At the beginning of this year, we approved a five-year master plan for electricity, which is already in the process of being implemented. The district is also in the process of installing a large water supply network in the Hewu area.
Phase 3 of the Dumpy Adams Sport Complex – We have planned to have the project completed by October last year. Due to the delays in the procurement
I think there are some signs that there is a growing recognition that while we have responded responsibly to the wishes of the Water Authority, we need to find ways to minimize the negative effects this transition may have on our constituencies, especially in light of the recent national decline in economic growth to 0.6%. Be that as it may, fellow councillors, in the meantime let's try to be practical and make the best of the challenges we face in this regard.
Upgrading & Rehabilitation of Lukhanji Stormwater (Sada) - The initial completion date of the project was scheduled to be in September last year
We have had lively community engagement around this issue, but simply stamping our feet, sticking our fingers in our ears and refusing to accept our fate in this regard is not an option. Madam Speaker, due to time constraints, allow me to now briefly reflect on the implementation of our current budget in respect of five or six other infrastructure capital projects.
Surfacing of Gravel Roads in Ilinge and Ekuphumleni/Sada has been completed
Completion of Community facilities (Halls, WC) and Machibini Community Halls suffered significant delays due to:.
The completion of Community facilities (Halls, toilets) and Machibini Community Halls experienced considerable delays due to
Revitalisation of Izingquthu Shearing Shed – 100% complete as is the construction of Whittlesea Public Toilets with the connection of electricity by
The reduction in the salary budget was due to the water and sanitation function being removed from the draft budget. An amount of R2.8 million was included in the capital budget for the purchase of small equipment and machinery.
Budget Related Resolutions
Council resolves that in terms of section 24 of the Municipal Finance Management Act, 56 of 2003, the final annual budget of the municipality for the financial year
Budgeted Financial Performance (revenue and expenditure by standard classification) Table A2
Budgeted Financial Performance (revenue and expenditure by municipal vote) Table A3
Multi – year and single year Capital appropriations by municipal vote and standard classification and associated funding by source fund Table A5
That the financial position, cash flow, cash – backed reserve/accumulated surplus, asset management and basic service delivery targets are adopted as
- Budgeted Financial Position Table B6 2.2 Budgeted Cash Flows Table A7
- Cash Backed Reserves/accumulated surplus Reconciliation Table A8
- Asset Management Table A9
- Basic Service Delivery measurement Table A10
9 The Council decides that measurable performance objectives for income from each source reflected in table 10 be approved for the budget year. 10 The Council decides that the measurable performance objectives for each vote reflected in Article 17 be approved for the 2014/15 budget year.
The BUDGET
4 Executive Summary
Also included in the capital budget was R1.0 million received from Chris Hani District Municipality for the fencing and beautification of the Mlungisi cemetery. The tables and charts in the next few pages show the percentage composition of the revenue and expenditure for the 2014/15 Lukhanji budget.
Operating Budget Expenditure (R'000) Capital Budget Expenditure (R'000)
5 Annual Budget Tables (Operating & Capital)
6 Budget Related Charts and Explanatory Notes
CHART 1 ‐ OPERATING REVENUE BY SOURCE
CHART 3 ‐ CAPITAL EXPENDITURE BY VOTE
CHART 4 ‐ CAPITAL FUNDING BY SOURCE
Supporting Documentation
Lukhanji Municipality
Start of the third phase of the IDP (project discussions begin, preparation of the basic components of the IDP for submission no later than the end of February 2013). Presentation of the final draft of the implementation of services and the budget execution plan to the executive mayor for approval.
Political Oversight
Alignment of Budget with Integrated Development Plan
Every year the IDP must be reviewed as required by the Municipal Systems Law and the MFMA. This section should give readers a good understanding of what the IDP contains and how it drives budget allocations.
Vision
The intention is not to attach the IDP as an attachment or to repeat everything in the IDP. However, it is critical that the user of the budget documentation obtains a good high-level overview of the IDP and is referred to the detailed IDP documentation.
Mission
This should be reviewed in terms of performance in achieving outcomes and outputs, as the current financial position and the future fiscal outlook for the municipality will have a direct impact on delivery. The review should ensure that the plans are still within the financial capacity of Lukhanji.
Value
LUKHANJI DEVELOPMENT TARGETS FOR 2014/2019
The tables contained in the following pages attempt to align the draft budget with the IDP
To ensure that 90% of our households have safe places to dispose of rubbish and waste by the end of 2015. Service delivery To ensure that 90% of households have safe places to dispose of rubbish and waste.
Free Basic Services
Some of these policies are existing policies that have been revised, while some are new policies that must be considered by the council for approval along with the final budget. This section seeks to provide a broad overview of some of the budget policy framework and highlight the amended policies that need to be approved by council resolution.
