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Theewaterskloof Municipality 



Budget 

2015/2016 to 2017/2018 
28 May 2015 


English is original version 


Copies of this document can be viewed: 

• In the foyer of all municipal offices 

• All public libraries within the municipality 

• At www.twk.orq.za 


Table of Contents 


List of Tables 


ii 


PART 1 - ANNUAL BUDGET 


1 . 

2 . 

3 . 

4 . 

5 . 

6 . 

7 . 

8 . 

9 . 

10 . 
11 . 
12 . 

13 . 

14 . 

15 . 

16 . 
17 . 


Council Resolutions 

Executive summary 

Operating Revenue and Expenditure Framework 

Capital Expenditure 

Annual budget tables 

Overview of Annual Budget Process 

Overview of Alignment of Annual Budget with IDP 

Measurable performance objectives and Indicators 

Overview of Budget Related Policies 

Overview of Budget Assumptions 

Overview of Budget and Funding 

Expenditure on allocations and grant programmes 

Annual Budgets and Service delivery and Budget Implementation plans- Internal 
Departments 

Capital expenditure details 

Legislation Compliance Status 

Other supporting documents 

Municipal manager’s quality certificate 


..1 

..2 

..6 

..7 

..8 

25 

28 

38 

45 

48 

55 

63 

67 

71 

78 

79 
82 


l 



List of tables 


Description Page 

1. Budget Summary (Table A1) 8 

2. Budgeted Financial Performance (Revenue and Expenditure by standard classification) (Table A2) 
10 

3. Budgeted Financial Performance (Revenue and Expenditure by municipal vote)(Table A3) 12 

4. Budgeted Financial Performance (Revenue and Expenditure) (Table A4) 13 

5. Budgeted Capital Expenditure by vote, standard classification and funding (T able A5) 15 

6. Budgeted Financial Position (Table A6) 17 

7. Budgeted Cash Flows (Table A7) 19 

8. Cash Backed reserves/accumulated surplus reconciliation (Table A8) 20 

9. Asset Management (Table A9) 21 

10. Basic Service Delivery measurement^ able A10) 23 

11. Reconciliation between the IDP strategic objectives and budgeted revenue (Table SA4) 36 

12. Reconciliation between the IDP strategic objectives and budgeted operating expenditure 

(Table SA5) 37 

13. Key financial indicators and ratios (table SA8) 39 

14. Monetary investments by type (Table SA15) 56 

15. Detail of borrowings (Table SA17) 57 

16. Funding compliance measurement (Table SA10) 60 

17. Expenditure on allocations and grant programmes (Table SA19) 63 

18. Salaries, allowances & benefits (political office bearers, councillors/senior managers)(Table SA23) 
64 

1 9. Summary councillor and staff benefits (T able SA22) 65 

20. Summary of personnel numbers (Table SA24) 66 

21. Capital expenditure on new assets by asset class (Table SA34a) 73 

22. Capital expenditure on renewal of existing assets by asset class (Table SA34b) 74 

23. Repairs and maintenance expenditure by asset class (Table SA34c) 75 

24. Capital expenditure details (Table SA36) 76 

25. Supporting detail to budgeted financial performance (Table SA1) 79 

26. Supporting detail to Statement of Financial Position (Table SA3) 80 

ii 



Abbreviations and Acronyms 


IDP 

Integrated Development Plan 

MTREF 

Medium Term Revenue and Expenditure Framework 

NERSA 

National Electricity Regulator South Africa 

kl 

Kilolitre 

kWh 

Kilowatt 

VAT 

Value Added Tax 

SMME 

Small Micro and Medium Enterprises 

CPI 

Consumer Price index 

MFMA 

Municipal Finance Management Act 56 of 2003 

GFS 

Government Financial Statistics 

MBRR 

Municipal Budget and Reporting Regulations 

GRAP 

Generally Recognized Accounting Practice 

MSA 

Municipal Systems Act 

MIG 

Municipal Infrastructure Grant 

LED 

Local Economic Development 

SDBIP 

Service Delivery Budget Implementation Plan 

DoRA 

Division of Revenue Act 

PDO 

Predetermined Objectives 

KPI 

Key Performance Indicator 

KPA 

Key Performance Area 

RBIG 

Regional Bulk Infrastructure Grant 

MTBPS 

Medium Term Budget Policy Statement 



1. Council Resolutions 


1 . That Council resolves that the Annual Operating Budget of the municipality for the financial 
year 2015/2016 and indicative for the two projected Outer Years 2016/2017 and 2017/2018 
be approved as set out on Tables A1, A2, A3 and A4. (pages 8-13). 

2. That Council resolves that the Annual Capital Budget of the municipality for the financial 
year 2015/2016 and indicative for the two projected Outer Years 2016/2017 and 2017/2018 
be approved as set out on Tables A1 , A5 and SA36. (pages 8, 15, and 77). 

3. That Council resolves that the Monthly Cash Flow Forecasts with appropriate amendments 
be approved as the Cash Flow Budget of the Council for the 2015/2016 financial year as set 
out on Tables Aland A7. (Pages 8 and 19). 

4. That Council resolves to adopt the Integrated Development Plan . 

5. That Council resolves to adopt the “Spatial Development Framework” as part of the 
Integrated Development Plan, as regulated by the Municipal Systems Act (Act 32 of 2000), a 
directed in terms of Section 22 of the Bill on the Land Use Planning Act. 

6. That Council resolves to adopt the “Disaster Management Plan” as part of the Integrated 
Development Plan, as regulated by the Municipal Systems Act (Act 32 of 2000). 

7. That Council resolves that the Tariff Charges are approved for the Financial Year 
2015/2016. (Annexure A). 

8. That the Final Monthly Indigent Subsidy in respect of 6kl Water, 70KwH Electricity, Refuse, 
Sewer and Informal Settlement Plot Rental (where applicable) are approved and that the 
applicable free basic services subsidies be calculated on the approved tariffs for the 
applicable services and measurable units. 

9. The first R1 00,000 on all residential properties are exempt from property rates for persons 
older than 60 years of age and earning less than R6400 per month. The exemption is also 
applicable to all households earning less than R4801 . 

10. That it be noted that “Unfunded Functions” and “ Underfunded Functions ” are fully budgeted 
for at present service levels and in respect of Housing. 

1 1 . That note is taken that Internal Division of Costs (Departmental Charges) are calculated 
based on expected budgeted time spent, measurable units/guantities, cost, and that tariffs 
are determined accordingly. 

12. That Council resolves the following Amendments to the Policies as per Annexure B 
Annexure B 

1 . Credit Control and Debt Collection Policy 

2. Supply Chain Management Policy 

3. Rates Policy 

4. Tariff Policy 

5. Virement Policy 


1 



2. Executive summary 


LEGAL REQUIREMENTS 

The medium term revenue and expenditure framework for 2015/2016, 2016/2017 and 
2017/2018 was compiled in accordance with the requirements of the relevant legislation, of 
which the following are the most important: 

i) the Constitution, Act 108 of 199 

ii) the Municipal Structures Act, Act 1 17 of 1998 

iii) the Municipal Systems Act, Act 32 of 2000 

iv) the Municipal Finance Management Act, Act 56 of 2003 

The main objective of a municipal budget is to allocate realistically expected resources to the 
service delivery goals or performance objectives identified as priorities in the Integrated 
Development Plan. 

The guidance contained in National Treasury’s MFMA Circular No. 74 was used in the 
compilation of the 2015/16 MTREF. The following aspects in the circular are of importance and 
will therefore be highlighted: 

• Support will be provided to municipalities to improve revenue collection and the 
management of infrastructure financed from both own revenue and grants. Government 
will also work with private investors and development finance institutions to expand debt 
financing for municipal infrastructure. 

• The Development Bank of Southern Africa (DBSA) is currently examining ways to 
encourage greater private investment in the municipal infrastructure market through 
infrastructure bonds, municipal bond underwriting, project finance and various 
contracting models. 

• The economy is weakening and National Government will reduce expenditure. Grants to 
Local Government with the exception of the equitable share will therefore be reduced. 

• The MSCOA regulations are also critical and the financial implication for municipalities is 
yet to be determined. 

• Municipalities may increase electricity tariffs by 12.2% only. 

• As per the guidance in various previous Budget Circulars, municipalities were expected 
to apply cost reflective tariffs in the 2014/15 MTREF for both water and sanitation. 
Should this not be the case, municipalities will be required to clearly articulate the 
reasons and remedial actions to rectify this position in their budget document. 

• The salary and wage collective agreement will come to an end by 30 June 2015 and 
municipalities are advised to budget for a cost of living adjustment of 5.8% to be 
implemented with effect from 1 July 2015. 

• Municipalities must prioritise the provision of basic services such as electricity, water, 
sanitation and refuse removal in their MTREF budgets. The Municipality may only 
budget for non-core functions such as creches, sports fields, libraries, museums, health 
services, and etc. if: 

• The function is listed in Schedule 4B and 5B of the Constitution; 

• The function is assigned to municipality in terms of national and provincial 
legislation; 

• The municipality has prioritised the provision of basic services; and 

• It does not jeopardise the financial viability of the municipality. 

• Municipalities are urged to sign service level agreements and recover costs where 
unfunded/underfunded mandates are performed on behalf of other spheres of 


2 



government. However it will not constitute an unfunded / underfunded mandate if the 
municipality provides services beyond what is stipulated in the service level agreement. 

