Adjustment budget projects lower income

Adjustment budget projects lower income

THE Kouga Council approved its mid-term adjustment budget at a meeting in Jeffreys Bay on Monday, January 30.

The adjustment budget was tabled to Council by Executive Mayor Booi Koerat in terms of the Municipal Finance Management Act, according to which a municipality may revise an approved annual budget through an adjustment budget following a review of the municipality’s performance during the first six months of the financial year.

Koerat said that finalising the adjustment budget had not been an easy task given that it had to be based on the budget the new Council had inherited from the previous leadership.

“We do, however, believe that it is a step in the right direction,” he said. “It will help us to ensure that our new budget for 2011/2012, which we will start putting together shortly, is realistic.”

The adjustment budget shows a R28-million decrease in the municipality’s expected income for 2011/2012, from the original R497-million to R469-million. Of this, just less than R384-million will be generated from service charges.

An overview of the major increases and decreases are as follows:

·         The annual rates billing has decreased by R4,67m. The decrease in billing is due to adjustments made during the valuation appeal process affecting the valuation roll. The appeal process is ongoing.

·         Electricity income has increased by R14m due to prepaid sales not being included in the original budget.

·         Water income has decreased by R12,7m due to draught tariffs being lifted

·         Sewerage income has decreased by R5,23m due to sewerage removal fees not realising and the availability being less than budgeted for.

·         Traffic income has increased by R2m due to higher fine billings than expected.

·         Land sales of R26m has been removed from the budget.

The expenditure budget decreased from the original R483-million to R468,5-million.

The Mayor said the municipality had been forced to increase the budget for salaries and wages by R6,15m.

“This is partly due to grievances and labour court rulings being settled, settlements with Section 57 employees and EPWP workers being remunerated in advance by the municipality, with reimbursements every three months,” he said. “The new Council is, however, adamant that the amount of money we spend on salaries and wages must decrease and several processes have already been started to address this matter.”

He said Council was also not satisfied that the amount budgeted for repairs and maintenance had had to be decreased but that Kouga was already in discussion with provincial and national government to address the funding needs repairs and maintenance. 

He said the municipality would during the next six months investigate all contracted services as a means of cutting further unnecessary expenditure.

“We are working towards a new 2012/2013 budget that is fully geared towards what matters most – service delivery and the upliftment of our communities,” he concluded.