Special feature: July 2010 Back to previous page

Mangaung Local Municipality IDP / Budget 2010/11 - 2012/13

Clr Playfair Morule delivering his Budget Speech for 2010-13.

On 29 June 2010 the IDP related Budget for Mangaung Local Municipality for the period 2010 -13 was tabled by Executive Mayor Clr Playfair Morule at a Special Session of the Mangaung City Council held at the Paradise Hall, Phahameng, Bloemfontein.

Below is an Executive Summary of the speech under which Clr Morule tabled the budget for adoption by Council.

This is followed by a graphic exposition of the Expenditure and Income components of the budget, while in conclusion detail of the new Tariff Structure for the Mangaung Municipal Area is given in Afrikaans.

The event of the Special Council Session on 29 May 2010 at the Paradise Hall, Phahameng was accompanied by an illustrious display of some moving assets and equipment acquired by the Mangaung Municipality as of late, especially for purposes of hosting the FIFA 2010 World Cup, as well as of some of the trained staff handling it. A glimpse of this is reflected in the pictorial display of this feature.

Executive Summary of Budget Speech by Executive Mayor Clr Playfair Morule on 29 June 2010

While we are excelling as the host of the mega showpiece FIFA 2010, the current Bafana Bafana team has also proved themselves to be the best since the class of 1996. I therefore walk with my head held high because of these performances and also because of the achievements of our country and mother continent… Feel It! Because It Is Here!

To me the past 17 days' soccer extravaganza confirmed the point made by former Pres. Thabo Mbeki when he said: “As an African, this is an achievement of which I am proud …Today it feels good to be an African... Africa, indeed is the theatre of the 2010 FIFA World Cup and South Africa is the stage.”

While hosting the World Cup has raised expectations, we have already begun reaping some of the benefits in the form of economic spin-offs evident especially in our local hospitality industry as well as supporting infrastructure development.

Maybe to brag a bit, I need to observe that Bafana Bafana have never lost even a single significant game in Bloemfontein – hence it was imperative for us as a host city to excel.

We have seen even the least known and supported match between Switzerland and Honduras enjoying high attendance. The ululating, the vuvuzelas and the chanting were no less than those from the popular matches. We have been vindicated in our decisions and for this a round of applause to Mangaung as the host city and our supporters who mingled, danced and sang incessantly with our visiting friends from the world over.

I also wish to take this opportunity to congratulate the MLM for successfully hosting six of the eight matches with utmost distinction.

As we have already mentioned earlier, hosting this tournament has further contributed immensely in fast tracking the development of infrastructure in our municipality – especially roads and recreational facilities.

I am therefore honoured and delighted to have been given this opportunity to address this august Council with regard to the presentation of the 2010/11 Budget and Integrated Development Plan (IDP).

Back to the business of the day, as you may be aware, budgets are about choices and some of these choices can lead to irreparable losses. Willingly or not, choices must be made. This year we are passing the Budget amid great uncertainties, noting that we are just starting to recover from a global economic recession which is often followed by economic depression.

At the moment even the eurozone is faced with enormous challenges. To cite a few examples, whilst Turkey had to be rescued by the International Monetary Fund (IMF), the economies of both Spain and Italy are faced with possible bankruptcy. Also, the recent Greek economic collapse further plunged Europe into a crisis of magnitude proportions that has not been experienced before. Inevitably, these global challenges, depending on which direction they take, will have marked impact on our economy.

Reportedly, our economy has shed approximately one million jobs in the formal sector and recovery will not necessarily expand or create the same number of job opportunities. However, we are grateful that our economy is no longer shedding jobs.

Today, the Council is considering a budget whose capital budget is reduced. This reduction stems from the wisdom of the legislative framework which compels us to table credible and realistic budgets.

Even though it may sound like admitting that we have not been budgeting correctly, there is no secrecy and criminal offence in putting it plainly that in recent years our municipality was on the verge of collapse. We were subjected to both political and administrative instability, which ultimately led to low staff morale and inescapable decline in service delivery.

I am however fairly satisfied that we are now on course in the restoration of our status as a benchmark municipality in the Free State Province. You may all bear witness to the fact that we have attained political stability even though we are still grappling with some administrative challenges such as creating a sound financial administration and peaceful settlement of labour disputes.

