The completion of the seafront extension is set to unlock one of the most important catalytic projects in the city - the R 35 billion Point Waterfront Development, which is also part of the city's initiative to rebuild and regenerate the inner city. In November, the city convened a meeting under the theme: "The city means business", with the property owners in the inner city, with a particular focus on those who own dilapidated buildings.
COUNCIL RESOLUTIONS 1
- BUDGET RELATED RESOLUTIONS
- ESTIMATES OF INCOME AND EXPENDITURE
- RECAPITULATION: VALUATION OF RATEABLE PROPERTY
- EXEMPTIONS, REBATES AND REDUCTIONS
- RESIDENTIAL PROPERTY
- PUBLIC BENEFIT ORGANISATIONS
- LIFE RIGHTS SCHEMES AND RETIREMENT COMPLEXES
- SCHOOLS NOT FOR GAIN
- BED AND BREAKFAST UNDERTAKINGS
- GUEST HOUSE UNDERTAKINGS
- BACK – PACKER LODGES, HOLIDAY ACCOMODATION AND STUDENT ACCOMMODATION
- NATURAL AND OTHER DISASTERS
- VACANT LAND
- PROPERTIES IN THE OWNERSHIP OF THE MUNICIPALITY OR MUNICIPAL ENTITIES
- NATURE RESERVES AND CONSERVATION AREAS
- ECONOMIC DEVELOPMENT
- CONSULATES
- GREEN CERTIFIED BUILDINGS
- PHASING IN OF RATES
- FLAT SERVICE CHARGE RATE FOR FORMAL PROPERTIES VALUED BELOW R 185 000 AND INFORMAL SETTLEMENTS WHERE WATER AND ABLUTION FACILITIES HAVE BEEN PROVIDED
- DATE OF OPERATION OF DETERMINATION OF RATES That this determination comes into operation on 1 July 2020
- ADMINISTRATION CHARGE ON ARREAR RATES
- OTHER TARIFFS AND CHARGES
- DOMESTIC WATER DEBT RELIEF PROGRAM
- BORROWINGS TO FINANCE THE CAPITAL BUDGET
- HOUSING/HOSTELS DEFICIT
- MEASURABLE PERFORMANCE OBJECTIVES
- INTEGRATED DEVELOPMENT PLAN (IDP)
- PARTICULARS OF INVESTMENTS
- REMUNERATION OF COUNCILLORS AND SENIOR OFFICIALS
- UNFUNDED MANDATES
- IMPACT OF HOUSING EXPENDITURE ON THE CASH RESERVES
- EXPENDITURE CONTROL, AUSTERITY MEASURES & TARIFFS IN THE CURRENT STATE OF THE ECONOMY
- FREE BASIC SERVICES
- OFF BALANCE SHEET FINANCING
- FOOD AID PROGRAM (SOUP KITCHENS)
- PREPAID COLLECTIONS
- METER READING STRATEGY
- DISASTER FUNDING
- ADDITIONAL RECOMMENDATIONS
That the following reductions in the market value of the property and discounts on the interest rates payable are approved and are approved in accordance with the Pricing Policy. A turnaround strategy is needed to reduce water loss and increase water revenue.
EXECUTIVE SUMMARY 1
INTRODUCTION
OVERVIEW OF THE 2019/20 MTREF
The main aim of the program is to ensure that all watercourses in the eThekwini Municipality are brought up to an appropriate standard and maintained to that standard. The municipality believes in empowering the youth to ensure that they contribute to the economic growth and development of the city.
KEY ISSUES & CHALLENGES
- SERVICE DELIVERY
- SERVICE DELIVERY STANDARDS, LEVELS OF SERVICES, OUTCOMES, TIMETABLE FOR ACHIEVEMENTS AND FINANCIAL IMPLICATIONS
Limited funding and exponential growth in the municipality has also increased the level of outstanding cases. The municipality is making great strides in the massive extension of the extension services program, which aims to improve the lives of residents in informal settlements.
