LOUIS TRICHARDT – The 2002/2003 budget for the Makhado Municipality may hold a few nasty surprises for local residents. Judging by what transpired at the informal discussions, consumers may be asked to pay a lot more to help Council make ends meet.

One of the most serious stumbling blocks for Council is the ever-increasing salary bill. In the previous financial year the salary bill represented over 35% of the total budget. The national norm is between 25% and 30%. This is sure to rise even more with extra demands for vacant positions to be filled immediately. Last year Council budgeted for a salary bill of R40,39 million, a figure that is set to rise dramatically.

A further problem with the salary bill is the demand for increases. Council last year proposed a general increase of 7%, but seemingly want to implement a 5,5% increase in the coming year. The trade unions want a 15% increase with a minimum salary of R2 500 per month. The current minimum salary is R1 900 per month. Officials have also asked for an increase in salary to make provision for their increased area of jurisdiction.

When the municipality's jurisdiction area increased, almost 500 officials were transferred or seconded to the Makhado Municipality. These officials were previously employed by government departments or by the various smaller municipalities. The government still pays the salaries of these members of staff, but the local municipality must cover the cost of "extras" such as salary increases, overtime and membership of the group insurance fund.

These seconded officials will soon have to become a permanent fixture on Council's payroll, as the subsidies are set to end within the next two or three years. This will add additional pressure to an already over-exhausted budget.

Demands for various capital projects are also much more than Council can afford. Capital projects include projects such as housing, electrification and the building and reconstruction of roads. In any municipality the Independent Development Programme (IDP) is used as a guideline. The IDP can also be seen as a compilation of needs identified by the community and gives guidelines on which needs should be addressed first. The needs identified by communities for 2002/3 amount to over R600 million. Seeing that funds for these projects are not readily available, Council will have to look at its Operational Budget for financing. Should Council opt to finance capital projects via this route, tariffs might rise with between 23% and 30%.

One positive aspect for local consumers is that by law Council has to abide to certain limits set by the Minister of Finance. This includes a limit of 4,5% for the increase in the budget compared to that of the previous year. It will, however, be extremely difficult for Council to cater for the salary increases, Eskom's increase of 6,5% from January 2003 and other factors such as the increase in the petrol price. The budget will probably be tabled later this month.