Growth to the Theewaterskloof Municipality’s Medium Term Revenue and Expenditure 
Framework (MTREF) is based on a combination of factors such as (relatively low) generic 
growth to core tariff-based services, operational efficiencies, and revenue-related policies aimed 
at optimising and sustaining all income sources. 

The MTREF-based Revenue and Expenditure Projections assumed inflation-linked annual 
adjustments. The main challenges experienced during the compilation of the 2015/16 MTREF 
can be summarised as follows: 

• National and local economic difficulties (low economic growth) 

• Reduction in equitable share allocation 

• Fuel increases 

• Above-inflation increases in Bulk Purchase Tariffs: Overberg Water board: 11.5% and 
ESKOM at 14.24% 

• Above inflation increases in essential maintenance costs 

• Old infrastructure which needs to be consistently maintained or replaced 

• The fee for utilising the Karwyderskraal disposal site 

• Lack of motor vehicles, tools and equipment and the average age of the vehicle fleet 

• The prioritisation of projects and expenditure within the existing resources 

• Staff remuneration: A preliminary of 8.5% has been included in the 2015/16MTREF. 


The following further key parameters which are informed by the need to recover costs and to 
balance the budget were considered for the 2015/16 financial year: 


Tariff increases: 

• Assessment Rates 

• Electricity 

• Water 

• Sanitation (Sewer) 

• Solid Waste (Refuse) 


9.5% 

12.2% (Subject to NERSA’s final approval) 
7% 

9% 

16% 


The following table provides a consolidated overview of the proposed 2015/2016 MTREF taking 
into consideration tariff adjustments and increases to input costs: 


R thousand 

Budget 

2014/2015 

R'000 

Budget Year 
2015/2016 
R'000 

Budget Year 
2016/2017 
R'000 

Budget Year 
2017/2018 
R'000 

Total Operating Revenue 

(454 351 ) 

(466 204) 

(478 899) 

(508 889) 

Total Operating Expenditure 

410 694 

449 331 

466 746 

491 826 

(Suplus)/Deficit for the year 

(43 656) 

(16 873) 

(12 153) 

(17 063) 

Total Capital Expenditure 

85 177 

60 973 

51 731 

53 714 


Total operating revenue is projected to grow by 2.6 per cent or R1 1 , 853 million for the 2015/16 
financial year when compared to the 2014/15 Budget. For the two outer years, operational 
revenue will increase by 2.7% and 6.3% respectively, equating to a total revenue growth of 
R 508, 889 million over the MTREF when compared to the 2014/15 financial year. 


3 


The major items of operating revenue are as follows: 


Description 

2014/15 

R'000 

2015/16 

R'000 

% of Total 

Revenue 

Growth 

2014/15 - 

2015/16 

Property Rates 

68 910 

75 213 

16% 

9% 

Service Charges 

156 254 

178 274 

38% 

14% 

Operational grants 

122 945 

136 386 

29% 

11% 

Capital grants 

61 638 

38 617 

8% 

-37% 

Other own Revenue 

44 604 

37 715 

8% 

-15% 


454 351 

466 204 

100% 

3% 


Revenue from service charges represents the biggest part (38%) of the municipality’s revenue 
followed by operational grants (29%), property rates (16%) and capital grants (8%). There has 
been a reduction in capital grants and other own revenue when compared to the 2014/15 
financial year. 

Total operating expenditure for the 2015/16 financial year amounts to R449, 331 million, which 
represents an increase of R38, 637 million (9.4%) over 2014/15, increases of 3.9% and 5.4% for 
each of the respective outer years of the MTREF. A portion of the R16, 873 million for 
2015/2016 will be used to fund inventory items on the capital budget. 

Repairs and maintenance is very low but a distinction has been made to separate repairs from 
maintenance as there is a fundamental difference between repairs and maintenance. 
Maintenance is aimed at preventing assets from becoming obsolete and to conserve an asset or 
resource for as long as possible in its original condition before the expiry of its economic life and 
should be carried out in accordance with a master plan for infrastructure maintenance. Repairs 
are work carried out to restore an asset or resource to a sound condition after it has been 
damaged. 


The major operating expenditure il 

ems are summarised below: 

Description 

2014/15 

R'000 

2015/16 

R'000 

% of Total 
Expenditure 

Growth 

2014/15 - 
2015/16 

Employee related costs 

140 981 

153 721 

34% 

9% 

Councillor Remuneration 

9 277 

10 479 

2% 

13% 

Depreciation 

17 571 

17 571 

4 % 

0% 

Finance Charges 

12 733 

13 496 

3% 

6% 

Bulk Purchases 

55 091 

62 253 

14% 

13% 

Repairs and Maintenance 

23 179 

28 433 

6% 

23% 

Other expenditure 

151 863 

163 379 

36% 

8% 


410 694 

449 331 

100% 

9% 


Employee related costs and other expenditure represent the major expenditure items at 34% 
and 36% respectively. 


4 


The capital expenditure amount to R60, 973 million and has declined by 15, 2% when compared 
to the 2014/15 adjustment budget. The outer years decrease to R51, 731 million in 2016/2017 
and R53, 714 million in 2017/2018. 


Successful alignment of Theewaterskloof Municipality’s service delivery priorities, as embodied 
in the updated I DP and its focus areas, objectives and perspectives, to that of National and 
Provincial Governments is seen as critical if the Municipality wants to achieve its developmental 
goals. The Strategic Focus Areas developed by Theewaterskloof Municipality are as follows: 


• Financial Viability 

• Good Governance 

• Institutional Development 

• Basic Service Delivery 

• Local Economic Development 


5 



3. Operating Revenue and Expenditure Framework 


Vote Description 

2011112 

2012113 

2013114 

Current Year 2014115 

2015116 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Audited 

Audited 

Original 

Adjusted 

Full Year 

Budget Year 

Budget Year 

Budget Year 

Outcome 

Outcome 

Outcome 


Budget 

Forecast 

2015116 

+12016117 

+2 2017118 

Revenue bv Vote 










Vote 1 - Executive & Council 

1 

7518 

6 571 


7741 

7 741 

2113 


1187 

Vote2 - Finance & Admin 

95 915 

■ 


122 951 

122370 


133 982 

138428 

148511 

Vote 3- Planning & Development 

■ 

2279 

2 371 


2722 

2 722 

3 091 

3 768 

5933 

Vote 4- Community & Social Services 


■ 

6113 

6155 

6432 

6432 

7 090 

7515 

7967 

Vote 5 -Housing 

- 

- 

- 

- 

71162 

71162 

63 643 


■ 

Vote 6 -Public Safely 

■ 

■ 


14 622 

24373 

24 373 

15 306 

16 224 

1 

Vote 7 - Sport & Recreation 

(212) 

(53) 

(332) 

75 




(789) 

(836) 

Vote 8 -Environmental Protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 9 -Waste Management 


23190 

25 517 


■ 


34 812 

36 901 

f§ 

Vote 10 -Waste Water Management 

17 927 

21564 



26907 

26 907 

26 789 

28 397 

30526 

Vote 11 -Roads Transport 

3 878 

■ 


5 601 


1 1 _ ' " 

5 609 

5 825 

6175 

Vote 12 -Water 

1 

1 

39417 


49628 

49 628 

60 848 


■ 

Vote 13 - Electricity 

1 

65153 

69 845 


75482 

75482 

83198 


1 

Vote 14 -Other 

55406 

77311 

82 743 

79 643 

31332 

31 332 


33 517 

34852 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Revenue by Vote 

303 973 

378278 

439 252 

418 577 

454351 

454351 

466 204 

478 899 

508889 

Expenditure bv Vote to be appropriated 










Vote 1 - Executive & Council 

1 

45942 




1 

65154 

JilK ml 

73851 

Vote 2- Finance & Admin 

82425 

130085 

68 339 

55 657 

60441 

60441 

66106 

70 325 

75268 

Vote 3- Planning & Development 

9 598 

10859 

11143 

12318 

12938 

12 938 

14 676 

16 332 

19560 

Vote 4- Community & Social Services 

3 779 

4693 

5 649 

6167 

5946 

5 946 

6498 

7 022 

7588 

Vote 5 -Housing 

3 287 

3485 

3 905 

5495 

45430 

45430 

60 312 

50 992 

45314 

Vote 6 -Public Safely 

10 807 

11362 

31 111 

16 500 

30258 

30 258 

25 632 

27486 

29478 

Vote 7 - Sport & Recreation 

6 272 

6460 

6 389 

7 380 

7507 

7 507 

8 522 

9 056 

9740 

Vote 8 -Environmental Protection 

20 

24 

33 

50 

50 

50 

50 

53 

56 

Vote 9 -Waste Management 

23 538 

22246 

24 884 

25 621 

25925 

25 925 

31 313 

33485 

35812 

Vote 10 -Waste Water Management 

20 052 

19358 

21 436 

24 604 

24414 

24 414 

26171 

27 727 

29583 

Vote 11 - Roads Transport 

21 881 

24165 

25 624 

29 968 

30715 

30 715 

31 389 

33 507 

35937 

Vote 12 -Water 

34 818 

32074 

38 860 

41 496 

41488 

41 488 

43 650 

46457 

49449 

Vote 13 - Electricity 

45469 

48429 

52 790 

59 897 

58207 

58 207 

67121 

73414 

77955 

Vote 14 -Other 

9 709 

4567 

35 714 

27 354 

3298 

3 298 

2 738 

2107 

2234 

Vote 15 - [NAMEOF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Expenditure by Vote 

