2015/16 INTEGRATED DEVELOPMENT PLAN AND 2015/16 MEDIUM-TERM BUDGET NEWSLETTER

Transcription

1 The City of Tshwane Metropolitan Municipality 2015/16 Integrated Development Plan and 2015/16 Medium-term Budget 2015/16 INTEGATED DEVELOPMENT PLAN AND 2015/16 MEDIUM-TEM BUDGET NEWSLETTE Consolidating service delivery, accelerating service delivery and strengthening the foundations for a new Tshwane: A City of excellence The 2015/16 IDP review marks the last year of the 2011/16 Council term. The City needs to ensure that it concludes the promised deliverables of the five-year IDP that was approved by the Council in May The focus of the five-year IDP was initially to ensure that the basic functions of local government are carried out and that basic services are expanded to more citizens of Tshwane. Key events that shaped the development of the IDP include the following: The merger of the City of Tshwane with the former Metsweding District Municipality and its local municipalities The need to ensure equitable universal access to services for all households in Tshwane The City s financial position at the time as it was influenced by global economic conditions The imperatives by national government which at the time identified interventions to be implemented at local government level to improve service delivery These considerations led to the development of the 2011/16 IDP with its targets and the financial plan as contained in the 2011/ /13 Medium-term evenue and Expenditure Framework (MTEF). During this Council term, the IDP has evolved, while not compromising the five-year focus, to address emerging developments such as the need to have a long-term vision for the city, which was articulated in the Tshwane Vision This strategic emphasis sought to ensure that while shortterm imperatives are addressed, key strategic interventions are identified and planned for to lay a foundation for the capital city that all would like to see in These key interventions towards remaking the city focused on the following thematic areas: Spatial restructuring Promoting liveability estoring dignity through housing Innovative governance solutions Cllr Kgosientso amokgopa Executive Mayor The abovementioned thematic programmes and projects were aligned with the outcomes of the Tshwane Vision 2055, with clear deliverables for the 2014/15 financial year. Most of the interventions that were identified as part of laying the foundation for 2055 are long term in nature and will continue to be delivered in future financial years. The diagram below depicts the evolution. VISIT:

2 The City of Tshwane Metropolitan Municipality 2015/16 Integrated Development Plan and 2015/16 Medium-term Budget TSHWANE VISION 2055 In 2055, Tshwane is liveable, resilient and inclusive and its citizens enjoy a high quality of life, have access to social, economic and enhanced political freedoms and are partners in the development of the African capital city of excellence. The outcomes of the Tshwane Vision 2055 were approved by the Council in 2013 as part of defining the long-term vision for the city. The approved outcomes are as follows: 1. Outcome 1: A resilient and resource-efficient city 2. Outcome 2: A growing economy that is inclusive, diversified and competitive 3. Outcome 3: Quality infrastructure development that supports liveable communities 4. Outcome 4: An equitable city that supports happiness, social cohesion, safety and healthy citizens 5. Outcome 5: An African capital city that promotes excellence and innovative governance solutions 6. Outcome 6: South Africa s capital city with active citizens who are engaging, aware of their rights and who present themselves as partners in tackling societal challenges These outcomes have been designed to incrementally measure the City s success during the four decades of game-changing as depicted in the diagram below. To implement the Tshwane Vision 2055 during the current Council term, the 2014/15 IDP aligned the strategic objectives as follows: Providing sustainable services infrastructure and human settlements Promoting shared economic growth Ensuring sustainable, safer communities and integrated social development Promoting good governance and active citizenry Improving financial sustainability Continuing institutional development, transformation and innovation The outcomes and strategic actions of the Tshwane Vision 2055 as well as the strategic objectives of the IDP frame the City s identified long-term catalytic projects which were introduced during the 2011/16 Council term. These are the implementation tools of the Tshwane Vision 2055 and the anchors that will keep the vision alive. The following sections provide the medium-term strategic focus of the City in line with the Tshwane Vision 2055 outcomes. The key informants for the 2015/16 IDP review The 2014 national elections, the GCO Quality of Life Survey which reflected that the City of Tshwane is the most liveable city in Gauteng, as well as the call by the Minister of Cooperative Governance to get back to basics contributed to the process of the IDP review. The annual audit by the Auditor-General also guided the review process and assisted in refining key performance indicators and processes of reporting. These are reflected in the following diagram.

