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THE Drakenstein Town Council adopted a moderate budget with increases of 7,5% in rates and taxes, while ratepayers were warned to pay their arrears to ensure that the Municipality can meet its commitments.
Consumers will see an average 7,5% increase in their municipal accounts as from the first of July, as compared to last year's 8,5%.
This is 0,5% more than the guidelines approved to local governments by the National Treasury.
The Operational Expenditure Budget increased from R495 million to R569 million (8,7%).
Executive Mayor Herman Bailey said the increase was limited to 7,5% for all services (property rates, water, infrastructure levy, sewerage and refuse), except electricity which would only increase by 3,5%.
The average increase for a big household will be R112 on the monthly account (6,9%) while a small household will pay R45 more (8%).
To help poor residents, the Council continues the policy to alleviate the effect of the increases.
In the case where the combined value of an erf and house is less than R50 000, no property rates will be payable.
"We are talking of an amount of R3 million," said the mayor.
All households continue to receive the first 6 kilolitre water for free, an amount of R2,8 million.
The present policy where all households receive the first 25 units of electricity for free, will however be changed according to guidelines from national government.
In future only residents with a 20 Amp circuit breaker will receive 50 units for free, at a cost of R3,9 million.
Households with an income of less than R1480 per month, qualify for the indigent subsidy. Such households will receive a rebate on services of R85 per month, at a cost of R2,5 million.
Pensioners above 60 years of age may apply for a reduction in tariffs. This will be subject to certain conditions, such as the value of property. This will cost the Municipality R95 000.
"Thus the total contribution for poor residents comes to R14 million.
Mayor Bailey took the ratepayers who are in arrears, to task in his speech at the budget meeting.
"In order for the Municipality to deliver services, residents have to pay their accounts.
"Our bad debt is still growing, and we have been forced to budget R14 million for the non-payment of services (working capital).
"The current total provision for bad debt, including the amount of R14 million budgeted this year, is R78 million.
"The total outstanding debt is R112 million, and I urge the public to pay their accounts, or if unable to do so, to at least make arrangements with the Municipality."
Bailey said Council decided beforehand that for this financial year, tariff increases would not exceed 7,5%.
"Where the Council decided not to exceed 7,5% in tariff increases, it goes without saying, that expenditure increases will be determined by the increase in income.
"The largest portion of our income is derived from electricity sales, which amounts to 44% of the total income, in the amount of R223 million."
Water sales will realise a further income of just more than R49 million. Sewerage generates R28 million, whilst property rates will account for nearly R77 million. Refuse removal will add a further R34 million to the treasury.
"Another source of income for the municipality is grants and subsidies, to the effect of R18 million."
"When looking at a summary of the capital budget, it is noteworthy to mention that it was necessary to reshuffle R10 million in order to get more money available for specific projects," said Bailey.
The total expenditure on capital projects is R38,69 million plus R4 million of funds transferred from the current financial year.
Some of these capital projects are:
* R10,8 million for the Department of the Town Engineer, of which R1 million goes towards extension of Jan van Riebeeck Drive in Paarl, while R1,76 million has been allocated for the reconstruction of streets and sidewalks;
* R8,7 million for the Electricity Department of which R2,5 million goes towards the distribution of electricity on 66/11KV, and R1,5 million has been allocated for the up-grading of electrical distribution;
* R3,2 million for Community Services; and
* R2,9 million for vehicles.
Salaries and wages form 35% of the budget.
"Our total assets amount to a book value of R664 million. Outstanding loans amount to approximately R110 million.
"Capital charges amount to R61 million, or 13% of the operational expenditure. This includes R15,6 million's interest on external loans, and R45,5 million's worth of depreciation on assets.
"Repairs and maintenance amount to R41 million, or 9% of the total operating expenditure.
"Bulk purchases of electricity and water from outside sources amount to R122 million (25% of the budget). Furthermore, general expenses make up 12% or just more than R59 million of the expenditure.
"Included in these general expenses are insurance of R3,3 million, petrol and diesel of R4,6 million, tyres of R1,1 million, phone accounts of R2,4 million, training levies of R1,6 million, as well as uniforms and clothing of R1,3 million and new connections for electricity, water and sewerage of R4,6 million.
"The growth in expenditure amounts to 14%, and to finance this expenditure, we need to raise the income to balance the budget." |