MAKHADO (LOUIS TRICHARDT) – Taxpayers will see an overall increase of 5% in rates and taxes, following Council’s approval of their R207 990 442 operating budget for the 2005/6 financial year on Tuesday.

The 5% increase in rates and taxes is 0.25% less than that of the 2004/5 financial year, while the total operating budget showed a decrease of roughly 7% from last year. The decrease in the operating budget was brought about by the transfer of water supply services to the Vhembe District Municipality.

Council’s projected salary bill (personnel estimates) for the 2005/6 financial year is R77,4 million, which constitutes 33% of the total operating budget. Although it is a generally acceptable accounting principle that personnel estimates should not exceed 30%, Council says the 33% is within the acceptable guideline of the National Treasury, which is between 30% and 35%.

Have we succeeded?

In his budget speech, Mayor Rhulani Nkuzana referred to the upcoming municipal elections. He said that this is the last budget to be tabled and debated by the present Council before they are asked by the electorate to officially vacate their seats.

“As we proudly bow out of office, the critical question we have to ask ourselves is: Have we succeeded in the past four years to bring a better life to our people?” Cllr Nkuzana said.

Cllr Nkuzana said a lot of progress has been made by the municipality during its term in office in as far as the delivery of basic services is concerned.

“Amongst other, we have been able to provide our people with electricity, water, better roads and houses, bursaries, etc. However, it must be strongly emphasized that we were not able to move with greater speed than we expected, as a result of a number of challenges, finance in particular,” Cllr Nkuzana said. He added that, by all employees’ working together, Council will be able to do more than that they have achieved to date.

Capital Estimates

The capital estimates, based on the priority list as contained in the Integrated Development Plan (IDP), for the 2005/6 financial year amount to R41 638 251. This is far less than the R77 253 700 budgeted for last year. The decrease came about as the contribution of the Vhembe District Municipality (totalling just over R48 million last) year, does not form part of Council’s budget this year with the transfer of services. The Vhembe District Municipality has, however, committed a total amount of R42 520 145 for, amongst others, electricity (R4 200 000), water and sanitation (R35 117 819) and roads and bridges (R3 202 326). These projects will be implemented by the Vhembe District Municipality.

This year’s capital estimates will be financed by operating income (R8 362 451), Municipal Infrastructure Grant (R23 283 000), National Electrification Programme (R4 503 000), INEP (R360 000), Finance Management Grant (R626 800) and INCA (R4 500 000).

Projects to be funded from the capital estimates include, amongst others, road surfacing, the electrification of Ward 35 and Tshikota, the purchase of an additional refuse truck, the purchase of vehicles, equipment and furniture, the LED Youth Farming Project and land claims and other services.

Operational Budget

As stated before, the operating budget for the 2005/6 financial year is less than that of the previous financial year. The original deficit on the operating budget was in excess of R10,5 million and had to be reduced, which resulted in a surplus of R248 939. This financial year Council’s salary bill again constitutes a third of the total budget.

Increase in Tariffs

Electricity tariffs will increase by 4,5%, while other tariffs will be increased by 5,5% with effect from July 1 this year. This brought about an overall increase of only 5%.

The assessment rates will increase from 8,2 cents to 8,65 cents per Rand of the site value of any right of interest in land that is listed as rateable property. A 100% remission will be granted to the owners of agriculturally rateable properties held in private ownership. Furthermore, a maximum assessment rate rebate of 40% will be granted to all property owners who are 60 years or older and whose combined annual income does not exceed R42 000 (R3 500 per month).

Revenue and Expenditure

Council’s budget for the 2005/6 financial year projects a revenue of R234 431 088. Most of the revenue will be derived from grants from National Government, to a total of R96 683 000. The other major source of income will be electricity supply, totalling R86 969 850.

On the other hand, Council’s projected expenditure totals R231 273 646 with R77 400 648 going towards salaries. General expenditure makes up R67 280 915 of the bill, while the maintenance bill and contribution to capital each amounts to just over R36 million.