The Makana council’s draft budget shows that residents will only pay 15% more for their electricity when the new financial year starts in July.
The Makana council’s draft budget shows that residents will only pay 15% more for their electricity when the new financial year starts in July.
A circular from the National Electricity Regulator of South Africa (Nersa), which was recently sent to all municipalities, restricts them to a 15.03% electricity tariff increase.
However, Eskom increased its tariffs by more than 24% at the beginning of this month. Municipalities may still be cushioned from the increase because they buy electricity from Eskom and sell it at an increased price to compensate for their distribution costs.
The revenue generated by municipalities from selling electricity will be used to settle the difference which should be less than 9%.
This manner of trading explains why residents who buy directly from Eskom pay relatively less for electricity than their counterparts who buy from the municipality.
Delivering his draft budget speech during last week’s special council meeting, Makana Mayor Vumile Lwana noted that despite Nersa announcing a 24.8% tarrif increase on bulk electricity it also restricted municipalities to only 15% increases.
“What is surprising is the fact that Nersa has limited municipalities to in turn increase their electricity tarrifs for the respective financial years by 15.03% [2010], 16.03% [2011] and 16.16% [2012], which is a financial disaster for municipalities,” he explained.
“Municipalities who opt for higher electricity tariff increases will have to submit their motivations to Nersa prior to implementing the same.”
The budget allocates a 9.5% increase in salaries of municipal employees and councillors across the board, electricity and 8% tariff increases in water, rates, sewerage and refuse.
The operating budget amounts to R264.4-million as opposed to this year’s R212.6-million.
The final budget and Integrated Development Plan (IDP) must be approved by the council by the end of next month.
The draft budget has to be taken to the community as part of a public participation process. Meanwhile, the municipality requires R11.7- million to fill all the staff vacancies in its departments.
The Rural Outreach Programme has been provided for the next three financial years at R1.4 million, R1.5 million and R1.6-million.
Municipal Manager Ntombi Baart says all efforts must be made to ensure that spending in this allocation is improved so as to avoid the programme being forfeited.
An amount of R6-million from the Equitable Share grant has been allocated to the draft capital budget taking the budget to a total of R129.3-million.
The council unanimously adopted the draft budget which has a R17.7-million deficit. To ensure that the final budget is balanced a Budget Task Team comprising of Baart, budget and treasury portfolio committee head Ntsikelelo Stamper, IDP/PMS Manager Mzo Pasiya and chief financial officer Jackson Ngcelwane was established.
Baart and Lwana have to announce the dates for community participation meetings to consider both the draft budget and the IDP, as required by the law.
Additionally, Makana Municipality has a long standing arrangement with Makana Tourism in an endeavour to ensure that the municipal area is marketed.
The municipality makes annual financial contribution to Makana Tourism in order for it to finance its operations.
Makana Tourism is in turn expected to provide quarterly financial reports as well as audited annual financial statements to the municipality.
The financial reporting attempts to allay the municipality of any abuse of public funds by the organisation. The financial reporting attempts to allay the municipality of any abuse of public funds by the organisation.
Makana Tourism has been allocated an amount of R464 500 in the 2009/10 financial year from R422 280 (2008/09) an increase of 10%.
The allocation for 2010/11 has not yet been confirmed as this is a draft budget. However, the municipality estimates that it will not be less than R460 000.
The total budgeted allowances payable to the councillors amount to R6.6-million while the budgeted allowances payable to the Municipal Manager and directors amount to R5.5-million.
Detailed budgeted salaries and allowances for Section 56/57 employees (2010/11)
| Category | Salary per annum | Transport Allowance (p.a.) | Cellphone Allowance (p.a.) |
Performance Bonus | Total |
| 1 X Municipal Manager | R828 201 | R147 409 | R13 403 | R140 029 | R1 130 401 |
| 1 X Chief Financial Officer | R633 184 | R120 603 | R10 063 | R107 201 | R871 051 |
| Director: Corporate Services | R633 184 | R120 603 | R10 063 | R107 201 | R871 051 |
| Director: Local Economic | R633 184 | R120 603 | R10 063 | R107 201 | R871 051 |
| Development |
|||||
| Director: Community | R633 184 | R120 603 | R10 063 | R107 201 | R871 051 |
| Director: Infrastructural and Social Services | R633 184 | R120 603 | R10 063 | R107 201 | R871 051 |
| Budgeted salaries and allowances for councillors | |||||
| Category | Salary per Annum | Transport Allowance (p.a.) | Cellphone Allowance (p.a.) | Total | |
| 1 X Executive Mayor | R544 800 | R151 933 | R645 235 | ||
| 5 x Members of the Mayoral Committee | R1 709 246 | R569 750 | R2 372 619 | ||
| 1 x Speaker of Council | R200 551 | R66 851 | R279 084 | ||
| 17 x Other Councillors | R2 324 567 | R774 849 | R3 298 001 | ||
| TOTAL |
R1 563 383 | R341 391 | R6 594 939 | ||