FINANCIAL PERFORMANCE ( 2018/19 AND 2019/20 ): PARENT MUNICIPALITY
- OPERATING BUDGET
The reduction in Service Charges – Water of R417m is due to delays in removing water flow restrictions. The reduction in Service Charges – Sanitary Revenue of R186 million is due to delays in the removal of water flow restrictions. Capital performance for the six months ending December 2019 is summarized in the table below.
ALIGNMENT WITH NATIONAL AND PROVINCIAL PRIORITIES
FINANCIAL STRATEGY, ONGOING VIABILITY AND SUSTAINABILITY
- FINANCIAL STRATEGY
- BUILT ENVIRONMENT PERFORMANCE PLAN (BEPPS)
- FINANCE MANAGEMENT CAPACITY MATURITY MODEL (FMCMM)
Bulk tariff increases from Eskom and Umgeni Water Board as well as salary increases are all well above inflation and are a threat to the municipality's financial sustainability and viability. IRPTN funding risk must be carefully managed, particularly the impact of operating costs on the city's financial sustainability and viability. This will help to ensure the municipality's future financial viability and sustainability and contribute to achieving the goals of this financial strategy.
MUNICIPAL ENTITIES
The industry requires continuous improvement in offerings and attractions to sustain demand, especially in the current economic climate. Insufficient capital investment in the park over the past years has had a negative impact on the income. In order to create a world-class entertainment destination and to improve The Theme Park and its business operations, a rehabilitation of the park is underway to create new experiences for visitors.
- SOURCES OF FUNDING
Despite the restrictions, uShaka remained one of the first choices for domestic and international visitors to Durban. The park has entered into a business closure effective 25 March 2020 and has requested emergency funding of R42 million from the council to maintain key processes for the maintenance and safety of DMTP assets, including the marine animals. Revenue from fares and service charges is a significant part of the city's revenue package, accounting for 70% of total revenue.
OPERATING EXPENDITURE FRAMEWORK
In line with the approach of recent years, the 2020/21 budget allocations again foresee increases above the CPI level for this cost component. The cost associated with the remuneration of councilors is determined by the Minister of Cooperative Governance and Traditional Affairs in accordance with the Remuneration of Public Office Holders Act, 1998 (Act 20 of 1998). Financial fees consist mainly of interest repayments for long-term borrowings (cost of capital) and are equal to 1.9.
CAPITAL EXPENDITURE
- CAPITAL BUDGET
The R2.0 billion loan was made from a R1.0 billion loan that was earmarked for borrowing in the 2018/2019 financial year. The second loan of R1.0 billion was for a loan contracted in the 2017/2018 financial year, but the funds were not drawn down until July 2018 due to adverse economic conditions in the 2017/2018 financial year. For this purpose, the municipality has appointed a main organizer who will help in establishing the program.
Economic Development Trends
Economic development programmes: R 46.1 million Durban Film Office: R 5.1 million Reforestation projects: R 10.8 million Business support projects: R 38.2 million Travel and tourism trade fair: R 17.4 million Durban Business Fair and regional grants: R 34.3 million Bidding support and presentations: R 5.1m Durban Tourism Events: R 17.0m Durban Tourism Brand Advertising &.
ETA Trends
HOUSING TREND ANALYSIS
SANITATION TREND ANALYSIS
Refuse Removal Trends
Focus on design and implementation of major road projects, road rehabilitation projects, civil engineering structures, road improvements, gravel to the surface and maintenance of existing road networks.
WATER TREND ANALYSIS
ROAD TREND ANALYSIS
HUMAN SETTLEMENTS, ENGINEERING, TRANSPORT AND INFRASTRUCTURE
SUSTAINABLE DEVELOPMENT AND CITY ENTERPRISES
GOVERNANCE
The following pages present the main budget tables as required in terms of section 8 of the municipal budget and reporting regulations. This requires a simultaneous assessment of financial performance, financial position and cash flow budgets along with capital budgeting. This table makes it easy to see the planned operational performance in relation to the organizational structure of the city.