3 The City of Tshwane has also heeded the request of the Premier of Gauteng to establish a service delivery war-room and embarked on a campaign to fast-track and promote visible service delivery in the form of the Kuka Maoto campaign. The war-room service delivery response teams, which are composed of regional executive directors and other technical personnel, are functional and the City is in a process of institutionalising them into its daily processes. The war room and its activities have the following functions: To radically and comprehensively improve the level and quality of service To build a cohesive, integrated and collaborative network of service response systems from ward to regional and central municipal level To activate, mobilise and organise existing capacity, including strengthening local partnerships To promote optimal use of resources to effect a qualitative shift in how people s needs are identified, responded to and resolved To build an active public service which is responsive to the direct needs of the people 2015/16 IDP focus areas The following focus areas were identified in order to achieve the commitments made during the current term of office for 2015/16: 1. Provision of basic services Completion of existing capex projects with confirmed commitments with the focus on creating infrastructure assets in the townships Continued rollout of 240 l bins to achieve the five-year IDP target Prioritisation of the maintenance of assets, including asset refurbishment to support economic growth and maintenance of aging infrastructure eduction of water and electricity losses 2. Urban management Formation of rapid result teams to unblock delayed projects (accelerated urban management) Implementation of the egional Operations Centre (OC) Maintenance of transport facilities in the northern areas of Tshwane ecruitment of technical staff to assist in the regions (artisans, drivers, etc) 5. Economic development Aggressive implementation of Tshepo through basic services and regional service delivery activities Development of township economies in line with the national government s seven pillars (State of the Nation Address) 6. Acceleration of free Wi-Fi and A e Yeng Setting firm targets on free Wi-Fi hot spots based on catchment gaps Meeting all A e Yeng targets and increasing utilisation of the service 7. Sustainability and alternative energy Implementation of identified off-balance-sheet projects Expansion of separation-at-source initiatives Installation of energy-efficient infrastructure in identified townships Upscaling of streetlight retrofitting and installation of new LED lights The Council also emphasised the need for the City to make progress on some key off-balance-sheet catalytic projects which include the following: Construction of Tshwane House must commence Sustainability projects must be implemented without delays: - Fast-track greater than 1 MW electricity generation projects (shortlist and implement) - Continue programme to retrofit street lights and other projects, including the alternative energy project in Zithobeni - Install solar panels in Centurion on the City s budget - Develop an alternative energy strategy for the city and update the City policy framework to create an enabling environment for implementation of the City s sustainability projects - Write up a case study of the Bronkhorstspruit Bio-gas Project etrofitting of street lights Commencing construction of African Gateway Land release for Government Boulevard urban management Commencing refurbishment of Schubart Park for West Capital Project ooiwal and Pretoria West Power Stations investigate and finalise future potential These priorities have informed the IDP and the MTEF for the 2015/16 financial year to ensure that the commitments made in the current term are achieved. 3. Formalisation of informal settlements Provision of basic services to informal settlements Increase of access to rudimentary services in informal settlements to achieve the national norms and standards Metering of formalised townships to allow residents to pay for services, thereby increasing the revenue base of the City Centralisation of funds for all formalisation work with the e Aga Tshwane team 4. Conclusion of social services and recreational facilities Conclusion of existing projects such as Gazankulu Clinic, Zithobeni Clinic and the Atteridgeville Clinic dispensary (Soshanguve and ayton Clinics are to be completed) Achievement of health index as set in the five-year IDP Provision of resources regarding nurses in the clinics to adequately cater for new clinics to be opened in the 2015/16 financial year Expansion of access to basic services for indigent households (and update FBS allocations) Development of a standard for all parks to allow for monitoring and social deriving value Deployment of graduated TMPD officers

