ELECTRICITY
Table 122: Electricity Tariff
A Cost of Supply Study was undertaken by the Municipality which indicated that the Municipality should increase its electricity tariffs with 6.84% to recover all our cost in delivering this service as a sustainable economic service to the residents. This is 0.84% above National Treasury Guidelines, however the Municipality will liaise with NERSA for final approval and regulation.
ELECTRICITY RATES*
2017-2018 2018-2019 %
Increase
COST SAVING MEASUREMENTS
• The indigent members of the public should be encouraged to report all water leaks, even on their side of the meter. Early action preventing water losses will result in a slowdown of bad debts.
• The monitoring of overtime and standby must continue.
• No overtime payments must be made to staff earning over the baseline salary as per legislation.
• Year tenders must be encouraged for all items bought on a regular basis and the contracts must stipulate that no increases in the prices may take place during the contract period. Strict service level agreements must also be entered into whereby non-performance or sub-standard performance will result in non- payment.
• The detailed summaries of telephone expenditure per staff member currently being provided to the Directors should also be provided to the Municipal Manager on a monthly basis.
• The monitoring of purchases should continue with the cash committee
• Circular 82 has been issued and implemented, but it is advice that a policy be written to ensure effective implementation and monitoring of it.
CHAPTER 6
This Chapter deals with the implementation and monitoring of the IDP projects and programmes aimed at achieving the vision of the municipality as set out earlier in this document. The IDP and Budget are implemented through a Service Delivery and Budget Implementation Plan (SDBIP). A municipal scorecard is used to measure, monitor, evaluate and report on institutional performance (on a monthly, quarterly, bi-annual and annual basis).
The institutional SDBIP forms the basis of the directorate-based SDBIP and the performance agreements and plans of employees.
6.1 PERFORMANCE MANAGEMENT OVERVIEW
The Performance Management System of Cederberg Municipality is intended to provide a comprehensive, step by step planning design that helps the municipality to manage the process of performance planning and measurement effectively. The PMS System serves as primary mechanism to monitor, review and improve the implementation of the municipality’s IDP and eventually the budget.
The citizens of Cederberg like all other citizens in South Africa have high expectations about service delivery by the Municipality. Elected representatives and the Administration are continuously challenged to demonstrate that all levels of government are capable and committed to manage and utilise public resources in a way that will enhance economic growth and sustainability. Cederberg Municipality through difficult impeding circumstances has shown its ability to execute both basic as well as enabling services crucial for social and economic growth and development. This challenge is best illustrated by the requirement that the Municipality is expected to report on organisational performance as well as that of its employees.
The Performance Management System implemented at the municipality is intended to provide a comprehensive, step by step planning system that helps the municipality to effectively manage the process of performance planning and measurement. The PM System serves as primary mechanism to monitor, review and improve the implementation of the municipality IDP and eventually the budget. The performance management policy framework was approved by Council which provided for performance implementation, monitoring and evaluation at organisational as well as individual levels. The Performance Management Framework of the Municipality is reflected in the diagram below:
Figure 46: Performance Management System
6.2 STATUS OF CEDERBERG MUNICIPALITY’S PERFORMANCE MANAGEMENT SYSTEM
In 2009 the Municipal Council approved a Performance Management System and Framework for performance implementation, monitoring and evaluation of the organizational as well as individual levels.
6.2.1 Organisational Level
The organisational performance of the municipality is evaluated by means of a municipal scorecard (Top Layer SDBIP) at organisational level and through the service delivery budget implementation plan (SDBIP) at directorate and departmental levels. The municipal scorecard (Top Layer SDBIP) sets out consolidated service delivery targets for senior management and provides an overall picture of performance for the municipality, reflecting performance on its strategic priorities.
The directorate and departmental scorecards (detail SDBIP) capture the performance of each defined directorate or department, unlike the municipal scorecard, which reflects on the strategic priorities of the municipality,
the SDBIP provides detail of each outcome for which top management are responsible for, in other words a comprehensive picture of the performance of that directorate/sub-directorate.
Figure 47: Organisational Performance 6.2.2 Individual Level
Cederberg Municipality implements a performance management system for all its senior managers. This has led to a specific focus on service delivery and means that:
• Each manager has to develop a scorecard which is based on the balanced scorecard model.
• At the beginning of each financial year all the Senior Managers (Section 57 employees) sign Performance Agreements.
• Evaluation of each manager’s performance takes place at the end of each quarter.
6.2.3 Cascading Performance Management to lower levels
It is important to link organisational performance to individual performance and to manage both at the same time, but separately. Although legislation requires that the Municipal Manager, and Managers directly accountable to the Municipal Manager, sign formal performance contracts, it is also a requirement that all employees have performance plans. These must be aligned with the individual performance plan of the head of the directorate and job descriptions.
Cederberg Municipality are currently in the process of cascading performance management to lower levels. The Municipality are busy developing a Performance Management Policy and action plan of how the Municipality envisaged to cascade performance management to the lower levels. Department of Local Government is currently assisting the Municipality in this regard.
6.3 KEY PERFORMANCE INDICATORS
Section 38 (a) of the Systems Act requires Municipalities to set appropriate key performance indicators as a yardstick for measuring performance, including outcomes and impact, with regard to the community development priorities and objectives set out in its Integrated Development Plan. Section 9 (1) of the Regulations to this Act maintains in this regard, that a Municipality must set key performance indicators, including input indicators, output indicators and outcome indicators in respect of each of the development priorities and objectives.