In March 2010 we tabled the MLM Municipal Turnaround Strategy and we are therefore committed to the following five strategic objectives, which are to:

• Ensure that municipalities meet the basic service needs of communities;
• Build clean, effective, efficient, responsive and accountable local government;
• Improve the performance and professionalism in municipalities;
• Improve national and provincial policy, oversight and support; and
• Strengthen partnerships between local government, communities and civil society.

In September 2009 we sealed an economic development partnership to establish a second economy BPO&O initiative called “Re Hodisa Moruo.”

We are also holding consultative meetings with relevant stakeholders in particular the councillors and ward committees.

Regarding the IDP Outreach and Community Consultation Process, the following should be noted:

Executive Mayor Morule taken on guided tour of municipal vehicles and equipment on display at the Budget event.

• Thaba Nchu – the prioritization of the water and waterborne sanitation and feasibility of a new compliant landfill site to be considered as a matter of urgency.
• Botshabelo –the immediate eradication of bucket sanitation and VIP toilets, construction of fully completed roads (instead of the current incomplete roads prevalent in Botshabelo) and formalization of informal settlements.
• Bloemfontein – the speedy formalization of informal settlements, upgrading of roads and consistent refuse removal.

It is against these inputs and views, that we are content that the ward-based budgeting and planning approach is ideal since it gives precedence to allocation of (financial) resources to each ward to identify potential projects that are economic-developmentally orientated.

An allocation of R200 000 will be availed for each ward in the 2010/11 financial year. In this regard, no funds will be devolved without a project plan designed in accordance with the normative guidelines.

Last year's audit report was disclaimed on the basis of non-compliance and it is for this reason that we are tabling this Budget and IDP with the following policies:

• Unauthorized, Irregular, Fruitless and Wasteful Expenditure Policy;
• Property Rates Policy
• Budget Policy and
• Credit Control and Dept Collection Policy.

In pursuit of financial stability and sound financial management and governance, we have also developed the framework for financial recovery plans that are in place for a long-term financial recovery plan.

In strengthening our administrative capacity, we have taken a conscious decision to devolve certain administrative powers to the regional offices at Botshabelo and Thaba Nchu.

In line with this process, we have adopted a ward-based planning system in rolling out a cleaning campaign project aimed at improving the cleanliness of our municipal area. Thus putting our people at the centre of their development.

As you may be aware, we are in the process of improving our waste management systems and it is for this reason that on 5 July 2010 we will be launching the cleaning campaign in Thaba Nchu. We urge the residents of Mangaung to organize and form structures that exercise passion for a clean environment.

We have also developed a management plan for the Seven Dams area with a view to promoting conservation and bio-diversity as part of the Environmental Awareness and Green Goal.

In our endeavour to ensure the three CBDs of Bloemfontein, Botshabelo and Thaba Nchu as vibrant and integrated centres for community development, providing key services and be safe to be visited during day and night, we will fast track the finalization of development projects of these CBDs during this financial year.

In Bloemfontein, the Intermodal transport facility project is at an advanced stage and we hope that it is still on course for completion as scheduled. This will also fit in with the scheduled revitalization of commuter rail transportation between Bloemfontein and Thaba `Nchu led by the provincial government

Regarding sustainable settlement, we intend to eradicate the housing backlog by 2015 so that Mangaung citizens can live in sustainable human settlements with well designed and quality homes, a range of tenure options and access to goods and services. Our target for the 2010/11 financial year is 2 400 households. Also, in our endeavour to address the housing backlog we have:

• Allocated finished units at Mangaung hostel to rightful beneficiaries (White City) and have instructed speedy finalization of remaining ones;
• Approved as a Council, the implementation of Brandwag Social Housing Project; and
• In collaboration with the provincial government, we will redevelop old and dilapidated houses in the old townships in line with the Operation Hlasela programme as part of our contribution.

As you may be aware, about 23% of the area of the Municipality is farmland and 6% of our population lives in the rural parts of Mangaung. Our mandate is to improve the quality of life of people living in rural areas.

We will provide support to 60 peri-urban and rural agricultural farmers within and train at least 100 emerging farmers. We will further facilitate the establishment of the SMMEs and operation in our rural areas.