4 2015/16 MTEF THE BUDGET How much is generated from service charges? The budget is a valuable tool for keeping the community involved in and informed about what the City of Tshwane is doing to serve Tshwane s residents. The preparation of the budget is directly informed by the needs expressed by the community through the Integrated Development Plan (IDP) process. Unfortunately, needs always exceed affordability. With reference to section 16(1) of the Municipal Finance Management Act (MFMA), every municipality must prepare and adopt a budget for each financial year. The financial year of a municipality runs from 1 July of each year to 30 June the following year. The approval of a municipal budget is one of the most important tasks undertaken by councillors, after consultation with ward committees and other stakeholders. The budget of the City of Tshwane consists of a capital and an operating budget: The capital budget is directly informed by needs expressed by the community through the IDP process. oad construction and electricity distribution networks are examples of such needs. The operating budget deals with the day-to-day costs to deliver municipal services to the community and the income available for this purpose. EXPENDITUE The 2015/16 operating expenditure totals 25,1 billion, which represents an increase of 4,7% against the 2014/15 adjustment budget and will escalate to 29,4 billion in 2017/18. How will the money be utilised? It is of utmost importance that residents pay their municipal accounts in full and by the due date so the City can: Deliver services in a sustainable way; Develop infrastructure for economic growth; and emain financially viable. OPEATING BUDGET 2015/16 EVENUE The 2015/16 operating revenue amounts to 25,7 billion (excluding capital grants and subsidies), which amount represents an increase of 4,9% against the 2014/15 adjustment budget and will escalate to 30,2 billion in 2017/18. Transfers and grants 1% Contracted services 8% Other materials 1% Other expenditure 15% Bulk purchases 34% Finance charges 4% Employee related costs 28% Debt impairment 4% Depreciation & asset impairment 5% Where does the revenue come from? Some of the programmes accommodated within the budget: CCTV 39,2 million Drug and substance abuse 50,0 million Extended Public Works Programme 164,8 million (grant funding = 31,1 million) Urban management 97,0 million Wi-Fi 100,0 million per annum Local economic development initiatives 39,9 million e aga Tshwane 263,6 million (capex included) epairs and maintenance 1,5 billion udimentary services 50,0 million Small, medium and micro enterprises initiatives 32,2 million Sustainability/green neighbourhood 20,0 million

