08% last year
· Water: an average of 19,25% – up from 9,75% last year

This is a 19,25% increase on the standard Level 1 water tariffs.

The progressive step tariffs mean that the more water you use, the more you will pay.

For consumers who use between 600 litres and 3 500 litres per month, the Level 4 restriction tariff price increase will range between approximately 6% and 10% more for water compared with what they are currently paying on Level 3 restrictions.

Only customers who are consuming water in the step tariffs of more than 3 500 litres or 5 000 litres per month will pay much higher tariff increases because it is intended to deter such high consumption during this time of drought.

If people are still consuming this much water, it means that they have not reduced their consumption and are not adhering to water restriction measures.

Similar principles apply to the sanitation tariffs.

Mr Speaker, in this time of the drought crisis we are aggressively expanding our emergency water supply schemes as we have seen that we are not getting enough rainfall.

This is going become the new normal for Cape Town.

There are many residents and businesses that have reduced their consumption.

However, there are still some people who, no matter how many times and ways we say it, are still using too much water.

We can only save water while we still have it and that must still be the priority of every Capetonian.

The more you consume, the more you are going to pay. The impact of the tariff increases can therefore be managed if you reduce your consumption.

We have to continue to expand our water and sanitation capital programmes through the implementation of the following: water security projects, augmentation schemes, extensions to wastewater treatment plants, appropriate capacity levels, and asset replacement programmes.

The severity of the drought necessitates the acceleration of our repairs and maintenance programme as well as a staffing strategy to ensure that service delivery and responsiveness expectations are being met.

Mr Speaker,

We are also getting on with our poverty alleviation mechanisms by providing financial relief to the residents who need it most.

Residents who qualify as indigent are, for the most part, exempt from the tariff increases mentioned before.

In this pro-poor budget, the total cost of the social package for 2017/18 amounts to R2,7 billion, which is up from R2,5 billion last year.

Indigent relief for the most vulnerable has been increased from R1,1 billion to R1,3 billion.

Rates rebates worth R1,4 billion will be made available.

The proposed social package to assist in relieving some of the financial burden experienced by poor households is as follows:
· Any household with a gross monthly income of R4 000 or less will get a 100% rates rebate
· Households with an income of more than R4 000 and up to R6 000 qualify for rates rebates of between 25 and 75%
· Rates rebates for senior citizens and people with disabilities are granted to qualifying applicants where the monthly household income is below R15 00
· 60 kWh of electricity is free of charge per month per household for those using less than 250 kWh per month
· 25 kWh of electricity free of charge per month per household for those using more than 250 kWh but less than 450 kWh per month on average with a property value of R400 000 or less
· Waste removal: consumers whose properties are valued below R500 000 receive rebates between 0% and 100%
· Waste removal: indigent applicants receive a 100% rebate
· Additional 40,5 litres free water, including sewerage charges, for all properties valued at R400 000 or less

The only two proposed changes are therefore as follows:
· Firstly, previously all households received 60 litres of water per month per household free of charge
· For 2017/18, the proposal is that 60 litres of water is only free for properties valued at less than R400 000
· Secondly, previously all households received 40,2 litres sanitation per month per household free of charge
· For 2017/18, the proposal is that the 40,2 litres sanitation is only free for properties valued at less than R400 000

Mr Speaker,

Another key change before us today is that the City has made provision for up to R6,6 million to pay for and subsidise bus rides on the MyCiTi service for unemployed people in Cape Town.

This is aimed at promoting access to transport for job seekers to enable them to access opportunities more easily.

Many people are giving up looking for work because travel costs are a barrier.

We want to implement this initiative to take away that obstacle of travel costs which sometimes prevents people from being able to access job opportunities.

While we will still work out the exact mechanics, what this means is that residents who are travelling on the MyCiTI buses between 10:00 and 15:30 can get a myconnect card and they will be able to travel without being charged for the trips.

This is specifically aimed at job seekers and is another contribution from the City to create an enabling environment for economic growth.

This is set to come into effect by the end of September 2017.

This is a manifesto commitment to residents where we said we are going to give job seekers free access to transport.

Mr Speaker,

What is absolutely clear about the ODTP is the need to listen more attentively to the needs of communities and become a more responsive administration.

