The Makhado Municipality tabled their annual budget, totalling R464 417 282 for the 2009/10 financial year, on Friday, July 3. It holds few surprises with the municipality’s total salary bill again the main culprit when it comes to expenses.

The budget was tabled amidst looming mass action by the Soutpansberg Ratepayers Association with regard to what they deem poor service delivery by the municipality. Although Makhado Mayor Cllr Mavhungu Luruli did not specifically mention this or the SRPA’s dispute with the municipality, she did acknowledge that the municipality faces challenges, but said she was confident that the municipality would fulfil their role with regard to service delivery effectively.

“We will continue to extend reaching areas that were marginalized in the past, without neglecting those that were well catered for. Therefore, this means that we will strike a balance between the two, with a slight bias towards the previously disadvantage communities that still find themselves in an appalling situation when it comes to service delivery and infrastructure provision,” Luruli said.

Budget in a nutshell

Once again the municipality’s main source of income will be derived from government grants and subsidies to the amount of just more than R186 million, or 40,1% of their total revenue. Their other major source of income will be the sale of electricity, with a projected income of R178 669 000 (38,5%). Rates and taxes comprise just over R31 million or R6,7% of their projected revenue.

As for operating expenditure, salaries, wages and allowances of officials comprise almost 35% of the total operating expenditure, totalling R161 596 000, with just over R17,8 million (3,84%) set aside for councillors’ remuneration. Although listed as two different entries in the budget summary, the municipality’s total salary bill combined takes up almost 39% of the total operating budget.

As one of the municipality’s major sources of income, electricity is also one of the major sources of expenditure, with the bulk purchase of electricity totalling just over R87,6 million or 18,87% of their total operating costs. Repairs and maintenance take up a further R35 million (7,57%) of their operating expenditure.

With a projected income of R464 660 638 and operating expenditure of R464 417 282, the municipality will, according to their calculations, be left with a surplus of just over R240 000. Their total capital expenditure with regard to infrastructure (water, electricity, sanitation etc.) and projects stands at just over R110,5 million, with R66 million coming from their own income.

Rates and Taxes

As for rates and taxes, the average man in the street can expect a general increase of 6% in tariffs, although it is at this stage unclear what the increase in electricity tariffs will be. In June, the municipality advertised a 25% increase in electricity rates as from July 1 this year.

Eskom, however, only afterwards implemented a 31,3% increase in electricity supply. In her budget speech, Luruli said that Eskom’s substantial increase will definitely have an impact on their budget.

“ … we are awaiting the National Treasury to give guidance regarding this increase …,” she said.

Any good news?

But what can be expected from the municipality to justify their huge salary bill? One of their biggest projects listed in the budget is the R195 million development of an inter-module transport complex consisting of a shopping centre and modern taxi and bus terminals. The project will be done in partnership with the De-partment of Roads and Transport and, according to the municipality, land for this development has already been indentified. Where exactly this land is, is not certain at this stage, but in earlier reports regarding this development, the town’s Indigenous Tree Park was labelled as a suitable option. In the past, Council’s continued efforts to have this area developed in the towns sensitive Green Belt area have sparked huge public outcry and controversy.

Electricity

As for infrastructure development and maintenance, an amount of R30 million was budgeted for the electrification of villages in the municipal area. As the existing electrical network also needs urgent upgrading, an additional amount of R18 482 000 was allocated for the 2009/10 financial year. Many say, however, that this amount is still far too little to address the backlog in electricity supply and adequately maintain and upgrade the existing network. The municipality has, however, made huge inroads the past financial year with regard to the building of a new main feeder line into town, replacing the old dilapidated line.

Water

With the Makhado Municipality being appointed Retail Water Service provider, a total amount of just over R42 million was allocated by the Vhembe District Municipality for the development of bulk water infrastructure and ensuring clean drinking water to villages and households. Of this, R20 million was set aside for the water supply pipeline to town, AFB Makhado, Kutama and Sinthumule. An amount of R10 million will go towards the Middle Letaba water scheme, with the rest of the amount being split up amongst other rural villages and regions. Projects with regard to addressing the town’s continued water problems for the coming year include, amongst others, the refurbishment of the Albasini water supply line to town (R15 million), the upgrading of the Albasini water treatment works (R17 million), the refurbishment of the Berg Street Reservoir (R4 million), the development of four new municipal boreholes (R4 million), the refurbishment of the municipality’s existing 14 boreholes (R4 million), the installation of 40 new air valves in the existing water supply system (R3,5 million) and the replacement of 70 control valves (R3 million).

Sanitation

With the recent cholera outbreak which spilled over from neighbouring Zimbabwe still fresh in the memory, sanitation rates as a high priority among residents. With this in mind, the Vhembe District Municipality allocated R50 million for the provision of bulk and household sanitation. Of this, R30 million will be spent in villages within the municipal area, with R20 million going towards Louis Trichardt’s sewerage treatment works. As for the rest of the town’s dilapidated sewerage system, residents will have to wait a little longer. There, however, seems to be light at the end of the tunnel as the upgrading of the system does form part of the municipality’s five year infrastructure plan. An amount of over R30 million is listed for the 2011/12 financial year for amongst others equipping the Vlei sewerage pump station, the upgrading of the Industrial pump station, sewerage network development in Eltivillas and further upgrading of the treat-ment works, as well as the development of new sewage oxidation ponds for the town. As for refuse removal, the acquisition of an additional four refuse removal trucks with a total cost of R9 million is envisaged for this financial year.

Roads

Over the last couple of months, the municipality has refurbished several streets within Louis Trichardt, much to the delight of motorists who had to endure the town’s pothole-riddled streets for years. During the 2009/10 financial year, residents will see the implementation of the second phase of this refurbishment project, totalling R15 million and comprising 15km of streets. An amount of R12 million will be used for the construction of 15km of streets in Eltivillas Extension 1, with a further R7 million going towards the refurbishment of existing streets there. A further R12 million was also budgeted for the refurbishment of 20km of streets in Waterval. Louis Trichardt’s municipal airfield’s runway will also be refurbished to the amount of R2 million, while R3 million will be used for the rehabilitation of the access road to the air-field. Louis Trichardt’s traffic testing station ground will also be refurbished to the amount of R1 million.

Other projects

Other projects listed in the budget for the coming financial year include, amongst others, the refurbishment of a 4km section of the town’s storm water drainage system (R6 million), the construction of an office and ablution block at the municipal animal pound (R600 000), the fencing of the pound (R350 000) to stop the theft of animals impounded, the refurbishment of the municipal airfield office block (R400 000), the re-fencing of the municipal traffic testing station in town (R600 000), the reconstruction of the municipal lapa which burnt down a couple of years ago (R700 000), the fencing of the town rugby field and the development and greening of parks (R1,7 million).