ETH eThekwini - Table A3 Consolidated Budgeted Financial Performance (revenue and expenditure by municipal vote)
The justification is that ownership and the net assets of the municipality belong to the community. As an example, the collection rate assumption will have an impact on the cash position of the municipality and subsequently inform the level of cash and cash equivalents at the end of the year. The cash back reserves/accumulated surplus reconciliation is in line with the requirements of the MFMA circular 42.
ETH eThekwini - Table A8 Consolidated Cash backed reserves/accumulated surplus reconciliation
The table evaluates the funding levels of the budget by, firstly, forecasting liquidity and investments at the end of the year and, secondly, reconciling the available funding with the commitments/commitments that exist. This shows that the liquid funds and investments available exceed the applications indicating compliance with the MFMA requirements that the municipality's budget is "funded". As part of the budgeting and planning guidelines that underpinned the preparation of the 2020/21 MTREF, the ultimate aim of the medium-term framework was to ensure that the budget is funded and aligned with Section 18 of the MFMA.
Outcome
Audited Outcome
Original Budget
Adjusted Budget
Full Year Forecast
Budget Year 2020/21
Budget Year +1 2021/22
Budget Year +2 2022/23
2020/21 Medium Term Revenue &
Expenditure FrameworkCurrent Year 2019/20
OVERVIEW OF THE ANNUAL BUDGET PROCESS 2
OVERVIEW
The IDBS supports the infrastructure asset management principle of continuous improvement by monitoring and reviewing the deliverables described in the Control System. The key to strengthening the link between priorities and spending plans lies in improving political oversight of the budget process. Political oversight of the budget process enables the government, and especially the municipality, to manage the tension between competing policy priorities and fiscal realities.
PROCESS FOR CONSULTATIONS WITH EACH GROUP OF STAKEHOLDERS AND OUTCOMES
Strengthening the link between government priorities and spending plans is not a goal in itself, but the goal should be increased service delivery with the aim of improving the quality of life for all people in the city. MFMA section 53, subsection 1, letter a, states that a municipality's mayor must provide political guidance on the budget process and the priorities that must guide the preparation of the budget.
SCHEDULE OF KEY DEADLINES RELATING TO THE BUDGET PROCESS
OVERVIEW OF ALIGNMENT OF BUDGET WITH IDP OVERVIEW OF ALIGNMENT OF BUDGET WITH IDP
- KEY INTERNATIONAL, NATIONAL AND PROVINCIAL GUIDING DOCUMENTS
- DEVELOPMENT CHALLENGES
- MUNICIPAL STRATEGIC PRIORITY AREAS
- IDP OVERVIEW AND KEY AMENDMENTS
- IDP REVIEW PROCESS AND STAKEHOLDER PARTICPATION
- LINK BETWEEN THE IDP AND THE BUDGET
Given the strategic framework outlined, it is clear that the city's budget should be a growth-enhancing budget that meets basic needs and builds on existing skills and technology. The municipality's implementation plan is organized into eight separate but related plans. These priorities lead to the creation of structures that support, house and associate other actions and activities – the building blocks around which actions and prioritization take place. The revision of the five-year plan in 2020/21 offers citizens even more opportunities to actively participate in the development of the IDP.
- KEY FINANCIAL RATIOS / INDICATORS
- FREE AND SUBSIDISED BASIC SERVICES
To help the poor provide basic services, the Council has decided to introduce a policy for the needy, exempting poor households from paying for basic services. Eligible residents will have to apply to be part of the Registry of Needs and there will be an assessment based on criteria. The estimated cost of the social package (i.e. lost revenue) is approximately R 4.8 billion for the financial year 2020/21.
