The following speech was delivered by the City’s Executive Mayor, Patricia de Lille, before Council adopted the January adjustments budget today. Read more below…
In tabling the January 2018 adjustments budget, I would like to highlight some of the main reasons for proposing the adjustments budget.
The adjustments budget is being proposed to incorporate funding shifts in the capital programme for the 2017/18 financial year as outlined in the report before Council today.
Additional reasons for the adjustments budget are to include amended Provincial Gazette allocations for 2017/18 and administrative transfers/virements of budgetary provisions as approved in terms of Council’s System of Delegations of Powers and the Virement Policy.
The adjustments budget is also being proposed to update existing provisions in accordance with the latest implementation projections, revised business plans and confirmed funding sources as well as to update implementation plans of projects.In addition, Council is also to note that upward or downward adjustments of revenue and expenditure are based on current trends.
The adjustments budget also accommodates the impact of the latest Water Resilience Action Plan and the resultant revision of reduced water sales.
Mr Speaker, in terms of decreases in the capital budget along with concomitant increases in the operating budget, some of the reasons are as follows.
With regard to the Integrated Skills Development Grant, R800 000 is no longer required as the R903 135 roll-over approval that was received is sufficient to provide for the IT equipment.
The R800 000 will now be utilized on the City’s operating budget to appoint two additional graduate interns on three-year contracts.
In addition, South African Breweries donated R6 million towards the City’s water pressure management technology interventions.
The National Lottery also donated R1,6 million towards the upgrading of the Turfhall stadium and the Mfuleni sport complex.
The City also received just over R435 000 from the University of Connecticut for the upgrade of the Gugulethu clinic.
Mr Speaker, in terms of operating grants and donations, there was an additional grant allocation of R3,3 million received from the Department of Community Safety for ongoing law enforcement auxiliary services within the Safety and Security Directorate.
The City also received R3,3 million from the Central City Improvement District for the appointment of law enforcement and traffic officers within the Safety and Security Directorate.
In terms of the operating budget, there is also a shift of R9,4 million funding from the Urban Settlements Development Grant to the operating budget for the electrification of Eskom areas and for hostels redevelopment within the Transport and Urban Development Directorate.
Mr Speaker, in terms of revenue and expenditure upwards and downwards adjustments, there is a reduction of R 1,4 billion within the Informal Settlements, Water and Waste Services Directorate on water and sanitation sales due to Level 4b water restrictions and level 5 additional measures that have been implemented since September 2017.
To absorb the impact of this under-recovery on sales, reductions were effected on the various expenditure items within the Water and Sanitation Department as follows:
· Savings on salaries, wages and allowances to the value of R127,9 million
· Bulk Purchases – R102,6 million, CRR – R671 million
· Debtors working capital – R94 million
· Various general expenditure items – R10,3 million
· The balance of the under-recovery will be absorbed by identified operating efficiencies within rates and will be transferred to the Water and Sanitation Department as a contribution from rates (R500 million from savings on salaries, wages and allowances).
And finally, there is also an additional allocation of R145 million for water resilience funded from operational efficiencies.