5 The City of Tshwane Metropolitan Municipality TAIFFS 2015/16 A tariff is a service charge that a municipality charges for the use of services. Tariffs are affected by: The impact of inflation and other cost increases on a municipality Bulk purchase costs (and Water and Eskom) Direct or indirect methods of subsidisation (inclining block tariffs) to assist poor households Full cost recovery with regard to main services, to ensure sustainability in rendering these services Every financial year, as part of the preparation cycle, tariffs are reviewed for: Basic services, such as water, electricity, sanitation and refuse removal Other services, such as transport fees, housing rentals, resort entrance fees and building plan approvals Property rates The tariff increases for main services and property rates with effect from 1 July 2015 are as follows: evenue category 2015/16 (%) Sanitation 9,0 efuse removal 15,0 Water 13,5 Electricity (average) 12,0 Property rates 8,0 The City of Tshwane embarked on a refuse removal strategy to ensure that this service can be rendered in a sustainable manner over the medium to long term. Although the tariff increase on refuse removal services is 15,0%, the impact on the total account is low, since a relatively small portion of an account goes towards refuse removal. The and Water bulk water tariff increase is 13,5% for the 1 July 2015 to 30 June The Eskom bulk electricity tariff increase is 14,24% for the 1 July 2015 to 30 June Water Water tariff increases for residential and non-residential consumers with effect from 1 July 2015 are summarised below. Category 2014/ /16 (9% increase) Per kl Per kl esidential 0 6 kl per 30-day 6,81 7, kl per 30-day 9,72 11, kl per 30-day 12,77 14, kl per 30-day 14,77 16, kl per 30-day 16,89 19, kl per 30-day 18,25 20, kl per 30-day 19,53 22,17 More than 72 kl per 30-day 20,91 23,73 Non-residential kl per 30-day 14,39 16, kl per 30-day 13,66 15,50 More than kl per 30-day 12,73 14, /16 Integrated Development Plan and 2015/16 Medium-term Budget Example of calculation of water charges for 20 kl consumption: 0 6 7,73 = 46, ,03 = 66, ,49 = 86, ,76 = 33,52 20 kl 233,02 Sanitation Sanitation charges are calculated in relation to the percentage of water discharged into the sewer system. The sanitation tariff increases for residential consumers with effect from 1 July 2015 are summarised below. Category % discharged 2014/ /16 (9% increase) Per kl Per kl esidential 0 6 kl per 30-day 98 5,06 5, kl per 30-day 90 6,83 7, kl per 30-day 75 8,81 9, kl per 30-day 60 8,81 9, kl per 30-day 52 8,81 9, kl per 30-day 10 8,81 9,60 More than 42 kl per 30-day 1 8,81 9,60 Example of calculation of sanitation charges for 20 kl consumption: 6 kl x 98% (5,88 5,52 = 32,46 6 kl x 90% (5,40 7,44 = 40,18 6 kl x 75% (4,50 9,60 = 43,20 2 kl x 60% (1,20 9,60 = 11,52 20 kl (16,98 kl) 127,36 Note: Although the water consumption is 20 kl, only 16,98 kl is charged for sanitation. Electricity Electricity charges are based on the kwh consumed per month. The table below indicates the electricity tariffs applicable to households (domestic scale) with effect from 1 July 2015: Tariff blocks c/kwh 2014/15 c/kwh 2015/16 % increase Block 1 (0 100 kwh) 113,14 121,96 7,8 Block 2 ( kwh) 129,08 141,70 9,8 Block 3 ( kwh) 137,78 154,60 12,2 Block 4 (>650 kwh) 147,23 165,20 12,2 The domestic tariff increase ranges from 8% to 12%. The commercial tariff increase is 12% and 13-16% on bulk commercial and industrial TOU scales subject to load profiles and load factor %.

6 Example of calculation of monthly electricity charges for 500 kwh consumption: 100 1,2196 = 121, ,4170 = 425, ,5460 = 154, kwh 701,66 The electricity tariffs are subject to approval from the National Energy egulator of South Africa (Nersa) before implementation. efuse removal efuse removal charges are based on the volume (container size) of waste removed per week. Below are the refuse removal tariffs for households as from 1 July 2015: Service Category 2014/ /16 efuse removal City Cleansing efuse removal City Cleansing Per month Per month Per month Per month Weekly service charge 85l x 1 day per week (black bin) 33,09 33,09 38,05 38,05 85l x 2 days per week (black bin) 66,18 66,18 76,10 76,10 120l x 1 day per week 53,72 53,72 240l x 1 day per week 93,43 93,43 107,44 107, l x 1 day per week 428,23 428,23 492,46 492,46 Daily service 240l x 5 days per week (green bin) 467,15 467,15 537,22 537,22 240l x 6 days per week (green bin) 560,58 560,58 644,67 644,67 240l x 7 days per week (green bin) 654,01 654,01 752,11 752, l x 5 days a week 2 141, , , , l x 6 days a week 2 569, , , , l x 7 days a week 2 997, , , ,22 Tariffs for city cleansing are levied on all premises, irrespective of who removes the refuse generated at the premises. The City of Tshwane reserves the right to determine the type of service, the minimum number of containers and the frequency of services per area. Property rates Why do we have to pay property rates? All owners of immovable property are liable for the payment of property rates. The revenue from the property rates covers the cost of providing general services such as metro policing and community halls. The payment of property rates by the owners of immovable property is regulated by the Municipal Property ates Act, 2004 (Act 6 of 2004) (MPA). How much will you pay? For the 2015/16 MTEF, an increase of 8,0% has been approved for all tariffs with effect from 1 July The first of residential properties is exempted, and pensioners and people with physical and mental disabilities are granted rebates under policy conditions.

