Newcastle Mayor delivers 2017/2018 draft budget

NEWCASTLE – What lays in store for Newcastle during the 2017/2018 financial year?

During the State of the Town Address by Newcastle Mayor, Makhosini Nkosi, it would seem that Newcastle Municipality has its work cut out for the year.

“This year marks 23 years since the dawn of democracy and 21 years since the passing of the Constitution, which gave rise to the rights of all citizens enshrined in the Bill of Rights. This means, we as government need to move with speed to redress past imbalances. This will assist us to restore the dignity of our people who were stripped of their rights over 300 years of colonialism,” said Cllr Nkosi.

Acknowledging the current administration was faced with a different set of challenges than the previous administration, Cllr Nkosi emphasised the new administration was mindful of commitments made during the build-up to the 2016 elections.

“Many people have been asking me why I am keeping my hair and beard, as I usually don’t keep hair at all. My answer is very simple, I will not cut my hair until we as the municipality are able to cut the grass to the satisfaction of the people we are leading,” he said.

While determined to make a positive contribution, Cllr Nkosi admitted the municipality was experiencing severe financial challenges.

“Inevitably, this will affect our capability to render services. We are working hard to cut out luxuries and we are improving our collection rate.”

Despite the lack of finances, inadequate supervision of the workers contributed to the problem.

What Newcastle can expect from the Draft Budget:

Municipal income

During the 2017/2018 financial year, the municipality is expecting the following operational revenue:

R696.6-million from the sale of electricity

R172-million from the sale of water

R110-million from sewer charges

R89-million from refuse removal

R283-million from rates

“These are our primary sources of revenue and they are expected to contribute to about R1.3-billion to the projected revenue. This represents 77 per cent of the total projected revenue,” Cllr Nkosi explained.

Social grants will contribute to R344.9-million to the operating revenue, while fines will generate R5.2-million.

A further R8-million will be collected from the rental of facilities such as municipal flats and houses, and another R17.7-million will be generated from the municipality’s sundry revenue.

Municipal expenditure

Major expenditure to be incurred on bulk purchases and employee related costs includes R494-million for electricity, R66.7-million for uThukela Water, R15-million for the Department of Water Affairs and R3-million for water purchase for Charlestown.

A staggering R514.7-million will be spent on employee costs, and only R30-million will be appropriated for overtime in respect of essential services.

Another R45.1-million will be spent on municipal infrastructure maintenance, while R92 million is projected to fund indigent subsidies, for example water.

Rates and services increase

It is proposed to increase the following services accordingly:

Property rates by seven per cent

Electricity by 1.88 per cent

Water by seven per cent

Refuse removal by seven per cent

Capital budget

The 2017/2018 capital budget is R234 127 702, which is allocated as follows:

Roads infrastructure improvements: R89 113 702

Water and sanitation: R120 589 000

Electricity roll out: R9 000 000

Extension of Newcastle Library: R5 425 000

Building of the new library in Charlestown: R10 000 000.

“The capital budget is funded mainly by allocations by the National and Provincial Governance in the form of grants, as well as a minor portion of internally provided funds.

Cllr Nkosi concluded the evening by thanking municipal staff and councillors for their contribution.

He also thanked the Executive Committee for foregoing 50 per cent of their salaries, in an attempt to minimise expenditure during the current financial difficulties.

“I would like to emphasise that this is a draft budget. We will be going out on a consultation process on it. We expect all individuals and stakeholders to make constructive criticisms and make recommendations. We will also welcome all sorts of inputs and submissions that will positively influence the second draft and the final budget before it is approved,” Cllr Nkosi concluded.

  AUTHOR
Quinton Boucher
Journalist

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