I would now like to highlight some of the key amendments to the draft budget in terms of the budget for informal settlements which also puts the area-based service delivery model into practice:

In Area East: for the Upgrade of Informal Settlements Programme in Enkanini, Khayelitsha: R10 million will be allocated for the new financial year for an in situ site and service project in Wards 109 and 95. This is a multi-year project. Enkanini is one of the largest informal settlements in Cape Town and this project will render around 7 500 opportunities.

In Area Central: the Sweet Homes Farm Philippi Project is an Upgrading of Informal Settlements Programme project which aims to provide improved service delivery for approximately 4 000 households. A total of R35 million has been allocated for the project in Ward 33. This project is to be executed in various phases. The effective execution of the various phases will result in the successful delivery of formal engineering infrastructure and ownership of serviced sites to the Sweet Homes Farm community.

In Area North: R33 million will be spent in Ward 31 for the Agste Laan informal settlement upgrade project in Valhalla Park that will deliver approximately 579 opportunities. This is project currently being held up by gangsters extorting the contractor.

For city-wide projects in our informal settlements, R27 million in capex has been allocated for water and sanitation projects in Langa, Kraaifontein, Dunoon, Fisantekraal, Enkanini, CT Section, RR Section, Pholile Park, Garden City and Bhurundi in Mfuleni, Imizamo Yethu, Samora Machel, Kosovo and several other areas across the city.

Also city-wide for our Informal Settlements and Backyarder Department, R233,4 million in operating expenditure has been allocated for the installation and maintenance of sanitation facilities in the informal settlements programme.

This is direct spend on infrastructure in the informal settlements and does not cover the cost of providing the free water and sanitation or the larger bulk infrastructure that is required for these services, such as reticulation and wastewater treatments.

It also does not include water and sanitation installations that form part of upgrade or re-blocking programmes.

The Energy Directorate has also allocated R90 million for electrification projects in informal settlements, new housing projects, and in backyarder dwellings across the city.

Mr Speaker,

The amendments I have just highlighted represent some of the projects which speak to the area-based service delivery model and the mainstreaming of services to informal settlements and backyard dwellers.

As a further testament to our commitment to become more responsive and customer-centric, I would now like to share some of the comments received from the public and how we responded to them:

A number of Gugulethu residents highlighted the need for urgent street upgrades.

The City’s roads rehabilitation budget over the next three financial years is R369,6 million which will see city-wide road upgrades continuing in Gugulethu, Manenberg, Bonteheuwel, Bishop Lavis and Imizamo Yethu, among others.

For the Gugulethu upgrades, a tender is in the process of being finalised for work to the value of an estimated R20 million which will start in the new financial year.

Several Blikkiesdorp and Delft residents raised the concerns about safety and crime.

In response, we can say that R20 million has been allocated for the appointment of 90 neighbourhood safety officers in Blikkiesdorp and Delft to increase visibility and assist with crime prevention operations.

Other residents raised the need for additional policing in and around Masiphumelele and the building of a fire station.

In response we can say that Phase 2 of the Masiphumelele Fire Station construction, valued at R9,2 million, will be completed in the new financial year.

In addition, an amount of R5 million has been set aside for the appointment of additional law enforcement officers.

In terms of the call for street lighting to be upgraded in Khayelitsha, our response is that we will set aside R40 million over the next few financial years to undertake this massive project to improve the lighting situation.

In the budget public participation meetings, residents asked about the upgrading the Athlone Stadium.

For the new financial year, R6 million has been allocated for construction of office space in the south stand, upgrading of the lifts for the west and east stands, upgrade of flood lighting, and Phase 3 of the CCTV installation.

The remainder of the upgrades will be done in the two following financial years.

In another public meeting in Parow, residents asked for CCTV cameras in Valhalla Park.

R200 000 has been set aside for the installation of cameras in Ward 30.

People of Mitchells Plain expressed their concern about the crime in Samora Machel, asking for programmes to deter youth from criminal activity.

The Department of Social Development will implement a skills development programme for youth in Samora Machel to the value of R1million.

Finally, we are also introducing the Mayor’s Job Creation Fund where R340 million has been allocated and part of that will be used for where the City pays for skills training of students and the onus is on the industry to employ them.

I am confident that the budget we are putting forward today will help us realise our goal of becoming a forward-thinking city which provides assistance to those who need it most and creates an enabling environment for inclusive economic growth.

In doing so, we continue getting on with building a caring, inclusive, well-run, safe and opportunity city.

I thank you. God bless.

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