321 319 

363748 

380 634 

371 591 

410694 

410 694 

449 331 

466 746 

491 826 

Surplus/(Deficit) forthe year 

(17 346) 

14530 

58 618 

46 985 

43656 

43 656 

16 873 

12153 

17063 


6 








4. Capital Expenditure 


Vote Description 

R thousand 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 
Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Capital expenditure - Vote 










Multi-vear expenditure to be appropriated 










Vote 1 - Executive & Council 

3 538 

1 752 

- 

- 

- 

- 

- 

- 

- 

Vote 2 - Finance & Admin 

2 688 

1 630 

- 

- 

- 

- 

- 

- 

- 

Vote 3 - Planning & Development 

- 

4 445 

- 

- 

- 

- 

- 

- 

- 

Vote 4 - Community & Social Services 

274 

- 

- 

- 

794 

794 

- 

- 

- 

Vote 5 - Housing 

22182 

33113 

- 

22 964 

31 229 

31 229 

8 900 

7 314 

6 314 

Vote 6 - Public Safely 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 7 - Sport & Recreation 

- 

695 

3 270 

3 286 

11 245 

11 245 

- 

- 

- 

Vote 8 - Environmental Protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 9 - Waste Management 

808 

347 

- 

- 

- 

- 

- 

- 

- 

Vote 10 - Waste Water Management 

15 491 

21 097 

8 238 

- 

- 

- 

- 

- 

- 

Vote 11 - Roads Transport 

4 046 

8 296 

- 

- 

- 

- 

- 

- 

- 

Vote 12- Water 

10 731 

9 059 

5 688 

- 

- 

- 

- 

- 

- 

Vote 1 3 - Electricity 

5141 

7 889 

- 

2 500 

2 500 

2 500 

- 

- 

- 

Vote 14 - Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Capital multi-year expenditure sub-total 

64 898 

88 323 

17 195 

28 750 

45 768 

45 768 

8 900 

7 314 

6 314 

Sinqle-vear expenditure to be appropriated 










Vote 1 - Executive & Council 

- 

- 

4 099 

2 045 

3 045 

3 045 

4 008 

- 

- 

Vote 2 - Finance & Admin 

- 

- 

705 

626 

624 

624 

890 

- 

- 

Vote 3 - Planning & Development 

- 

- 

2 458 

419 

1 070 

1 070 

421 

- 

- 

Vote 4 - Community & Social Services 

- 

- 

354 

61 

528 

528 

236 

- 

- 

Vote 5 - Housing 

- 

- 

16 661 

- 

- 

- 

- 

- 

- 

Vote 6 - Public Safely 

- 

- 

- 

245 

245 

245 

258 

- 

- 

Vote 7 - Sport & Recreation 

- 

- 

40 

180 

180 

180 

797 

4 000 

- 

Vote 8 - Environmental Protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 9 - Waste Management 

- 

- 

- 

- 

- 

- 

3 000 

- 

- 

Vote 10 - Waste Water Management 

- 

- 

10 368 

18 604 

17 920 

17 920 

22 500 

20 500 

42 000 

Vote 1 1 - Roads T ransport 

- 

- 

5192 

3 263 

4 588 

4 588 

3 800 

16917 

5 400 

Vote 12- Water 

- 

- 

2 428 

9 242 

5 379 

5 379 

4 526 

3 000 

- 

Vote 1 3 - Electricity 

- 

- 

3 445 

4111 

5 831 

5 831 

11 637 

- 

- 

Vote 14 - Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Capital single-year expenditure sub-total 

- 

- 

45 751 

38 797 

39 409 

39 409 

52 073 

44 417 

47 400 

Total Capital Expenditure - Vote 

64 898 

88 323 

62 947 

67 547 

85 177 

85 177 

60 973 

51 731 

53 714 

Capital Expenditure - Standard 










Governance and administration 

6 226 

3 382 

4 947 

3 091 

4 459 

4 459 

4 919 

- 

- 

Executive and council 

772 

901 

1 645 

1 898 

1 898 

1 898 

1 597 

- 

- 

Budget and treasury office 

2 688 

1 630 

4 

42 

40 

40 

38 

- 

- 

Corporate services 

2 766 

851 

3 298 

1 151 

2 521 

2 521 

3 284 

- 

- 

Community and public safety 

22 455 

33 808 

20 325 

26 736 

44 221 

44 221 

10190 

11 314 

6 314 

Community and social services 

274 

- 

354 

61 

1 322 

1 322 

236 

- 

- 

Sport and recreation 

- 

695 

3 309 

3 466 

11 425 

11 425 

797 

4 000 

- 

Public safety 

- 

- 

- 

245 

245 

245 

258 

- 

- 

Housing 

22182 

33113 

16 661 

22 964 

31 229 

31 229 

8 900 

7 314 

6 314 

Health 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Economic and environmental services 

4 046 

12 741 

7 507 

3 263 

4 868 

4 868 

4 200 

16917 

5 400 

Planning and development 

- 

4 445 

2 316 

- 

280 

280 

400 

- 

- 

Road transport 

4 046 

8 296 

5 192 

3 263 

4 588 

4 588 

3 800 

16917 

5 400 

Environmental protection 

r 

¥ 

r 

r 

r 

¥ 

r 

r 

r 

Trading services 

32171 

38 392 

30168 

34 457 

31 630 

31 630 

41 664 

23 500 

42 000 

Electricity 

5141 

7 889 

3 445 

6611 

r 8 331 

8 331 

11 637 

r 

r 

Water 

10 731 

9 059 

8 116 

9 242 

r 5 379 

5 379 

4 526 

3 000 


Waste water management 

15 491 

21 097 

18 607 

18 604 

17 920 

17 920 

22 500 

20 500 

42 000 

Waste management 

808 

347 

¥ 

r 

r 

r 

3 000 

r 

r 

Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Capital Expenditure - Standard 

64 898 

88 323 

62 947 

67 547 

85177 

85177 

60 973 

51 731 

53 714 

Funded bv: 










National Government 

17 582 

35 335 

27 434 

31 706 

30 757 

30 757 

29 717 

33 517 

34 852 

Provincial Government 

24 827 

33 038 

19 307 

23 025 

32 324 

32 324 

8 900 

7 314 

6 314 

District Municipality 

- 


62 

- 

- 


- 

- 

- 

Other transfers and grants 

- 



- 

- 


- 

- 

- 

Transfers recognised - capital 

42 409 

68 373 

46 802 

54 731 

63 081 

63 081 

38 617 

40 831 

41 166 

Public contributions & donations 

- 



- 

- 


- 

- 

- 

Borrowing 

14 442 

5 455 

8 509 

5 670 

10 978 

10 978 

11 550 

- 

3218 

Internally generated funds 

8 047 

14 495 

7 635 

7146 

11 118 

11 118 

10 806 

10 900 

9 330 

Total Capital Funding 

64 898 

88 323 

62 947 

67 547 

85 177 

85 177 

60 973 

51 731 

53 714 


7 


5. Annual budget tables 


The following ten tables set out the municipality’s 2015/2016 budget and 
MTREF to be approved by resolution of Council: 


Budget Summary (Table A1 ) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousands 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Financial Performance 










Property rates 

42 099 

47 607 

58 673 

68 910 

68 910 

68 910 

75 213 

79 726 

85184 

Service charges 

120 757 

131 758 

142 532 

156 249 

156 254 

156 254 

178 274 

191 991 

208 996 

Investment revenue 

1 738 

2 407 

2 904 

2 482 

3 000 

3 000 

2 606 

2 762 

2 928 

T ransfers recognised - operational 

54 865 

74 010 

106 937 

103 590 

122 945 

122 945 

136 386 

126 373 

128167 

Other own revenue 

29110 

49 380 

79 233 

32 676 

41 604 

41 604 

35109 

37 215 

42 448 

Total Revenue (excluding capital transfers and 
contributions) 

248 568 

305 163 

390 278 

363 907 

392 712 

392 712 

427 588 

438 068 

467 723 

Employee costs 

109179 

109 725 

124 568 

139 914 

140 981 

140981 

153 721 

165 858 

179 801 

Remuneration of councillors 

7168 

7410 

8 203 

9 277 

9 277 

9 277 

10 479 

11 108 

11 774 

Depreciation & asset impairment 

49 320 

98 311 

32 816 

23 081 

27 081 

27 081 

27 081 

28 706 

30 428 

Finance charges 

12 928 

12 780 

12 478 

13 433 

12 733 

12 733 

13 496 

14 306 

15164 

Materials and bulk purchases 

41 475 

45 334 

50 043 

54 651 

55 091 

55 091 

62 253 

65 988 

69 948 

T ransfers and grants 

638 

783 

824 

1 000 

1 000 

1 000 

1 000 

1 060 

1 124 

Other expenditure 

100611 

89 405 

151 703 

130 236 

164 532 

164 532 

181 301 

179 720 

183 587 

Total Expenditure 

321 319 

363 748 

380 634 

37 1 591 

410694 

410 694 

449 331 

466 746 

491 826 

Surplus/(Deficit) 

(72 751) 

(58 586) 

g 644 

(7 685) 

(1/982) 

(17 982) 

(21 744) 

(28 678) 

(24 103) 

T ransfers recognised - capital 

55 406 

73116 

48 974 

54 670 

61 638 

61 638 

38 617 

40 831 

41 166 

Contributions recognised - capital & contributed assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Surplus/(Deficit) after capital transfers & 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12153 

17 063 

contributions 










Share of surplus/ (deficit) of associate 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Surplus/(Deficit) for the year 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12153 