Our Municipality has now been re-determined by the Demarcation Board as a category A municipality. This elevation implies that our municipality will have the powers to strategically plan in a more holistic and integrated manner as it assumes the status of a metropolitan municipality. We are finalizing the report on the readiness of Mangaung for transition to a metropole.

Our Municipality is currently experiencing a constant migration of individuals from surrounding farms, towns and neighbouring countries who are seeking greener pastures especially in the Bloemfontein area. The consequence of this migration is uncontrolled urban sprawl which in turn impacts negatively on our capacity to render quality services. Nevertheless, the Municipal Infrastructure Grant which has a particular emphasis on the eradication of service delivery backlogs, has enabled us to meet some challenges especially with regard to water, sanitation and eradication of informal settlements through the provision of housing and household services.

This budget has been compiled in accordance with the National Treasury's requirements of multi-year (three years) budgeting and the Municipal Finance Management Act (MFMA). Our total budget for this financial year (2010/11) is R3, 36 157 billion which comprises of an operating budget of R 2, 98 832 and a capital budget of R 373, 25 million.

The projected capital budget has been set at R716,3 million and R524,9 million respectively for the 2011/12 and 2012/13 financial years.

For the new financial year it is worth noting that our capital budget has been reduced by R476,30 million from the 2009/10 budgeted amount of R841,7 million.

The rapid inward migration, declining household sizes and greater economic and educational activity puts pressure on the existing municipal infrastructure and in the light of these challenges amongst other priorities we have made the following provisions in the 2010/11 Capital Budget:

• New Township Establishment R8,0 million
• Inter-modal Public Transport Facility R15,0 million
• North Eastern Waste Water Treatment Works R50,2 million
• Extension to Sterkwater Waste Water Treatment Works R24,9 million
• Extension to Eastern Waste Water Treatment Works R6,5 million
• Upgrading of Sewer System in Freedom Square R37,6 million
• Bulk Water Supply to Mangaung R53,6 million
• Electrification Connection – DME Grant R13,0 million
• Installation of Pre-paid Meters (Indigents) R5,0 million
• Public Electricity Connections R19,9 million

With regard to the operating budget I am pleased to announce that our budget increases from R2,9 649 billion in 2009/10 to R2, 9 883 billion in 2010/11, R3,3 944 billion and R3, 8 406 billion respectively, for the outer two years of the MTREF period. The growth is mainly attributed to:

• Cost of bulk purchases of water and electricity;
• Employee related costs as a result of the provision for salary increase and the full impact of staggered filling of vacancies in the 2009/10 fiscal year.
• Impact of the increase in contracted services by 56.0%.

At this juncture I would like to draw your attention to the fact that this budget is also providing for the general tariffs and charges to increase at the average of 23%, water tariffs to increase by 15, 0%, electricity tariffs to increase by 28.9% and housing tariffs to increase with 10%. All these increased tariffs will be applicable from the beginning of the new financial year - 1 July 2010. From this time henceforth, free basic services will only be applicable to indigents.

Coming to the youth component, during September 2009 we reaffirmed our twinning agreement with the Belgian City of Ghent and pursuant to the precepts of the twinning agreement, as you may be aware, our youth coordination centers are still operational in all three areas constituting our municipality – Bloemfontein, Botshabelo and Thaba Nchu. As part of this youth development project, the City of Ghent allocated 99 900 Euros to the youth of Mangaung for the implementation of a Multi Annual Programme 2008 – 2012.

We are also working in close cooperation with the business and academic institutions to identify economic development projects. These institutions include: Motheo Further Education and Training College; University of the Free State; Small Enterprise Development Agency (Seda); State Information Technology Agency (SITA); and Vodacom. A task team comprising of representatives from these institutions has just completed a draft business plan on a furniture refurbishment initiative.

Besides our own challenges, we also have to deal with both global and local economic melt-down, but we are confident that this Budget will steer Mangaung Local Municipality in the right direction.

It is in this light that I present before this House and the Council the Budget and IDP for adoption.

Remember: Together, we can still do more!

Mangaung Local Municipality IDP related Budget 2010-13 Graphic exposition of Expenditure and Income