NULL Kouga local municipality
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Last modified: 10 Jun 2019
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Council approves budget for 2019/2020

30 May 2019

Kouga Municipality’s new budget and tariffs for the 2019/2020 financial year, starting on 1 July, were approved by the Council on 30 May 2019.

Executive Mayor Horatio Hendricks said every effort had been made to ensure that the budget was pro poor and fully funded.

According to the approved budget, Kouga’s total operating revenue for the new financial year will increase to R836,693 million. This is 10,06% or R76,46 million more compared to the 2018/19 adjustments budget.

Hendricks said the operating budget was dependent on the municipality maintaining a collection rate of 96%.

“It will be funded from various sources, the major contributors being electricity (33,11%), property rates (23,51%), operating grants and subsidies (15,91%), water (9,1%) and refuse (6,42%),” he said.

The total operating expenditure for the 2019/2020 financial year amounts to R897,137 million, with the major operating expenditure items being employee-related costs (32,43%), bulk electricity purchases (25,9%) and depreciation (9,49%). 

“The staff budget provides for a general increase of 6,5% in line with the approved Salary and Wage Collective Agreement. It is encouraging to see that employee-related costs are well below the 35% guideline issued by National Treasury,” he said.

The budget for repairs and maintenance amounts to R43,692 million, of which 66,27% will be spent on infrastructure assets, including, roads and stormwater, electricity, water, sanitation, solid waste, community, sport and recreational facilities.

In order to fund the operating budget, the following increases in property rates and service charges were approved, with effect from 1 July 2019: 

  • Property rates: 6,5%
  • Water: 7,5%
  • Sanitation: 7%
  • Refuse: 7%
  • EMF: 0%
  • Electricity 14,26% (average increase in income).

The Mayor said the municipality had kept tariff increases as low as is possible.

“In some instances, especially when it comes to electricity, this proved to be a challenge, with NERSA giving Eskom the go-ahead to increase its bulk tariff to municipalities by 15,63% from 1 July 2019.” 

Also approved by Council was the capital budget for 2019/20, amounting to R93,11 million.

“This is a sharp decrease of 55,56% or R116,405 million compared to the 2018/19 adjustments budget,” Hendricks said.

“This decrease is due to the Water Services Infrastructure Grant which the municipality received in the 2018/2019 financial year for drought-intervention projects.”

He said the capital budget once again reflected the strides Kouga had made to strengthen its financial position, with 45,1% of R41,994 million of the budget being funded from the municipality’s own income.

The remaining 54,9% or R51,117 million will be funded through government grants and subsidies.