1/063 

Capital expenditure & funds sources 










Capital expenditure 

64 898 

88 323 

62 947 

67 547 

85177 

85177 

60 973 

51 731 

53 714 

T ransfers recognised - capital 

42 409 

68 373 

46 802 

54 731 

63 081 

63 081 

38 617 

40 831 

41 166 

Public contributions & donations 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Borrowing 

14 442 

5 455 

8 509 

5 670 

10 978 

10 978 

11 550 

- 

3 218 

Internally generated Hinds 

8 047 

14 495 

7 635 

7146 

11 118 

11 118 

10 806 

10 900 

9 330 

Total sources of capital funds 

64 898 

88 323 

62 947 

67 547 

85177 

85177 

60 973 

51 731 

53 714 

Financial position 










Total current assets 

43 479 

64 331 

76 273 

54 091 

64 013 

64 013 

60 852 

50 271 

49 832 

Total non current assets 

655 214 

703 917 

800 804 

664 223 

858 895 

858 895 

892 787 

915812 

939 097 

Total current liabilities 

57 715 

69 816 

66 587 

58 740 

63155 

63155 

66 438 

67 046 

70162 

Total non current liabilities 

168 910 

165 534 

178 789 

172164 

184 395 

184 395 

194 970 

194 653 

197 321 

Community wealth/Equity 

472 068 

532 899 

631 701 

487 411 

675 358 

675 358 

692 231 

704 383 

721 446 

Cash flows 










Net cash from (used) operating 

46 384 

92 559 

66 799 

74 410 

82 897 

82 897 

41 472 

52 918 

62 005 

Net cash from (used) investing 

(61 554) 

(79 990) 

(60 777) 

(65 891) 

(85 172) 

(85 172) 

(58 726) 

(49 349) 

(51 189) 

Net cash from (used) financing 

13 960 

(6 437) 

4 651 

(1 300) 

(1 084) 

(1 084) 

4 809 

(8 091) 

(4 832) 

Cash/cash equivalents at the year end 

21 414 

27 545 

38 218 

7 235 

34 859 

34 859 

22 414 

17 892 

23 875 

Cash backinq/surplus reconciliation 










Cash and investments available 

21 414 

27 545 

38 218 

7 235 

34 859 

34 859 

22 414 

17 892 

23 875 

Application of cash and investments 

16119 

22 290 

23 216 

(2195) 

20 235 

20 235 

12213 

16 096 

23 677 

Balance - surplus (shortfall) 

5 295 

5 255 

15 002 

9 430 

14 624 

14 624 

10 201 

1 795 

198 

Asset manaqement 










Asset register summary (WDV) 

655 176 

703 893 

800 780 

968 018 

858 876 

858 876 

892 768 

915 793 

939 079 

Depreciation & asset impairment 

49 320 

98 311 

32 816 

23 081 

27 081 

27 081 

27 081 

28 706 

30 428 

Renewal of Existing Assets 

24 784 

43 221 

17 254 

33 999 

32 832 

32 832 

22120 

22 000 

40 500 

Repairs and Maintenance 

15 553 

17 849 

18412 

22 906 

23179 

23179 

26 413 

29 987 

31 787 

Free services 










Cost of Free Basic Services provided 

9 625 

13 505 

- 

22 463 

22 463 

22 463 

32 766 

34 732 

36 816 

Revenue cost of free services provided 

14 426 

16 721 

- 

27 500 

27 500 

27 500 

36 922 

39138 

41 486 

Households below minimum service level 










Water: 

0 

0 

- 

- 

- 

- 

- 

- 

- 

Sanitation/sewerage: 

0 

7 

- 

- 

- 

- 

- 

- 

- 

Energy: 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Retuse: 

0 

0 

- 

- 

- 

- 

- 

- 

- 


8 


























Explanatory notes Table A1 - Budget Summary 


1 . Table A1 is a budget summary and provides a concise overview of the Municipality’s budget 
from all of the major financial perspectives (operating, capital expenditure, financial position, 
cash flow, and MFMA funding compliance). 

2. The table provides an overview of the amounts approved by Council for operating 
performance, resources deployed to capital expenditure, financial position, cash and funding 
compliance. 

3. Financial management reforms emphasises the importance of the municipal budget being 
funded. This requires the simultaneous assessment of the Financial Performance, Financial 
Position and Cash Flow Budgets, along with the Capital Budget. The Budget Summary 
provides the key information in this regard: 

a. The operating surplus/deficit (after Total Expenditure) is negative over the MTREF 

b. Capital expenditure is balanced by capital funding sources, of which 

i. Transfers recognised is reflected on the Financial Performance Budget; 

ii. Borrowing is incorporated in the net cash from financing on the Cash Flow 
Budget and indicates that the repayment of loans exceed the envisaged new 
borrowing; 

iii. Internally generated funds are financed from a combination of the current 
operating surplus and input VAT reclaimed on conditional grants. The amount 
is incorporated in the Net cash from investing on the Cash Flow Budget. The 
fact that the municipality’s cash flow remains positive, and is improving 
indicates that the necessary cash resources are available to fund the Capital 
Budget. 

4. The section on Free Services shows that the amount spent on Free Basic Services and the 
revenue cost of free services provided by the municipality continues to increase. In addition, 
the municipality continues to make progress in addressing service delivery backlogs. 


9 



Budgeted Financial Performance (Revenue and Expenditure by standard classification) 
(Table A2) 


Standard Classification Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Revenue ■ Standard 










Governance and administration 

156 416 

209 845 

237 228 

211036 

161 443 

161 443 

166 562 

173 049 

184 550 

Executive and council 

2218 

5414 

4 700 

6461 

5 793 

5 793 

198 

133 

139 

Budgetand treasury office 

143790 

178927 

201 350 

198 851 

152334 

152334 

162277 

169643 

180923 

Corporate services 

10408 

25 503 

31178 

5 724 

3316 

3316 

4087 

3273 

3488 

Community and public safety 

7 400 

14145 

35 803 

20 852 

101 282 

101 282 

85 295 

75251 

72 479 

Community and social services 

4 574 

6120 

6113 

6155 

6432 

6432 

7 090 

7 515 

7 967 

Sport and recreafon 

(212) 

(53) 

(332) 

75 

(685) 

(685) 

(744) 

(789) 

(836) 

Public safety 

3039 

8077 

30 022 

14622 

24373 

24373 

15 306 

16224 

20198 

Housing 

- 

- 

- 

- 

71162 

71162 

63643 

52 300 

45150 

Health 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Economic and environmental services 

5 498 

7183 

7 712 

7 627 

9 406 

9 406 

8 700 

9 593 

12108 

Planning and development 

1620 

2279 

2 371 

2 026 

2722 

2722 

3 091 

3 768 

5933 

Road transport 

3878 

4904 

5 340 

5601 

6684 

6684 

5609 

5 825 

6175 

Environmental protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Trading services 

134 659 

147106 

158 509 

179 062 

182 219 

182 219 

205 647 

221 006 

239 752 

Electricity 

58989 

65153 

69 845 

75 906 

75482 

75482 

83198 

91 210 

100175 

Water 

37 466 

37 200 

39417 

47 056 

49628 

49628 

60 848 

64499 

69013 

Waste water management 

17 927 

21564 

23730 

25 898 

26907 

26 907 

26 789 

28397 

30526 

Waste management 

20277 

23190 

25 517 

30202 

30202 

30202 

34812 

36901 

40038 

Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Revenue ■ Standard 

303 973 

378 278 

439 252 

418 577 

454 351 

454 351 

466 204 

478 899 

508 889 

Expenditure -Standard 










Governance and administration 

144 680 

183 499 

161 744 

146 042 

131 766 

131 766 

138169 

145 733 

156 252 

Executive and council 

23071 

18882 

26275 

28 563 

32390 

32390 

31 528 

33619 

35 934 

Budgetand treasury office 

36637 

31232 

65 995 

58 821 

35 993 

35 993 

37 987 

40125 

43070 

Corporate services 

84 972 

133384 

69474 

58659 

63383 

63383 

68654 

71 990 

77 248 

Community and public safety 

24145 

25 999 

47 720 

35 543 

89141 

89141 

100 964 

94 556 

92120 

Community and social services 

3779 

4693 

5649 

6167 

5 946 

5 946 

6498 

7 022 

7 588 

Sport and recreafon 

6272 

6460 

6 389 

7 380 

7 507 

7 507 

8 522 

9056 

9740 

Public safety 

10807 

11362 

31 777 

16 500 

30258 

30258 

25632 

27 486 

29478 

Housing 

3287 

3485 

3 905 

5495 

45430 

45430 

60 312 

50 992 

45 314 

Health 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Economic and environmental services 

28 616 

32144 

33 200 

38 389 

39 753 

39 753 

41 945 

45 373 

50 654 

Planning and development 

6715 

7 955 

7 542 

8 370 

8988 

8988 

10 506 

11812 

14661 

Road transport 

21 881 

24165 

25624 

29 968 

30715 

30715 

31 389 

33 507 

35 937 

Environmental protection 

20 

24 

33 

50 

50 

50 

50 

53 

56 

Trading services 

123 878 

122107 

137 970 

151 618 

150 035 

150 035 

168 254 

181 083 

192 800 

Electricity 

45 469 

48429 

52 790 

59897 

58207 

58207 

67121 

73414 

77 955 

Water 

34818 

32074 

38860 

41 496 

41488 

41488 

43650 

46457 

49449 

Waste water management 

20052 

19358 

21 436 

24 604 

24414 

24414 

26171 

27 727 

29583 

Waste management 

23538 

22246 

24884 

25621 

25 925 

25 925 

31313 

33485 

35 812 

Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Expenditure - Standard 

321 319 

363 748 

380 634 

371 591 

410 694 

410 694 

449 331 

466 746 

491 826 

Surplus/(Deficit) for the year 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12153 

17 063 


10 








Explanatory notes to Table A2 - Budgeted Financial Performance (revenue 
and expenditure by standard classification) 

1. Table A2 is an illustration of the budgeted financial performance in relation to revenue and 
expenditure per standard classification. The modified GFS standard classification divides 
the municipal services into 15 functional areas. Municipal revenue, operating expenditure 
and capital expenditure are then classified in terms of each of these functional areas which 
enable the National Treasury to compile standardised reports. 

