City of uMhlathuze urged to increase capital expenditure

City of uMhlathuze CFO Mxolisi Kunene's presentation of the Adopted Budget was well received

THE City of uMhlathuze’s 2017/19 Adopted Budget was met with decisive approval from the National Treasury.

During a presentation by Chief Financial Officer Mxolisi Kunene at Tuesday’s Exco meeting , the Operating and Capital budget showed a steady projected increase from the present R3 391 270 to R3 403 999 (2017/18) to R3 593 271 (2018/19) and R3 809 515 (2019/20).

Kunene said the budget process was ‘complete and compliant’.

‘The National Treasury rigorously assesses the tabled budgets in terms of quality and compliance with the prescriptions of the MFMA (Municipal Finance Management Act), according to three criteria.

‘The first is credibility, testing whether sufficient political oversight, public participation, the revenue planning framework and priorities are realistic.

‘The second is relevance, testing if the budget is aligned to the IDP as well as provincial and national priorities.

‘The final step is to ensure the long term financial and operational sustainability of a multi-year budget.’

A high-ranking City delegation met with National Treasury on 16 May and was congratulated on their performance.

However, some issues were noted as needing attention:

• The municipality should make greater effort to increase its capital expenditure, especially grant funded projects. ‘They would like us to increase our capex to R1-billion,’ said Kunene;

• It should also clearly indicate what the borrowings are to be spent on in the capex budget;

• The long term financial strategy should be given more prominence in the budget;

• More information should be supplied on the cost of providing free basic services.

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Budget factors

Following budget road shows, significant community inputs were acknowledged.

These included: the need to provide pedestrian bridges, rural sports facilities, agricultural equipment and street lighting; delays in attending to water losses; lack of communication; erratic Eskom electricity supply; need for Fire Station improvements, Jo-Jo tanks and public Wi-Fi.

With the province having been declared a disaster area since the drought in 2014, this has resulted in a decreased water consumption of 13%.

The electricity tariff increase was limited to 1.88% as approved by NERSA.

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  AUTHOR
Dave Savides
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