OVERVIEW OF BUDGET RELATED POLICIES OVERVIEW OF BUDGET RELATED POLICIES
- ASSESSMENT RATES POLICY
- CREDIT CONTROL AND DEBT COLLECTION POLICY
- TARIFF POLICY
- INDIGENT POLICY
- WATER POLICY
- SUPPLY CHAIN MANAGEMENT POLICIES
- INVESTMENT / CASH MANAGEMENT AND BORROWING POLICIES
- VIREMENTS BUDGET POLICY
- INFRASTRUCTURE ASSET MANAGEMENT POLICY
- ACCOUNTING POLICY
- FUNDING AND RESERVES POLICY
- BUDGET POLICY
In accordance with regulations and National Treasury Circulars, the policy has been revised and adopted by Council on 2018-12-06. Further revisions of the SCM policy were carried out and the amended policy was adopted by the Council on. The framework policy and guidelines for borrowing have also been reviewed and the revised policy was adopted by Council on 2017-06-28.
OVERVIEW OF BUDGET ASSUMPTIONS OVERVIEW OF BUDGET ASSUMPTIONS
- KEY FINANCIAL ASSUMPTIONS
- BORROWING AND INVESTMENT OF FUNDS
- PRICE MOVEMENTS ON SPECIFICS
- TIMING OF REVENUE COLLECTION
- AVERAGE SALARY INCREASES
- CHANGING DEMAND CHARACTERISTICS (DEMAND FOR SERVICES)
- ABILITY OF THE MUNICIPALITY TO SPEND AND DELIVER ON THE PROGRAMS
- COST OF SERVICE DELIVERY VS AFFORDABILITY
The capital expenditure of the parent municipality was financed from a mixture of government transfers, internally generated funds and external loans. The graphs indicate that the City will not breach any of the prudential ratios over the MTREF period. Over the past few years, the functions of the eThekwini Municipality are expected to increase according to the needs of the community.
OVERVIEW OF BUDGET FUNDING OVERVIEW OF BUDGET FUNDING
- LOAN DEBT AND INVESTMENTS
- SOURCES OF FUNDING
- SAVINGS AND EFFICIENCIES
- INVESTMENTS – CASH BACKED
- COLLECTION RATES FOR EACH REVENUE SOURCE
- LEVELS OF RATES, SERVICE CHARGES AND OTHER FEES AND CHARGES
Investments are made taking into account the risk profile, the liquidity needs of the city and the return on investment. Tariff review is done within the framework of the city's tariff policy, which defines the main principles. Therefore, the determination of the effective property rate fee is an integral part of the municipality's budgeting process.
In accordance with the provisions of the Municipal Property Rates Act (MPRA), eThekwini Municipality has conducted a general valuation of all properties in the metro. Pursuant to the Municipal Property Rates Act, it is mandatory to carry out a general appraisal at least once every four years. The rate increases are necessary due to the increase in the cost of bulk purchases, maintenance of existing infrastructure, new infrastructure provision and to ensure the financial sustainability of the services.
LEGISLATION COMPLIANCE STATUS LEGISLATION COMPLIANCE STATUS
The 2018/19 Annual Report has been developed taking into account the MFMA and National Treasury requirements. Fully comply with monthly, quarterly and annual reports to the Council, Provincial and National Treasury. A Budget and Treasury Office has been established in accordance with the MFMA and National Treasury requirements.
SERVICE DELIVERY AND BUDGET IMPLEMENTATION PLAN (SDBIP)
STATISTICAL INFORMATION
STATISTICAL INFORMATION STATISTICAL INFORMAT
CONSOLIDATED BUDGET
DETAILED
BUDGET SUPPORTING TABLES
ETH eThekwini - Supporting Table SA2 Consolidated Matrix Financial Performance Budget (Source of Income/Type of Expenditure & Dept.). Transfers and Subsidies - Capital (Monetary Allocations) (National/Provincial Branch Offices, Households, Non-Profit Institutions, Private Enterprises, . Public Enterprises, Higher Education Institutions). ETH eThekwini - Supporting Table SA23 Salaries, Allowances and Benefits (Political Officers/Councillors/Senior Managers).