2. Note the Total Revenue on this table includes capital revenues (Transfers recognised - 
capital) and so does not balance to the operating revenue shown on Table A4. 

3. Note that as a general principle the revenues for the Trading Services should exceed their 
expenditures. The table highlights that this is the case for Electricity, Water and Waste 
management function. 

4. Other functions that show a deficit between revenue and expenditure are being financed 
from rates revenues and other revenue sources reflected under the Budget and treasury 
office. 


11 




Budgeted Financial Performance (Revenue and Expenditure by municipal vote)(Table A3) 


Vote Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Revenue bv Vote 










Vote 1 - Executive & Council 

5 096 

7 518 

6 571 

8 442 

7 741 

7 741 

2113 

1 104 

1 187 

Vote 2- Finance & Admin 

95 915 

125 016 

147 914 

122 951 

122 370 

122 370 

133 982 

138428 

148 511 

Vote 3 - Planning & Development 

1620 

2 279 

2 371 

2 026 

2 722 

2 722 

3 091 

3 768 

5933 

Vote 4 - Community & Social Services 

4 5/4 

6120 

6113 

6155 

6 432 

6432 

7 090 

7 515 

7967 

Vote 5 - Housing 

- 

- 

- 

- 

71 162 

71 162 

63 643 

52 300 

45150 

Vote 6 - Public Safely 

3 039 

8 077 

30 022 

14 622 

24 373 

24 373 

15 306 

16 224 

20198 

Vote 7 - Sport& Recreation 

(212) 

(53) 

(332) 

75 

(685) 

(685) 

(744) 

(789) 

(836) 

Vote 8 - Environmental Protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 9 - Waste Management 

20 277 

23190 

25 517 

30 202 

30 202 

30 202 

34 812 

36 901 

40 038 

Vote 10 - Waste Water Management 

17 927 

21564 

23 730 

25 898 

26 907 

26 907 

26 789 

28 397 

30 526 

Vote 1 1 - Roads T ransport 

3 878 

4 904 

5 340 

5601 

6 684 

6 684 

5 609 

5 825 

6175 

Vote 12 -Water 

37 466 

37 200 

39417 

47 056 

49 628 

49 628 

60 848 

64 499 

69013 

Vote 13 - Electricily 

58 989 

65153 

69 845 

75906 

75482 

75482 

83198 

91 210 

100 175 

Vote 14 -Other 

55 406 

77 311 

82 743 

79643 

31332 

31 332 

30467 

33 517 

34 852 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Revenue by Vote 

303 973 

378 278 

439 252 

418 577 

454 351 

454 351 

466 204 

478 899 

508 889 

Expenditure by Vote to be appropriated 










Vote 1 - Executive & Council 

49 663 

45 942 

54 090 

59 084 

64 078 

64 078 

65154 

68 781 

73 851 

Vote 2- Finance & Admin 

82 425 

130 085 

68 339 

55657 

60 441 

60441 

66106 

70 325 

75268 

Vote 3 - Planning & Development 

9 598 

10 859 

11 143 

12 318 

12 938 

12 938 

14 676 

16 332 

19 560 

Vote 4 - Community & Social Services 

3 779 

4 693 

5 649 

6167 

5 946 

5 946 

6498 

7 022 

7 588 

Vote 5 - Housing 

3 287 

3485 

3 905 

5495 

45430 

45430 

60 312 

50 992 

45 314 

Vote 6 - Public Safely 

10 807 

11362 

31777 

16 500 

30 258 

30 258 

25 632 

27486 

29 478 

Vote 7 - Sport& Recreation 

6 272 

6460 

6 389 

7 380 

7 507 

7 507 

8 522 

9 056 

9 740 

Vote 8 - Environmental Protection 

20 

24 

33 

50 

50 

50 

50 

53 

56 

Vote 9 - Waste Management 

23 538 

22 246 

24 884 

25621 

25 925 

25 925 

31 313 

33485 

35812 

Vote 10 - Waste Water Management 

20 052 

19 358 

21 436 

24 604 

24 414 

24 414 

26171 

27 727 

29 583 

Vote 1 1 - Roads T ransport 

21 881 

24165 

25 624 

29 968 

30 715 

30 715 

31 389 

33 507 

35 937 

Vote 12 -Water 

34 818 

32 074 

38 860 

41496 

41488 

41 488 

43 650 

46457 

49 449 

Vote 13 - Electricily 

45 469 

48429 

52 790 

59 897 

58207 

58 207 

67121 

73414 

77955 

Vote 14 -Other 

9 709 

4 567 

35 714 

27 354 

3298 

3 298 

2 738 

2107 

2 234 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Expenditure by Vote 

321 319 

363 748 

380 634 

371 591 

410 694 

410 694 

449 331 

466746 

491 826 

Surplus/(Deficit) forthe year 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12153 

17 063 


Explanatory notes to Table A3 - Budgeted Financial Performance (revenue 

and expenditure by municipal vote) 

1. Table A3 illustrates the budgeted financial performance in relation to the revenue and 
expenditure per municipal vote. This table facilitates the view of the budgeted operating 
performance in relation to the GFS classification and not necessarily the organisational 
structure of the Municipality. 


Function 

Income 

R’OOO 

Expenditure 

R’OOO 

Admin 

Charges 

Surplus/(deficit) 

R’OOO 

Water 

60 , 848 

(43, 650) 

(4, 549) 

12, 649 

Electricity 

83, 198 

(67, 121) 

(4, 734) 

11, 343 

Waste Water 

26, 789 

(26, 171) 

(3, 452) 

(2, 834) 

Management 





Refuse Removal 

34, 812 

(31, 313) 

(3, 588) 

(89) 


12 



Budgeted Financial Performance (Revenue and Expenditure) (Table A4) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue 81 Expenditure 
Framework 

R thousand 

Audited 

Audited 

Audited 

Original 

Adjusted 

Full Year 

Budget Year 

Budget Year 

Budget Year 

Outcome 

Outcome 

Outcome 

Budget 

Budget 

Forecast 

2015/16 

+1 2016/17 

+2 2017/18 

Revenue Bv Source 










Property rales 

42 099 

47 607 

58 673 

68 910 

68 910 

68 910 

75 213 

79 726 

85184 

Property rates - penalties & collection charges 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Service charges - electricity revenue 

57 379 

60 369 

64 594 

72 911 

69 284 

69 284 

77 958 

85 656 

94288 

Service charges - water revenue 

35 255 

34 904 

37 087 

40136 

42 709 

42 709 

53 252 

56448 

60 479 

Service charges - sanitation revenue 

14 623 

18 025 

19 983 

20 248 

21 257 

21 257 

20 856 

22107 

23 860 

Service charges - raise revenue 

16 074 

18460 

20 723 

22 795 

22 795 

22 795 

25 849 

27400 

29 967 

Service charges - other 

(2 574) 

- 

145 

159 

210 

210 

358 

379 

402 

Renbl offecilifes and equipment 

1 105 

1409 

1 936 

1607 

1 766 

1 766 

1 764 

1 869 

1 982 

Interest earned - external investments 

1 738 

2407 

2 904 

2 482 

3 000 

3 000 

2 606 

2 762 

2 928 

Interest earned - outstanding debtors 

7 834 

7617 

9 267 

6 480 

6 480 

6480 

6 804 

7 212 

7 645 

Dividends received 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Fines 

2 942 

7 984 

29 835 

14 334 

24 284 

24 284 

15 257 

16172 

20143 

Licences and permits 

2 926 

2 626 

2 635 

2 724 

2 469 

2469 

2 603 

2 759 

2 924 

Agency services 

1 836 

1 957 

2189 

2 332 

2 400 

2400 

2478 

2 626 

2 784 

T ransfers recognised - operational 

54 865 

74 010 

106 937 

103 590 

122 945 

122 945 

136 386 

126 373 

128167 

Other revenue 

12467 

27 788 

33 060 

4 963 

4 205 

4 205 

3 957 

4194 

4 446 

Gains on disposal of PPE 

- 

- 

310 

235 

- 

- 

2 247 

2 382 

2 524 

Total Revenue (excluding capital transfers and 
contributions) 

248 568 

305 163 

390 278 

363 907 

392 712 

392 712 

427 588 

438 068 

467 723 

Expenditure Bv Tvne 










Employee related costs 

109179 

109 725 

124 568 

139914 

140 981 

140 981 

153 721 

165 858 

179801 

Remuneration of councillors 

7168 

7410 

8 203 

9 277 

9 277 

9 277 

10479 

11 108 

11 774 

Debt impairment 

32 422 

22 703 

47 240 

23 730 

37 553 

37 553 

31 745 

33 650 

35669 

Depreciation & asset impairment 

49 320 

98 311 

32 816 

23 081 

27 081 

27 081 

27 081 

28 706 

30 428 

Finance charges 

12 928 

12 780 

12478 

13 433 

12 733 

12 733 

13496 

14 306 

15164 

Bulk purchases 

41 475 

45 334 

50 043 

54 651 

55 091 

55 091 

62 253 

65 988 

69 948 

Other materials 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Contracted services 

