– Danie Keet.
Stellenbosch Municipality’s revenue strategy was based on tariff policies of the municipality, economic outlook and development for Stellenbosch and surrounding areas, National Treasury’s guidelines and macroeconomic policy, national, provincial and regional fiscal growth rates, and electricity tariffs as approved by the National Electricity Regulator of South Africa (NERSA).
These strategies were used to approve the medium-term budgets al the council meeting last week.
The financial resources to fund the Operational Budget will and must consist of realistically anticipated revenue generated from property taxes, service charges and other income.
The municipality was mindful of the estimated headline inflation for 2020/2021 of around 4.5 %, forming the basis of the extensive income modelling exercise, but also taking into account the principles of economical services that are cost reflective, trading services generating surpluses, the effect of escalating salary costs and bulk purchases.
The total budget quantum for the 2020/2021 year is R2 272 713 713 of which R1 899 463 402 (83.58%) is allocated to the operating budget and R373 250 311 (16.42%) to capital investment.
The capital budget approved by the council is infrastructure orientated and addresses the huge backlog and urgent need to upgrade or refurbish Stellenbosch’s infrastructure as addressed by the different master plans. It is directed by the IDP (Integrated Development Plan) and the needs of the community. It’s also aligned to the strategic priority in the State of the Nation Address of Infrastructure investment and the “back to basics” approach.
The main capital projects that the municipality will be investing in, which constitute more than 64% of the capital budget, include:
- Water Pipe Replacement
- Bulk water supply pipeline and reservoir in Jamestown
- Water conservation and demand management
- Water treatment works in Ida’s Valley
- Bulk water supply pipeline and pump stations in Franschhoek
- Bulk water supply in Klapmuts
- Bulk water supply pipe and reservoir for Kayamandi
- A new reservoir and pipeline at Vlottenburg
- Franschhoek sewer network upgrade
- Dwarsriver bulk supply augmentation and network upgrades
- New Bienne donné 66/11kV substation
- The expansion of the landfill site with new cells
- Extension of cemetery infrastructure
- Upgrade of WWTW: Klapmuts
- Sewerpipe replacement in Dorp Street
- Bulk Sewer Upgrade: Dwarsriver Area (Kylemore, Boschendal, Pniel)
- Upgrade of WWTW in Wemmershoek
- Bulk sewer outfall in Jamestown
- Upgrade of WWTW in Pniel and decommissioning of Franschhoek
- Laterra Substation
- Jan Marais upgrade
- Integrated national electrification programme
- Watergang farm upgrading
- Upgrading of The Steps/Orlean Lounge
- Kayamandi Zone O supply of ±711 services
- Klapmuts: Erf 2181 supply of 298 serviced sites
- Upgrading of traffic department offices in Stellenbosch
- The Kleine Libertas precinct
- Integrated and spray parks
The operating budget for the 2020/2021 – 2022/2023 financial year is aligned to the principle of total potential income (less income forgone as an expense where applicable) from all the municipal services as well as a projection of total direct income. The extent, to which tariffs and levies are proposed to increase, is in the main influenced by:
- The increase in bulk purchases (water and electricity)
- Employee related costs, as per SALGBC wage agreement
- Councillor remuneration, as per SALGA upper limits
- Service delivery challenges
- Repairs and maintenance
- Operational projects impacting job creation and economic development
- Contractual commitments
- Day to day operational costs (fuel & oil, telephones, bank costs, etc.)
- Finance costs, influenced by level of borrowing
Taking all of these issues into consideration and to ensure the sustainability of municipal operations from realistically anticipated income flows, the following tariff and property tax increases were proposed for 2020/2021:
- Electricity: 6.22%
- Sanitation: 6.50%
- Refuse removal: 16.50%
- Water: 6.00%
- Rates: 6.50%
Taking cognisance of the plight of the poor and the affordability of basic services, the scale up to 20 kl of water was increased by only 6% and usage over 20 kl (20 000 litres) for domestic consumers increases in proportion to consumption.