Investment of Funds, borrowing and cash management
Supply Chain Management Policy
Unforeseen and Unavoidable Expenditure Policy
Adjustment budget Policy
Debt Management Policy
Write Off Policy
Arrangements Policy
New Policies to be considered by Council
- ICT Policies 2. Virement Policy
- Interest Rates
- Equitable Share Allocation 118 301 000 127 277 000
- Water/Sanitation Subsidy 46 935 370 49 282 138
- New Capital Purchases 1 979 250 1 958 000
- New Debt Payments 378 479 374 415
- Library Allocation 4 150 000 4 150 000
However, it should be noted that some of these guidelines had to change during the year due to the dynamic nature of the economy. As a result of this development, these two functions have been removed from the final budget that will be presented to council on May 30, 2014.
General inflation outlook and its impact on the municipal activities
Interest rates for borrowing and investment of funds
Rates, tariffs, charges and timing of revenue collection
Cost Reflective tariffs
As a result, the municipality performs the water and sanitation services under an agency agreement with Chris Hani Municipality. Due to the takeover of the water and sanitation function by the District Municipality, the municipality only has the following major rates: Waste, Electricity and Property rates.
Collection rates for each revenue source and customer type (for more detail see section 15 – revenue by source and vote)
The municipality was about to implement a sharp increase in water tariff for the 2014/15 financial year. The municipality started a project plan last year to improve the collection of the various billed services through a project management plan that addresses many different areas of the billing and collection cycle.
Average salary increases
For this purpose, the municipality has been focusing its attention in recent years. The municipality will end 2013/14 with enough money at the end of the financial year to pay off all its creditors.
Funded verses a Balanced budget: Table SA 10
Financial Indicators – Table SA 8
Capital Costs for Own Income Financing Costs & Repayment of Loans / Own Income. Volume (units purchased and generated minus units sold)/units purchased and generated Employee Cost Employee Cost/(Total revenue - capital . revenue).
Sources of Funding
Item Billed (000’s) Cash (000’s)
Property Rates
Electricity Tariffs
Water and Wastewater Management Tariffs
Refuse Collection
Deposits - Public Deposit Corporation Bankers' Acceptance Certificates Transferable Certificates of Deposit - Bank Guaranteed Subsidy Policies (Sinking) Repurchase Agreements - Bank Municipal Bonds. Deposits - Public Investment Commissioners Deposits - Corporation for Public Deposits Bankers Acceptance Certificates Transferable Certificates of Deposits - Banks Guaranteed Subsidy Policies (Sinking) Repo Agreements - Banks.
The following is a listing of grants included within the budget and a brief description of each
MUNICIPAL INFRASTRUCTURE GRANT
MUNICIPAL SYSTEM IMPROVEMENT PROGRAMME
LOCAL GOVERNMENT FINANCIAL MANAGEMENT GRANT
INFRSTRUCTURE SKILLS DEVELOPMENT GRANT
EXPANDED PUBLIC WORKS PROGRAMME
11.9 -Table SA 18 - Transfers and grant receipts
The largest single potential source of revenue for the municipality is the collection of invoiced rates and rates. In addition, the completion of the valuation of properties in the municipality is crucial for the financial future.
13 Disclosure on Salaries, Allowances and Benefits
EC134 Lukhanji - Supporting Table SA23 Salaries, allowances and benefits (political office bearers/councillors/senior managers). EC134 Lukhanji - Supporting Table SA22 Summary of board member and staff benefits Summary of Employee and Board Member.
14 Table SA 25 - Budgeted monthly revenue and expenditure Table SA 26 - Budgeted monthly revenue and expenditure
Municipal Vote)
15 Measurable Performance Objectives (Revenue Source and Vote)
16 Disclosure on Implementation of MFMA & Other Legislation
17 Budgets and SDBIPs – Departmental / Functional (internal)
Service Delivery Unit Government Financial Statistics (Stem) Classification Administration and Human Resources 1110-00 Finance and Administration.
18 Budgets and SDBIPs - Entities & Other External Mechanisms The municipality has no entities
19 Summary of Detailed Capital Plans
EC134 Lukhanji - Supporting table SA34b Capital expenditure for renewal of existing assets by asset category. Property charges - fines and collection fees Service charges - electricity revenue Service ice charges - water revenue Service ice charges - sanitary revenue Service ice charges - refusal revenue Service ice charges - other Rental of facilities and equipment List of other sources of revenue if applicable Entity summary list.
Lukhanji Municipality BUDGET
APPENDIX A
RATES AND TARIFFS
ELECTRICITY CONNECTION FEES
The funds now belong to the municipality, which will be responsible for all maintenance and repairs in the future. There is no benefit for the customer, so the municipality is responsible for supplying the relay free of charge. iii).