11 308 

15 273 

17 749 

19 721 

18 746 

18 746 

24 388 

25 851 

27 402 

Transfers and grants 

638 

783 

824 

1000 

1 000 

1 000 

1 000 

1 060 

1 124 

Other expend ibre 

56 635 

50129 

86 372 

86 784 

108 233 

108 233 

125168 

120 219 

120 516 

Loss on disposal of PPE 

247 

1 300 

341 

- 

- 

- 

- 

- 

- 

Total Expenditure 

321 319 

363 748 

380 634 

371 591 

410 694 

410 694 

449 331 

466 746 

491 826 

Surplus/(Deficit) 

(72 751) 

(58 586) 

9 644 

(7 685) 

(17 982) 

(17 982) 

(21 744) 

(28 678) 

(24 103) 

T ransfers recognised - capital 

55406 

73116 

48 974 

54 670 

61 638 

61 638 

38 617 

40 831 

41 166 

Contributions recognised - capital 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Contributed assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Surplus/(Deficit) after capital transfers & 
contributions 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12153 

17 063 

Taxation 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Surplus/(Deficit) after taxation 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12153 

17 063 

Attributable to minorities 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Surplus/(Deficit) attributable to municipality 

(17 346) 

14 530 

58 618 

46 985 

43 656 

43 656 

16 873 

12 153 

17 063 

Share of surplus/ (deficit) of associate 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Surplus/(Deficit) forthe year 

(17 346) 

14 530 

58 618 

46985 

43 656 

43 656 

16 873 

12153 

17 063 


Explanatory notes to Table A4 - Budgeted Financial Performance (revenue 

and expenditure)excluding capital transfers and contributions. 

1. Total operating revenue is R466, 204 in 2015/16 and increases to R508, 889 million by 
2017/18. This represents a year-on-year increase of 2.6 per cent for the 2015/16, 2.7 per 
cent for the 2016/17 financial year and 6.3 per cent for the 2017/18 financial year. 

2. Revenue to be generated from property rates is R75, 213 million in the 2015/16 financial 
year and increases to R79, 726million by 2016/17 which represents 16 per cent of the 
operating revenue base of the Municipality and therefore remains a significant funding 
source for the municipality. 


13 


3. Services charges relating to electricity, water, sanitation and refuse removal constitutes the 
biggest component of the revenue basket of the Municipality totaling R1 78, 274million for the 
2015/16 financial year and increasing to R208, 996 million by 2017/18. For the 2015/16 
financial year services charges amount to 38 per cent of the total revenue base. 

4. Transfers recognised - operating includes the local government equitable share and other 
operating grants from national and provincial government. 


5. Bulk purchases have significantly increased over the 2011/12 to 2015/16 period, escalating 
from R41, 475 million to R62, 253million. These increases can be attributed to the 
substantial increase in the cost of bulk electricity from Eskom and water from Overberg 
Water. 

6. Employee related costs and bulk purchases are the main cost drivers within the municipality. 


14 



Budgeted Capital Expenditure by vote, standard classification and funding (Table A5) 


Vote Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 
Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Capital expenditure - Vote 

Multi-vear expenditure to be appropriated 










Vote 1 - Executive & Council 

3 538 

1 752 

- 

- 

- 

- 

- 

- 

- 

Vote 2 - Finance & Admin 

2 688 

1 630 

- 

- 

- 

- 

- 

- 

- 

Vote 3 - Planning & Development 

- 

4 445 

- 

- 

- 

- 

- 

- 

- 

Vote 4 - Community & Social Services 

274 

- 

- 

- 

794 

794 

- 

- 

- 

Vote 5 - Housing 

22182 

33113 

- 

22 964 

31 229 

31 229 

8 900 

7 314 

6 314 

Vote 6 - Public Safely 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 7 - Sport & Recreation 

- 

695 

3 270 

3 286 

11 245 

11 245 

- 

- 

- 

Vote 8 - Environmental Protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 9 - Waste Management 

808 

347 

- 

- 

- 

- 

- 

- 

- 

Vote 10 - Waste Water Management 

15 491 

21 097 

8 238 

- 

- 

- 

- 

- 

- 

Vote 11 - Roads Transport 

4 046 

8 296 

- 

- 

- 

- 

- 

- 

- 

Vote 12- Water 

10 731 

9 059 

5 688 

- 

- 

- 

- 

- 

- 

Vote 1 3 - Electricity 

5141 

7 889 

- 

2 500 

2 500 

2 500 

- 

- 

- 

Vote 14 - Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Capital multi-year expenditure sub-total 

64 898 

88 323 

17195 

28 750 

45 768 

45 768 

8 900 

7 314 

6 314 

Sinqle-vear expenditure to be appropriated 










Vote 1 - Executive & Council 

- 

- 

4 099 

2 045 

3 045 

3 045 

4 008 

- 

- 

Vote 2 - Finance & Admin 

- 

- 

705 

626 

624 

624 

890 

- 

- 

Vote 3 - Planning & Development 

- 

- 

2 458 

419 

1 070 

1 070 

421 

- 

- 

Vote 4 - Community & Social Services 

- 

- 

354 

61 

528 

528 

236 

- 

- 

Vote 5 - Housing 

- 

- 

16 661 

- 

- 

- 

- 

- 

- 

Vote 6 - Public Safely 

- 

- 

- 

245 

245 

245 

258 

- 

- 

Vote 7 - Sport & Recreation 

- 

- 

40 

180 

180 

180 

797 

4 000 

- 

Vote 8 - Environmental Protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 9 - Waste Management 

- 

- 

- 

- 

- 

- 

3 000 

- 

- 

Vote 10 - Waste Water Management 

- 

- 

10 368 

18 604 

17 920 

17 920 

22 500 

20 500 

42 000 

Vote 1 1 - Roads T ransport 

- 

- 

5192 

3 263 

4 588 

4 588 

3 800 

16917 

5 400 

Vote 12- Water 

- 

- 

2 428 

9 242 

5 379 

5 379 

4 526 

3 000 

- 

Vote 1 3 - Electricity 

- 

- 

3 445 

4111 

5 831 

5 831 

11 637 

- 

- 

Vote 14 - Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Vote 15 -[NAME OF VOTE 15] 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Capital single-year expenditure sub-total 

- 

- 

45 751 

38 797 

39 409 

39 409 

52 073 

44 417 

47 400 

Total Capital Expenditure - Vote 

64 898 

88 323 

62 947 

67 547 

85177 

85177 

60 973 

51 731 

53 714 

Capital Expenditure - Standard 










Governance and administration 

6 226 

3 382 

4 947 

3 091 

4 459 

4 459 

4 919 

- 

- 

Executive and council 

772 

901 

1 645 

1 898 

1 898 

1 898 

1 597 

- 

- 

Budget and treasury office 

2 688 

1 630 

4 

42 

40 

40 

38 

- 

- 

Corporate services 

2 766 

851 

3 298 

1 151 

2 521 

2 521 

3 284 

- 

- 

Community and public safety 

22 455 

33 808 

20 325 

26 736 

44 221 

44 221 

10190 

11 314 

6 314 

Community and social services 

274 

- 

354 

61 

1 322 

1 322 

236 

- 

- 

Sport and recreation 

- 

695 

3 309 

3 466 

11 425 

11 425 

797 

4 000 

- 

Public safety 

- 

- 

- 

245 

245 

245 

258 

- 

- 

Housing 

22182 

33113 

16 661 

22 964 

31 229 

31 229 

8 900 

7 314 

6 314 

Health 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Economic and environmental services 

4 046 

12 741 

7 507 

3 263 

4 868 

4 868 

4 200 

16917 

5 400 

Planning and development 

- 

4 445 

2 316 

- 

280 

280 

400 

- 

- 

Road transport 

4 046 

8 296 

5192 

3 263 

4 588 

4 588 

3 800 

16917 

5 400 

Environmental protection 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Trading services 

32171 

38 392 

30168 

34 457 

31 630 

31 630 

41 664 

23 500 

42 000 

Electricity 

5141 

7 889 

3 445 

6611 

8 331 

8 331 

11 637 

- 

- 

Water 

10 731 

9 059 

8116 

9 242 

5 379 

5 379 

4 526 

3 000 

- 

Waste water management 

15491 

21 097 

18 607 

18 604 

17 920 

17 920 

22 500 

20 500 

42 000 

Waste management 

808 

347 

- 

- 

- 

- 

3 000 

- 

- 

Other 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Capital Expenditure - Standard 

64 898 

88 323 

62 947 

67 547 

85177 

85 177 

60 973 

51 731 

53 714 

Funded bv: 










National Government 

17 582 

35 335 

27 434 

31 706 

30 757 

30 757 

29 717 

33 517 

34 852 

Provincial Government 

24 827 

33 038 

19 307 

23 025 

32 324 

32 324 

8 900 

7 314 

6 314 

District Municipality 

- 

- 

62 

- 

- 

- 

- 

- 

- 

Other transfers and grants 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Transfers recognised - capital 

42 409 

68 373 

46 802 

54 731 

63 081 

63 081 

38 617 

40 831 

41 166 

Public contributions & donations 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Borrowing 

14 442 

5 455 

8 509 

5 670 

10 978 

10 978 

11 550 

- 

3218 

Internally generated funds 

3 047 

14 495 

7 635 

7146 

11 118 

11 118 

10 806 

10 900 

9 330 

Total Capital Funding 

64 898 

88 323 

62 947 

67 547 

85 177 

85 177 

60 973 

51 731 

53 714 


15 


Explanatory notes to Table A5 - Budgeted Capital Expenditure by vote, 
standard classification and funding source 

1. Table A5 is a breakdown of the capital programme in relation to capital expenditure by 
municipal vote (multi-year and single-year appropriations); capital expenditure by standard 
classification; and the funding sources necessary to fund the capital budget, including 
information on capital transfers from national and provincial departments. 