Every year, as required by Section 12 (1) of the Regulations to the Systems Act, the Municipality also sets performance targets for each of the key performance indicators. The IDP process and the performance management process must be seamlessly integrated as the Performance Management System serves to measure the performance of the municipality on meeting its development objectives is contained in its Integrated Development Plan.
6.4 THE SDBIP CONCEPT: A PRACTICAL PERSPECTIVE
6.5 PERFORMANCE REPORTING
6.5.1 Quarterly Reports
Reports reporting on the performance in terms of the Top Level SDBIP are generated from the system and submitted to Council. This report is published on the municipal website on a quarterly basis.
6.5.2 Mid-Year Assessment
The performance of the first 6 months of the financial year should be assessed and reported on in terms of Section 72 of the MFMA. This assessment must include the measurement of performance, the identification of corrective actions and recommendations for the adjustments of KPI’s, if necessary. The format of the report must comply with the Section 72 requirements. This report is submitted to Council for approval before 25 January of each year and published on the municipal website afterwards.
6.5.3 Legislative Reporting Requirements
Frequency MSA/MFMA Reporting on PMS Section
Quarterly reporting
➢ The Municipal Manager collates the information and drafts the
organisational performance report, which is submitted to Internal Audit.
➢ The Internal Auditors (IA) must submit quarterly audited reports to the Municipal Manager and to the Performance Audit Committee.
➢ The Municipal Manager submits the reports to Council.
MSA Regulation 14(1)(c)
Bi-annual reporting
➢ The Performance Audit Committee must review the PMS and make recommendations to Council.
➢ The Performance Audit Committee must submit a report to Council Bi- annually.
➢ The Municipality must report to Council at least twice a year.
➢ The Accounting Officer must by 25 January of each year assess the performance of the municipality and submit a report to the Mayor, National Treasury and the relevant Provincial Treasury.
MSA Regulation 14(4)(a) MSA Regulation
14(4)(a) MSA Regulation
13(2)(a) MFMA S72
Annual reporting
➢ The annual report of a municipality must include the annual performance report and any recommendations of the municipality’s Audit Committee.
The Accounting Officer of a municipality must submit the performance report to the Auditor-General for auditing within two months after the end of the financial year to which that report relates.
➢ The Auditor-General must audit the performance report and submit the report to the Accounting Officer within three months of receipt of the performance report.
➢ The Mayor of a municipality must, within seven months after the end of a financial year, table in the municipal council the annual report of the municipality.
➢ The Auditor-General may submit the performance report and audit report of a municipality directly to the municipal council, the National Treasury, the relevant Provincial Treasury, the MEC responsible for local
government in the province and any prescribed organ of the state.
➢ Immediately after an annual report is tabled in the council, the
Accounting Officer of the municipality must submit the annual report to the Auditor- General, the relevant Provincial Treasury and the Provincial Department responsible for local government in the province.
➢ The council of the municipality must consider the annual report by no later than two months from the date on which the annual report was
MFMA S121 (3)(c)(j)
& MSA S46 MFMA S126 1(a)
MFMA S126 (3)(a)(b) MFMA S127(2)
MFMA S127 (4)(a) MFMA S127
(5)(b) MFMA S129 (1) MFMA S130 (1) MFMA S134
Frequency MSA/MFMA Reporting on PMS Section tabled; adopt an oversight report containing council’s comments on the
annual report.
➢ The meetings of a municipal council at which an annual report is to be discussed or at which decisions concerning an annual report are to be taken, must be open to the public and any organ of the state.
➢ The Cabinet Member responsible for local government must annually report to Parliament on actions taken by the MEC’s for local government to address issues raised by the Auditor-General.
Table 123: Legislative Reporting Requirements
6.6 RISK MANAGEMENT (AMENDED)
Cederberg Municipality drafted a Risk Policy and a Risk Management Implementation Plan and will submit the documents to Council for approval. Risk management forms part of management’s core responsibilities and is an integral part of the internal processes of the municipality.
It is a systematic process to identify, evaluate and address risks on a continuous basis before such risks can impact negatively on the municipality’s service delivery capacity. When properly executed risk management provides reasonable, but not absolute assurance, that the municipality will be successful in achieving its goals and objectives.
The Risk Management Strategy deals with the major intended and emergent initiatives taken by and involving the utilisation of its resources to reduce risk in the Municipality. This strategy outlines a high-level plan on how the Municipality will go about implementing its Risk Management Policy.
Cederberg has embarked on a strategic risk assessment process, where the following top 10 risks were identified as strategic risks in the Municipality:
Strategic Objective Risk Area Risk Description Risk Background
Implement strategies to ensure financial viability and economically sustainability
Financial
Viability/Sustainability
Lack of financial viability and economic sustainability
1. Bulk of Municipality's households are indigent 2. High water and electricity losses
3. Collection rate not at acceptable levels
Improve and sustain basic service delivery and
infrastructure development Infrastructure
Inability to provide timely and effective services to the community
1. Aged infrastructure and vehicles
2. Lack of and/or updated maintenance and master plans
3. Insufficient budget allocated towards the maintenance of
infrastructure and vehicles Good Governance,
Community Development &
Public Participation
Human Resources Poor retention of staff to deliver effective services
1. Career Development and personal development lacking
2. Low levels of staff morale