ALTERATIONS AND ADDITIONS TO EXISTING SERVICES
FAILURE TO KEEP APPOINTMENTS FOR INSPECTION AND
FAILURE TO SUBMITT COMMENCEMENT FORMS
All units include an additional 1.5 cent NER approved upgrade charge. This charge is not applicable to customers receiving 50 kw of free electricity.
BULK SERVICES CONTRIBUTION LEVY
GAME RESERVE ENTRANCE FEES : VAT Inclusive
CEMETERY CHARGES EXCLUDING VAT
THOBI KULA INDOOR SPORT CENTRE FEES
Up to five installations per premises per installation R 100.00 Over five installations per premises per installation R 15.00 Money in (a - c) above will not be refunded if an event is canceled for any reason.
These rates will not apply to the following: Local Schools, Welfare or non-profit making. Any valuation certificate or certificate of outstanding balance against a property excluding certificates in terms of Section 96 of Ordinance 20 of 1974.
NOTE; All are Excluding the Overtime Costs of the Caretaker)
ADMINISTRATIVE MATTERS
MUNICIPAL BUILDINGS : RENTALS
ADMINISTRATION AND HUMAN RESOURCES
APPENDIX B
NEW AND REVISED POLICIES
Lukhanji
Municipality
Write off Policy
- Introduction
- Authorisation Levels
- Detail of Debt To Be Written Off
- Write Off Criteria
Any property sold after the depreciation is awarded the full amount to be recovered on sale. Any property sold after incentive is awarded, 50% of the amount to be recovered from sale.
Arrangements Policy Lukhanji Municipality
- Principles to be applied
- Arrangement Requirements for all Customers
- Domestic Indigent (or Destitute Indigent) Customers (with municipal electricity service) Arrangements
- Domestic Customer Arrangements
- Business Customer Arrangements
- Collection Processes
- Breach of Arrangements
The poor customer will be required to regularly pay his current monthly bill every month. The domestic customer will be required to pay 10% of the debt before the arrangement is made.
INDEX
PREAMBLE
DEFINITIONS
- Principles
- Duties and Functions
- Duties and Functions of Council
- Duties and Functions of the Executive Mayor 2.3 Duties and Functions of the Municipal Manager
- Duties and Functions of Communities, Ratepayers and Residents 2.5 Duties and Functions of Ward Councillors
- Area of Application 4. Application for Services
- Customer Service Agreements 6. Deposits and Guarantees
- Metering of Consumable Services 9. Valuation
- Customer Assistance Programmes 1 Water Leak Rebate
- Rates Rebate
- Arrangements for Settlement 10.4 Payment of Rates by Instalments
- Government departments 12. Communication
- Payment Facilities and Methods 14. Enquiries and Appeals
- Debt Collection 16. Meter Readings
- Reporting and Performance Management
- PRINCIPLES
- DUTIES AND FUNCTIONS
- Duties and Functions of Council
- DUTIES AND FUNCTIONS OF EXECUTIVE MAYOR
- DUTIES AND FUNCTIONS OF THE MUNICIPAL MANAGER
- DUTIES AND FUNCTIONS OF COMMUNITIES, RATEPAYERS AND RESIDENTS
- DUTIES AND FUNCTIONS OF WARD COUNCILLORS
- AREA OF APPLICATION
- APPLICATION FOR SERVICES
- CUSTOMER SERVICE AGREEMENTS
- DEPOSITS
- ACCOUNTS AND BILLING
- METERING OF CONSUMABLE SERVICES
- VALUATION OF PROPERTIES
- CUSTOMER ASSISTANCE PROGRAMMES
- WATER LEAK REBATE
- RATES REBATE
- ARRANGEMENTS FOR SETTLEMENT
To monitor the performance of the Executive Mayor (Supervisory Authority) regarding credit control and collection. 1 (i) Implementation and enforcement of the municipality's customer care, credit control and collection policy and any bylaws issued pursuant to section 98; and.
10.4. PAYMENT OF RATES BY INSTALMENTS
- GOVERNMENT DEPARTMENTS
- COMMUNICATION
- PAYMENT FACILITIES AND METHODS
- ENQUIRIES AND APPEALS
- DEBT COLLECTION
- METER READINGS
- THEFT AND FRAUD
- APPLICATION OF THE POLICY
The customer acknowledges that any agent used to transfer payments to the municipality is at the customer's expense and risk. In addition, the customer must take into account the transfer time of the relevant agent.