2. The MFMA provides that a municipality may approve multi-year or single-year capital budget 
appropriations. The capital budget of 2015/16 makes provision for an amount of R60, 973 
million. This allocation decrease to R51, 731 million in 2016/17 and R53, 714 million in 
2017/18. 


3. The capital programme is funded from National and Provincial grants, which includes 
Municipal Infrastructure Grant, Regional Bulk Infrastructure Grant, National Electrification 
Grant and Housing, borrowing and internally generated funds from current year surpluses. 
For 2015/16, capital transfers (excluding VAT) totals R38, 617 million (63 per cent) and 
increase to R41, 166 million by 2017/18. Borrowing has been provided at R11, 550 million 
for the 2015/1 6financial year. Internally generated funding totaling R10, 806 million for 
2015/2016 and R9, 330 million for 2017/2018. These funding sources are further discussed 
in detail in section 12 (Overview of Budget Funding). 


16 




Budgeted Financial Position (Table A6) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Audited 

Audited 

Original Budget 

Adjusted 


Full Year 


Budget Year 


Budget Year 

Budget Year 

Outcome 

Outcome 

Outcome 

Budget 


Forecast 


2015/16 


+1 2016/17 


+2 2017/18 

ASSETS 

Current assets 










Cash 

6 372 

6 805 

11 251 

7 235 

4 859 

? 

4 859 

r 

2414 

r 

7 892 

V 

3 875 

Call investment deposits 

15 042 

20 740 

26 967 

- 

30 000 


30 000 


20 000 


10 000 


20 000 

Consumer debtors 

17 077 

27 099 

27 745 

41 651 

23 948 


23 948 


33 232 


27174 


20 751 

Other debtors 

2 726 

7 761 

8 023 

3 000 

3 000 


3 000 


3 000 


3 000 


3 000 

Current portion of long-term receivables 

5 

5 

5 

5 

5 

r 

5 

r 

5 

r 

5 

r 

5 

Inventory 

2 257 

1 922 

2 282 

2 200 

2 200 


2 200 


2 200 


2 200 


2 200 

Total current assets 

43 479 

64 331 

76 273 

54 091 

64 013 

64 013 

60 852 

50 271 

49 832 

Non current assets 










Long-term receivables 

38 

24 

24 

19 

18 


18 


18 


18 


18 

Investments 

- 

- 

- 

- 


r 

- 


- 


- 


- 

Investment property 

204 491 

145 292 

158 513 

124 561 

149 003 

r 

149 003 

r 

139 493 

f 

127 389 

r 

114 559 

Investment in Associate 

- 

- 

- 

- 


r 

- 


- 


- 


- 

Property, plant and equipment 

448 559 

556 708 

640 694 

538 070 

708 620 


708 620 

752 341 

787 749 

824161 

Agricultural 

- 

- 

- 

- 


r 

- 


- 


- 


- 

Biological 

- 

- 

- 

- 



- 


- 


- 


- 

Intangible 

2126 

1893 

1 573 

1 573 

1254 


1254 


934 


655 


359 

Other non-current assets 

- 

- 

- 

- 



- 


- 


- 


- 

Total non current assets 

655 214 

703 917 

800 804 

664 223 

858 895 

858 895 

892 787 

915812 

939 097 

TOTAL ASSETS 

698 693 

768 249 

877 077 

718 315 

922 908 

922 908 

953 639 

966 082 

988 929 

LIABILITIES 

Current liabilities 










Bankoverdrat 

- 

- 

- 

- 


•- 


r 


r 

- 

r 

- 

Borrowing 

6 518 

6 979 

6 974 

8 338 

6 974 


6 974 

8 338 

8 312 

9 223 

Consumer deposits 

3 245 

3 306 

3 660 

3 763 

3 879 

r 

3 879 

r 

4112 

■■■ 

4 359 

r 

4 621 

Trade and other payables 

31 946 

46 831 

42 055 

34 331 

37 292 


37 292 

38 979 

39 366 

41 309 

Provisions 

16 005 

12 700 

13 898 

12 308 

15010 

r 

15010 

r 

15 010 

r 

15010 

V 

15010 

Total current liabilities 

57 715 

69 816 

66 587 

58 740 

63155 

63155 

66 438 

67 046 

70162 

Non current liabilities 














Borrowing 

112 747 

105 788 

110 091 

102 980 

114 095 


114 095 


117 307 


108 996 


102 991 

Provisions 

56163 

59 746 

68 698 

69183 

70 300 


70 300 


77 663 


85 658 


94 330 

Total non current liabilities 

168 910 

165 534 

178 789 

172164 

184 395 

184 395 

194 970 

194 653 

197 321 

TOTAL LIABILITIES 

226 625 

235 350 

245 376 

230 904 

247 550 

247 550 

261 408 

261 699 

26/483 

NET AS SETS 

472 068 

532 899 

631 701 

487 410 565.91 

675 358 

675 358 

692 231 

704 383 

721 446 

COMMUNITY WEALTH/EQUITY 










Accumulated Surplus/(Deficit) 

r 460 590 

r 491 253 

r 543 871 

443 297 

r 587 701 

w 

587 701 

r 

607 389 

r 

619 542 

r 

636 605 

Reserves 

11478 

41 647 

87 830 

44114 

87 656 

87 656 

84 841 

84 841 

84 841 

Minorities' interests 

- 

- 

- 

- 


r 

- 

- 

- 

- 

TOTAL COMMUNITY WEALTH/EQUITY 

472 068 

532 899 

631 701 

487 410 565.91 

675 358 

675 358 

692 231 

704 383 

721 446 


Explanatory notes to Table A6 - Budgeted Financial Position 

1. Table A6 is consistent with the standards of Generally Recognized Accounting Practice 
(GRAP), as with the financial Statements, and improves understandability of the impact of 
the budget on the statement of financial position (balance sheet). 

2. This format of presenting the statement of financial position is aligned to GRAP1, which is 
generally aligned to the international version which presents Assets less Liabilities as 
“accounting” Community Wealth. The order of items within each group illustrates items in 
order of liquidity; i.e. assets readily convertible into cash, or liabilities immediately required to 
be met from cash, appear first. 


3. Table A6 is supported by an extensive table of notes (SA3 which can be found on page 81) 
providing a detailed analysis of the major components of a number of items, including: 

• Call investments deposits; 

• Consumer debtors; 

• Property, plant and equipment; 

• Trade and other payables; 


17 


• Provisions non-current; 

• Changes in net assets; and 

• Reserves 

4. The municipal equivalent of equity is Community Wealth/Equity. The justification is that 
ownership and the net assets of the municipality belong to the community. 

5. Any movement on the Budgeted Financial Performance or the Capital Budget will inevitably 
impact on the Budgeted Financial Position. As an example, the collection rate assumption 
will impact on the cash position of the municipality and subsequently inform the level of cash 
and cash equivalents at year end. Similarly, the collection rate assumption should inform the 
budget appropriation for debt impairment which in turn would impact on the provision for bad 
debt. These budget and planning assumptions form a critical link in determining the 
applicability and relevance of the budget as well as the determination of ratios and financial 
indicators. In addition the funding compliance assessment is informed directly by forecasting 
the statement of financial position. 


18 



Budgeted Cash Flows (Table A7) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue 81 Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

CASH FLOW FROM OPERATING ACTIVITIES 
Receipts 










Property rates, penalties & collection charges 

42 099 

47 607 

58 673 

61 980 

58 788 

58 788 

63 358 

71840 

76930 

Service charges 

120 757 

131 967 

142 532 

140121 

137 642 

r 137 642 

150173 

173 000 

188 744 

Other revenue 

(9 185) 

r (15 014) 

(2452) 

25 961 

35430 

35430 

26 058 

27 621 

32 279 

Government - operatng 

56 428 

63 624 

67 750 

103 590 

127 946 

* 127 946 

136 386 

126 373 

128167 

Government - capital 

58 973 

77 511 

79159 

54670 

61 638 

61 638 

38 617 

40 831 

41 166 

Interest 

9 572 

10 024 

12171 

8 962 

9480 

9480 

8 338 

9 261 

9 832 

Dividends 

- 

- 

- 

- 

- 

r 

- 

- 

- 

Payments 










Suppliers and employees 

(218 692) 

(209 598) 

(277468) 

(307 741) 

(335 595) 

r (335 595) 

(368 260) 

(382 021) 

(400 286) 

Finance charges 

(12 928) 

(12 780) 

(12 742) 

(12133) 

(11 433) 

f (11 433) 

(12196) 

(12 928) 

(13703) 

Transfers and Grants 

(638) 

(783) 

(824) 

(1 000) 

(1 000) 

