Residents to cough up more for services from July

Cllr Sibusiso Mathonsi.

MBOMBELA – The average increase in municipal rates for residents of Mbombela Local Municipality (MLM) is set to be higher than the core inflation forecast of around six per cent.

During MLM’s executive mayor Cllr Sibusiso Mathonsi’s budget speech for the financial year, starting on July 1, during a special council meeting on Tuesday May 31, he said the average increase for electricity, water, sewerage, and refuse removal would be 8,2 per cent.

The municipality’s total budget for 2016/17 is R3 billion.

The budget is meant to provide a “solid foundation” for the new unit as the municipality will be merging with that of Umjindi after the August 3 local government elections to become the City of Mbombela Local Municipality.

The mayor noted that residents were concerned about the increase, but explained it was necessary due to increases in bulk electricity and water charges, fuel, employee-related costs and the cost of borrowing.

Water and sanitation tariffs in the concession area will increase by 11,82 per cent and the increase in tariffs for property rates and services charges was expected to generate additional revenue of R129 million.

In 2014/15, MLM achieved a 77 per cent rate of capital expenditure performance, for the first time in six years. “Our financial position is improving,” Mathonsi said.

He pointed to a narrowing operating budget deficit, projected to be R7 million in 2016/17 compared to R138 million in 2015/16, as well as a projected operating budget surplus of R59 million and 199 per cent cash flow improvement as proof.

Cost containment measures including a new overtime management strategy and implementation of a new solid waste operational model is also expected to save MLM R38,7 million in the coming financial year.

Mbombela received an unqualified audit opinion with findings from the Auditor-General in 2014/15. His consolidated general report on audit outcomes of local government showed municipalities in Mpumalanga incurred combined losses of R333 million for water and R705 million for electricity in the same financial year.

Mathonsi said Mbombela was implementing interventions to curb these losses, including water demand and revenue-enhancement strategies.

“The municipality is encountering substantial losses of revenue on property rates, service charges such as electricity, water and refuse removal and this is as a result of operational and administrative inefficiencies,” he said.

Access to basic services for indigent households is forecast to cost MLM R159 million in 2016/17 with an estimated 12 000 households to be be provided with free basic electricity and 121 000 households with water.

The water and sanitation department has been allocated R197 million for capital expenditure for the year. Several sub-stations in the municipal electricity-supply areas will also be upgraded at a cost of R18 million.

“The provision of basic municipal services to all households still remains a challenge due to lack of social infrastructure,” the mayor noted.

“The eradication of backlogs in relation to the provision of basic services, maintenance of the existing infrastructure and assets, cleanliness of the municipality, good governance and accountability, and upscaling and building of capacity in our human capital and of course, enabling of economic growth in the municipal areas remains the key priorities of the municipality,” he said.

Mireille de Villiers

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