The Vhembe District Municipality (VDM) presented its draft budget last week at a public hearing at the Makhado Show Hall.

The presentation of the draft budget for 2012/13 was made by Vhembe Councillor Dr FP Mdaka, the finance portfolio head. VDM has service level agreements with four local municipalities, namely Thulamela, Makhado, Mutale and Musina. Draft figures for 2013/14 and 2014/15 were also supplied.

The total draft budget for 2012/13 is R1 042 million, of which the capital budget is close to R503 million (48%) and the operational budget R539 million (52%).

Vhembe’s capital budget will be spent on water services projects, sewer projects, rural sanitation, roads and capital outlay. With water being a vital commodity, it is understandable that R373 million, or 74% of the R503 million, is earmarked for water services projects.

The bulk of the R373 milliion will go to water projects in the Thulamela Municipality, where nearly R262 million has been budgeted. Of the rest of the amount for water, R77 million will go to Mutale and R34 million to the Makhado Municipality. R20 million has been allocated to sewer projects in Makhado and R8 million to Thulamela. The budget for sewerage forms close to 6% of the capital budget. R26 million (roughly 5% of the capital budget) is allocated to rural sanitation and all of it will be used in Thulamela. The budget for roads constitutes close to R22.4 million or 4 % of the capital budget.  Of that amount, R13,5 million has been allocated to Thulamela, nearly R4.9 million to Musina and R4 million to Makhado.  The rest of the capital outlay (11% or R53 million) is for VDM.

The operational budget of R539 million consists of, among others, employees-related costs (salaries) of R372 million, which forms 69% of the operational budget and close to 36% of the total expenditure. Add the close to R9 million for the remuneration of councillors and the salaries total R379 million. The budget for VDM’s general expenses is R99 million (10% of the total budget and 18% of the operational budget) and R59 million for repairs and maintenance. That forms 6% of the total budget and 10% of the operational budget.

What are the sources for VDM’s needed revenue of R1 042 million? VDM will receive a conditional grant of close to R476 million and an unconditional grant of R476.4 million. The VAT refund of SARS is expected to be R44 million and water sales will collect R41million. Interest will amount to R4 million and R600 000 will come from unspecified other sources.

While the budget for 2012/13 totals R1 042 million, it will rise in the next year to close to R1 105 million and in 2014/15 to R1 146 million.

"Despite all the economic disarray, the municipality has a mandate to create a better life for all by providing basic services to the community," were the final words of VDM on their budget presentation.