7 The categories of rateable properties for purposes of levying rates and the rates from 1 July 2015 are set out in the table below. Category 2014/ /16 (8% increase) Agricultural properties 0, ,00253 Business and commercial properties 0, ,03056 Educational institutions 0, ,03056 Independent schools PBO 0, ,00253 Industrial properties 0, ,03056 Mining 0, ,03056 Municipal property - - Municipal property (rateable) According to use category According to use category No category - - Non-permitted use 0, ,07641 Protected areas - - Public service infrastructure - - Public worship - - esidential properties 0, ,01013 State-owned properties/government 0, ,03056 Vacant land 0, ,06573 Example of calculation of monthly property tax for a property with a value of 1,0 million: (1,0 million less ) x 0,01013 divided by 12 = 780,85 MUNICIPAL ACCOUNTS Examples of municipal accounts Property Value (and) Electricity (kwh) Water (kl) Sanitation (kl) *(16,98) *(22,50) *(23,78) efuse removal (containers) 1 x 240l, once a week 1 x 240 l once a week 1 x 240 l once a week Monthly Account Payable 2015/ Services 2014/ /16 % 2014/ /16 % 2014/ /16 % incr incr incr Property rates 175,88 189,95 8,0 488,54 527,63 8,0 723,04 780, Electricity 435,84 476,21 9, , ,96 10, , , Water 205,34 233,02 13,5 365,76 415,14 13,5 741,00 841,04 13,5 Sanitation 116,85 127,36 9,0 165,48 180,38 9,0 176,76 192,67 9,0 efuse removal 186,86 214,88 15,0 186,86 214,88 15,0 186,86 214,88 15,0 Total 1 120, ,42 10, , ,98 10, , ,3 Increase in and 120,65 256,05 443,25 % increase 10,8 10,9 11,3 *(Sanitation billed according to the kl water discharged) BASIC SOCIAL PACKAGE The City of Tshwane cannot avoid increasing its tariffs, but the basic social package will partly eliminate the potential financial burden of the tariffs on poor households. In terms of the Indigent Policy, the basic social package available to registered indigent households includes a 100% rebate on property rates, 12 kl of water, 100 kwh of electricity, 6 kl of sanitation and 85 l of waste removed once a week. The 2015/16 revenue foregone on the social package amounts to 737,1 million, ie 511,90 per month per registered indigent household.

8 CAPITAL BUDGET 2015/16 The total capital budget equates to 3,9 billion, 4,0 billion and 4,2 billion in the 2015/16, 2016/17 and 2017/18 financial years respectively. The following graph illustrates the capital budget per funding source: How is the capital budget funded? Borrowings, ,12% Internally Generated Funds, ,27% Grants and Donations, ,61% Capital budget per main strategic focus area: Promote Good Governance and an Active Citizenry ,12% Ensure Sustainable, Safer Communities and Integrated Social Development ,41% Improved Financial Sustainability ,08% Continued Institutional Development, Transformation and Innovation ,81% Promote Shared Economic Growth and Job Creation ,09% Provide Sustainable Services Infrastructure and Human Settlement ,50% Major capital projects The following are some of the major capital projects to be undertaken in the 2015/16 financial year: Clinics 43,0 million Social development centres 33,0 million Local economic development projects (ie brick making facility, packaging facility) 15,9 million Business Process Outsourcing Park 54,1 million Cemeteries 21,0 million Agricultural villages 10,0 million Development of parks 35,0 million Interactive digital centre 74,0 million Tshwane rapid transport infrastructure 745,6 million (grant funding) Doubling of Simon Vermooten 25,0 million e aga Tshwane 150,0 million Tsosoloso programme 100,0 million New bulk infrastructure 100,0 million efurbishment of water networks and backlogs 90,0 million Tshwane public lighting 70,0 million Electricity-for-all 157,0 million Project-linked housing 670,3 million Upgrading of oad from gravel to tar in Zithobeni 6,0 million Upgrading of oad from gravel to tar in Ekangala 18,0 million Internal oads: Northern areas 25,0 million Internal oads: Mamelodi 50,0 million