The 2024/25 draft budget was tabled at the March meeting of Council. Overstrand Municipality calls on its communities and stakeholders to participate in the 2024/25 Integrated Development Plan (IDP) review and proposed amendment and Budget process.
The draft budget is tabled for inputs from residents and relevant stakeholders and, when concluded, these inputs will shape the final IDP review and amendment and budget to be approved by Council in May 2024. The closing date for comments is 3 May 2024.
Overstrand Executive Mayor, Dr Annelie Rabie, emphasised that ward councillors must make sure the IDP ward priorities are a true reflection what is needed and wanted by their specific wards.
“I cannot in the year, change budgets – if in the year you want to have capital budgets done, I will not have the money because it wasn’t in the IDP in the first place.
She encourages everyone to take time to read and work through the draft IDP review and Budget documents.
The first opportunity for public inputs will be between 2 – 25 April when the draft budget and IDP review and proposed amendment will be taken to the public ward committee meetings. Click here for the schedule: www.overstrand.gov.za/about-us/mayoral-office/ward-committees/
The second opportunity for public inputs will be at the Overstrand Municipal Advisory Forum (OMAF) meeting, which is scheduled to take place on Wednesday, 24 April 2024 at 18:00 in the Municipal Auditorium.
In short, the proposed budgeted revenue (excluding capital grants received), amounts to R1,829 billion; the budgeted operational expenditure amounts to R1,944 billion (this includes non-cash items like depreciation – hence an accounting deficit of R114,92m is reflected). The capital budget amounts to R152,033m and are going to be used for very specific capital projects.
The following are the proposed percentage increases in tariffs for main services:
- Property rates: 8%
- Water: 6%
- Sewerage: 8.9
- Refuse removal: 11%
- See budget speech for electricity explanation.
Documents that are also open for public comment by 3 May 2024 are the draft Water Services Development Plan (WSDP) for 2024/ 25 and the Draft Disaster Management Plan (DMP) for 2024/25. These documents are sector plans to the Integrated Development Plan (IDP).
Mayor Rabie’s budget speech, is published below:
Speaker,
The purpose of this report is to table the Draft Budget for 2024/2025, indicative budget forecasts for 2025/2026 to 2026/2027 and draft budget related policies.
Section 16. (1) of the MFMA requires that the council of a municipality must for each financial year, approve an annual budget for the municipality before the start of that financial year.
In order to comply with subsection (1), the Mayor of the municipality must table the annual budget at a council meeting at least 90 days before the start of the budget year.
Sections 21 to 23 of the MFMA furthermore provides for the budget preparation process, the publication of annual budgets for comment and consultations to take place on tabled budgets.
The Draft Budget for 2024/2025 will be advertised for public comment in order for Council to consider the final budget during the May 2024 Council meeting.
The proposed budget for the 2024/2025 financial year:
- The budgeted revenue excluding capital grants received, amounts to R1,829 billion.
- The budgeted operational expenditure amounts to R1,944 billion – this includes non-cash items like depreciation. Hence an accounting deficit of R114,92m is reflected.
- The Capital budget amounts to R152,033m. It is to be used for very specific Capital projects – more about this later on.
Projected Revenue per functional classification, including capital grants are:
Governance and administration: R527,064m
Community and Public Safety: R193,553m
Economic and Environmental services: R13,907m
Trading services: R1,160,336 billion (Trading services include electricity/energy; water management, waste water management, and waste management.)
TOTAL REVENUE (Including capital grants) R1,894,8 billion
Projected Operational Expenditure per functional classification, are:
Governance and administration: R358,132m
Community and Public Safety: R356,028m
Economic & Environmental Services: R223,538m
Trading services: R1,002,626m
Other: R3,923m
TOTAL OPEX EXPENDITURE: R1,944billion (with a nett deficit of R49,388m )
2024/2025 Draft MTREF Budget
The draft MTREF draft budget for 2024/25, provides for tariffs increases for the respective municipal services ranging between 6% and 11%, the details as follows –
Property Rates 8%
Water 6%
Sewerage 8,9%
Refuse Removal 11%
Electricity tariffs as follows:
The draft electricity tariff increase recommended for municipal consumers of the municipality, is in accordance with electricity consumer categories, now also offering a capacity charge, for the consumer to determine the level of services required, directly in relation to the price structure.
Implementation will follow a phased approach with four phases over the next four years, starting with phase one of the revised Cost of Supply (CoS) electricity tariff structure for 2024/25.
The national annual increase for municipalities to implement, as issued by the National Energy Regulator of South Africa (NERSA), represents a 10.04% increase, but the final increase per category consumer is to be considered in view of phase one of the CoS tariffs.
This increase should be determined in combination with the capacity charge tariff applicable to the consumer, together with the unit costs (kWh) consumed.
Before-mentioned implementations also involves the phasing out over four years of the familiar sliding scale for electricity unit costs, previously prescribed for a number of years by NERSA.
An important principle of the CoS tariffs will be the option for individual consumers to migrate to, or to choose the most cost-effective capacity charge tariff, allowing consumers to manage this portion of electricity costs, as well as consumption levels, which are already managed by the consumer.
Documents that are also open for public comment by 3 May 2024 are the draft Water Services Development Plan (WSDP) for 2024/ 25 and the Draft Disaster Management Plan (DMP) for 2024/25. These documents are sector plans to the Integrated Development Plan (IDP).
Additional relief to vulnerable groups
The municipality is furthermore now also with this budget, improving on the provision of additional relief in line with the municipality’s focus to render support to vulnerable groups –
Owners of residential properties with a municipal valuation below R300 000 (Three hundred thousand Rand). This will in effect mean that no property rates will be payable on properties with a valuation of R300 000 (Three hundred thousand Rand).
Registered indigents are granted the following subsidies:
(i) 100% of the basic levy for electricity for one service point per month;
(ii) 100% of the basic levy for water for one service point per month;
(iii) 100% of the basic levy for sewage for one service point per month;
(iv) 100% of 1 X vacuum tanker service after hours, per annum;
(v) 100% of the basic levy for refuse removal for one service point per month;
(vi) The first 70 kWh in the tariff block 0-350 of electricity per month shall be free of charge;
(vii) 10 kℓ of water;
(viii) 7 kℓ of water consumption for sewerage; and
(ix) R11.84 in regard of Infrastructure Levy.
To be noted that the increased electricity units allocation from 1 July 2024, from 50 kWh, to 70 kWh per 30-day period free of charge, in the instance that they qualify for this indigent benefit.
Service Rendering funded from Property Rates
Revenue from Property Rates amounts to R359,44m, however taking into account the cost of rates related services rendered to communities across the Overstrand, is exceeding the revenue received. For example, services related to Baboon Management is funded by the municipality, without any contribution from other spheres.
In conclusion
Council will furthermore continue to explore avenues to provide relief to lower income households to the extent that it can be afforded by the municipality.
For more detail regarding the Operational and Capital Budgets respectively, please consult the 2024/25 Draft Budget book available on the municipal website.