PROVINCE OF THE EASTERN CAPE
LUKHANJI LOCAL MUNICIPALITY
GIFT,REWARDS AND FAVOURS POLICY
Lukhanji Local Municipality
- Other matters
- Definitions
- OBJECTIVE
- GENERAL PRINCIPLES
- SECTION 9 STATES
- SECTION 8 STATES
- Value of Gifts, Rewards or Favours
- Register of Rewards, Gifts and Favours
- Responsibility of Councillors and Staff Members
- Authority to Accept Rewards, Gifts or Favours
- Accountability
- Enforcement
- INTRODUCTION
- of the Municipal Finance Management Act (Act No. 56, 2003) states
- OBJECTIVE
- SCOPE
- DEFINITIONS
Treasury guidelines” any guidelines on supply chain management issued by the Minister of Finance in terms of section 168 of the Municipal Financial Management Act;. Ensure that all sales in terms of section 14 (5) of the Municipal Financial Management Act (Act No) are fair, equitable, transparent, competitive and in accordance with the Supply Chain Management Policy of the municipality.
TREASURY REGULATION
This policy will apply to all redundant, obsolete, unusable assets, namely vehicles, office furniture, office equipment, computer equipment, other machinery and equipment, and inventory.
Treasury Regulation 16A3 stipulates the following
16A7.7 The Accounting Officer or Accounting Authority must, when disposing of computer equipment, first contact any government institution involved in education and/or training to determine whether such institution requires such equipment. In the event that computer equipment is required by such a government institution, the Accounting Officer or Accounting Authority may transfer the equipment free of charge to the identified institution.
Treasury Regulation 10.1.1 and 10.1.2 state
16A7.1 Disposal of movable property must be done at a market-related value or in the form of price offers, competitive bids or auction, whichever is most advantageous to the state. 16A7.2 Notwithstanding the provisions of section 16A7.1, the accounting officers and accounting authorities may transfer chattels to other departments, constitutional institutions or public entities free of charge by means of formal attachments.
The Accounting Officer must ensure that processes [whether manual or electronic] and procedures are in place for the effective, efficient,
DISPOSAL
ASSET
ASSET REGISTER
REDUNDANT ASSETS
OBSOLETE ASSETS
UNSERVICEABLE ASSETS
SERVICEABLE ASSETS
CIRCULATION
COUNCIL
CHAIRPERSON: DEPARTMENTAL DISPOSAL COMMITTEE
DEPARTMENTAL DISPOSAL COMMITTEE
CONFIRMING AUTHORITY
SELL BY QUOTATIONS/TENDER
DISPOSAL CERTIFICATE (VA27)
ACQUISITION OF ASSETS
MARKET VALUE
FAIR VALUE
CARRING AMOUNT
SUBSTANTIVE ASSSET VALUE
DEPRECIATION
ACCUMULATED DEPRECIATION
BASIC MUNICIPAL SERVICES
KINDS OF MOVEABLE ASSETS MANAGED BY THE MUNICIPALITY
TREASURY REGULATIONS
BROAD BASED BLACK ECONOMIC EMPOWERMENT ACT
SUPPLY CHAIN MANAGEMENT
ASSET MANAGEMENT GUIDELINES
- ROLEPLAYERS & THEIR FUNCTIONS 1 ASSET MANAGEMENT OFFICIALS
- MUNICIPAL DISPOSAL COMMITTEE
- COMMON REASONS FOR DISPOSING OF ASSETS
- DEPRECIATION ON DISPOSAL
- PROCESS OF ASSET DISPOSAL
Detailed records of the activities of the Disposition Committee must be kept at all times. The Confirming Authority is responsible for evaluating and approving the recommendations of the Disposition Committee.
ASSESS THE CONDITION OF ASSETS
DECIDE WHICH ASSETS ARE TO BE DISPOSED ESTIMATE THE MARKET/ NET REALISABLE
FACTORS TO CONSIDER IN DISPOSAL
SELECT THE APPROPRIATE DISPOSAL METHOD
OBTAIN APPROVAL FOR THE DISPOSAL PROCESS
PREPARE FOR DISPOSAL
ESTABLISH CONDITIONS OF DISPOSAL EFFECT THE DISPOSAL
RECORD THE DISPOSAL PROCEDINGS EVALUATE THE DISPOSAL PROCESS
Assessment of Assets
Once these assets have been identified by the Asset Inventory Holders or Asset Management Officials, they must be notified in writing to arrange for the removal committee meeting to dispose of the identified assets. The list and the prescribed forms are submitted to the Removal Committee for checking and validation during the removal meeting.
Estimate Value of the Asset
The disposal section of the Supply Chain Management Unit shall be responsible for its decision to dispose of assets and shall document the decision and the reasons for the disposal of movable assets.
Methods of disposal
- Different methods to which assets can be disposed off
- Disposal by means of selling per price quotation, competitive bid or auction or by means of an auction to all registered buyers
For assets with a value of less than R200 000, an advertisement inviting the public will be placed in local councils and wherever possible. For assets with a value of more than R200 000, an advertisement inviting the public will be placed in local boards, website and local newspapers widely read in that particular area where the auction/sale by price quotation is to be held.
Selling by means of price quotations
