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Council approves record R826 million budget

 

The budget approved by the Makhado Municipality totals just over R826 million for the new year, but in 2015 this amount will pass the R1 billion mark.

These are some of the figures made available by the mayor, Cllr David Mutavhatsindi, during his State of the Municipality address two weeks ago.

The operational expenses for 2013/14 are expected to be just over R722 million, whereas the predicted income will be R692,5 million. This leaves the municipality with a deficit of R29,5 million. In 2014/15, the deficit will hopefully be reduced to R20,2 million, with a budgeted income of R767,85 million against expenses of R788,08 million. In 2015, the municipality believes the income will exceed the expenses, which will result in a surplus of R20,75 million. This will also the first year that the operational income, together with the capital budget’s income, will exceed R1 billion. The operational budget’s income for that year is estimated at R873,13 million against expenses of R852,37 million.

A big portion of the operating expenses for the next year will be salaries and wages. Mayor Mutavhatsindi mentioned that the municipality budgeted for an overall increase of 6,85%, as guided by the National Treasury. “The total salary bill amounts to R233,57 million, which includes the budgeted positions to be filled,” he said.

Unlike previous years where the municipality had to implement double-digit percentage increases in electricity tariffs, the increase in electricity this year is fairly moderate. “Electricity revenue has been estimated at an increase of 7% as per Nersa guidelines,” the mayor said.

The proposed tariff increase for other services such as refuse removal, is 5,6%. The same percentage increase also applies to sundry tariffs.

The bulk of the municipality’s capital projects will be funded by municipal infrastructure grants (MIGs). This year, R86,7 million will come from this external revenue source. In 2014/15, this grant is expected to increase to R107,17 million and in 2015/16 to R116,11 million.

Income from operational activities is expected to bring in R32,38 million in the next year, which will be used for capital projects. In two years' time, the municipality expects that R53,89 million from operational income will be used for capital projects.

In this year’s budget, R15 million will come from the integrated national electrical programme (INEP). In two years' time, this grant is expected to increase to R25 million. A further R319 765 will come from a financial management grant.

As far as the total budget is concerned, almost R363 million of the expenses will be funded by grants. The biggest contributor will be the equitable shares grant, which provides R256,24 million. The local government financial management grant will contribute R1,55 million this year, whereas the municipal system improvement grant will contribute R890 000.

News - Date: 12 July 2013

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Anton van Zyl

Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.

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