(1 000) 

(1 000) 

(1 060) 

(1 124) 

NET CASH FR0M/(USED) OPERATING ACTIVITIES 

46 384 

92 559 

66 799 

74410 

82 897 

82 897 

41 472 

52 918 

62 005 

CASH FLOWS FROM INVESTING ACTIVITIES 
Receipts 










Proceeds on disposal of PPE 

3 689 

8 398 

1584 

1656 


¥ 

2 247 

2 382 

2 524 

Decrease (Increase) in non-current debtors 

- 

- 

- 

- 


¥ 

- 

- 

- 

Decrease (increase) other non-current receivables 

3 

13 

586 

- 

5 

' 5 

- 

- 

- 

Decrease (increase) in non-current investments 

- 

- 

- 

- 


¥ 

- 

- 

- 

Payments 










Capital assets 

(65 246) 

(88401) 

(62 947) 

(67 547) 

(85 177) 

* (85 177) 

(60 973) 

(51 731) 

(53714) 

NETCASH FROM iUSED.i INVESTING ACTIVITIES 

(61 554) 

(79 990) 

(60 777) 

(65 891) 

(85 172) 

(85 172) 

(58 726) 

(49349) 

(51 189) 

CASH FLOWS FROM FINANCING ACTIVITIES 
Receipts 










Shortterm loans 

- 

- 

- 

- 


¥ 

- 

- 

- 

Borrowing long term/relinancing 

21 385 

23 

11275 

5670 

5670 

5 670 

11550 

- 

3218 

Increase (decrease) in consumer deposits 

95 

61 

354 

213 

220 

220 

233 

247 

262 

Payments 










Repay ment of borrowing 

(7 520) 

(6 521) 

(6 978) 

(7183) 

(6 974) 

(6 974) 

(6 974) 

(8 338) 

(8 312) 

NETCASH FR0M/(USED) FINANCING ACTIVITIES 

13 960 

(6 437) 

4 651 

(1 300) 

(1 084) 

(1 084) 

4 809 

(8 091) 

(4 832) 

NET INCREASE/ (DECREASE) IN CASH HELD 

(1210) 

6131 

10 673 

7 220 

(3 359) 

(3 359) 

(12 445) 

(4 522) 

5 984 

Cash/cash equivalents at the year begin: 

22 624 

21414 

' 27 545 

15 

38 218 

38 218 

34 859 

22 414 

17 892 

Cash/cash equivalents at the year end: 

21 414 

27 545 

38 218 

7 235 

34 859 

34 859 

22 414 

17 892 

23 875 


Explanatory notes to Table A7 - Budgeted Cash Flow Statement 

1 . The budgeted cash flow statement is the first measurement in determining if the budget is 
funded. 

2. It shows the expected level of cash in-flow versus cash out-flow that is likely to result from 
the implementation of the budget. 

3. Cash and cash equivalents totals R34, 859 million (adjustment budget) as at the end of the 
2014/15 financial year and decrease to R23, 875 million by the end of 2017/18. 


19 


Cash Backed reserves/accumulal 

ed surp 

us reconciliation (Table A8) 




Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+22017/18 

Cash and investments available 










Cash/cash equivalents at tie year end 

21414 

27 545 

38 218 

7235 

34859 

34 859 

22414 

17 892 

23875 

Other current investments >90 days 

0 

0 

0 

- 

0 

0 

- 

- 

- 

Non currentassets - Investments 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Cash and investments available: 

21 414 

27 545 

38 218 

7235 

34859 

34859 

22 414 

17 892 

23875 

Application of cash and investments 










Unspentconditional transfers 

7 554 

5 529 

1312 

- 

- 

- 

- 

- 

- 

Unspentborrowing 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Statutory requirements 

951 

r 1637 

1355 

1637 

1355 

1355 

1355 

r 1355 

1355 

Other working capital requirements 

7 558 

14 569 

13 994 

(6854) 

12498 

12498 

7 292 

11 175 

18756 

Other provisions 










Long term investments committed 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Reserves to be backed by cash/investments 

r 55 

r 555 

6 555 

3022 

6381 

6 381 

3 566 

3 566 

r 3566 

Total Application of cash and investments: 

16 119 

22 290 

23216 

(2195) 

20235 

20 235 

12 213 

16 096 

23677 

Surplus(shortfall) 

5 295 

5 255 

15 002 

9430 

14624 

14 624 

10 201 

1 795 

198 


Explanatory notes to Table A8 - Cash Backed Reserves/Accumulated 
Surplus Reconciliation 

1. The cash backed reserves/accumulated surplus reconciliation is aligned to the requirements 
of MFMA Circular 42 - Funding a Municipal Budget. 

2. In essence the table evaluates the funding levels of the budget by firstly forecasting the cash 
and investments at year end and secondly reconciling the available funding to the 
liabilities/commitments that exist. 

3. The outcome of this exercise would either be a surplus or deficit. A deficit would indicate that 
the applications exceed the cash and investments available and would be indicative of non- 
compliance with the MFMA requirements that the municipality’s budget must be “funded”. 

4. Non-compliance with section 18 of the MFMA is assumed because a shortfall would 
indirectly indicate that the annual budget is not appropriately funded. 

5. From the table it can be seen that for the period 2011/12 to 2014/15 the situation improve 
from R5, 295 million surplus to R14, 624 million surplus. However the forecasted surplus for 
2015/16 shows the surplus is declining. 


20 


Asset Management (Table A9) 


Description 

R thousand 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

CAPITAL EXPENDITURE 










Total New Assets 

40 114 

45 101 

45 693 

33 548 

52 345 

52 345 

38 853 

29 731 

13 214 

Infrastructure - Road transport 

- 

- 

- 

- 

- 

- 

3 800 

16 917 

5 400 

Infrastructure - Electricity 

5 216 

3 672 

2 196 

3 900 

3 900 

3 900 

8 830 

- 

- 

Infrastructure - Water 

4 105 

297 

7 077 

- 

- 

- 

4 026 

- 

- 

Infrastructure - Sanitation 

2 653 

196 

9 962 

- 

- 

- 

6 500 

1 500 

1 500 

Infrastructure - Other 

22 989 

33 113 

16 967 

22 964 

31 229 

31 229 

8 900 

7 314 

6 314 

Infrastructure 

34 964 

37 278 

36 202 

26 864 

35 129 

35129 

32 057 

25 731 

13 214 

Community 

- 

3 258 

5 625 

3 286 

12 319 

12 319 

797 

4 000 

- 

Heritage assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Investment properties 

- 

1 187 

- 

- 

- 

- 

- 

- 

- 

Other assets 

5 150 

3 378 

3 866 

3 398 

4 897 

4 897 

6 000 

- 

- 

Agricultural Assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Biological assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Intangibles 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Renewal of Existinq Assets 

24 784 

43 221 

17 254 

33 999 

32 832 

32 832 

22 120 

22 000 

40 500 

Infrastructure - Road transport 

4 528 

8 296 

5192 

3 263 

4 588 

4 588 

- 

- 

- 

Infrastructure - Electricity 

- 

4 221 

1 843 

2 500 

4 220 

4 220 

2 620 

- 

- 

Infrastructure - Water 

6 626 

8 762 

1 039 

9 242 

5 379 

5 379 

500 

3 000 

- 

Infrastructure - Sanitation 

12918 

20 901 

8 644 

18 604 

17 920 

17 920 

16 000 

19 000 

40 500 

Infrastructure - Other 

- 

347 

- 

- 

- 

- 

3 000 

- 

- 

Infrastructure 

24 071 

42 527 

16 718 

33 609 

32 106 

32106 

22 120 

22 000 

40 500 

Community 

- 

695 

- 

- 

- 

- 

- 

- 

- 

Heritage assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Investment properties 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Other assets 

713 

- 

536 

390 

726 

726 

- 

- 

- 

Agricultural Assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Biological assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Intangibles 

- 

- 


- 

- 

- 

- 

- 

- 

Total Capital Expenditure 










Infrastructure - Road transport 

4 528 

8 296 

5 192 

3 263 

4 588 

4 588 

3 800 

16917 

5 400 

Infrastructure - Electricity 

5 216 

7 893 

4 038 

6 400 

8 120 

8 120 

11 450 

- 

- 

Infrastructure - Water 

10 731 

9 059 

8 116 

9 242 

5 379 

5 379 

4 526 

3 000 

- 

Infrastructure - Sanitation 

15 571 

21 097 

18 607 

18 604 

17 920 

17 920 

22 500 

20 500 

42 000 

Infrastructure - Other 

22 989 

33 460 

16 967 

22 964 

31 229 

31 229 

11 900 

7 314 

6 314 

Infrastructure 

59 035 

79 804 

52 920 

60 473 

67 235 

67 235 

54 177 

47 731 

53 714 

Community 

- 

3 953 

5 625 

3 286 

12 319 

12319 

797 

4 000 

- 

Heritage assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Investment properties 

- 

1 187 

- 

- 

- 

- 

- 

- 

- 

Other assets 

5 863 

3 378 

4 402 

3 788 

5 623 

5 623 

6 000 

- 

- 

Agricultural Assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Biological assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Intangibles 

- 

- 

- 

- 

- 

- 

- 

- 

- 

TOTAL CAPITAL EXPENDITURE - Asset class 

64 898 

88 323 

62 947 

67 547 

85 177 

85 177 

60 973 

51 731 

53 714 

ASSET REGISTER SUMMARY - PPE (WDV) 










Infrastructure - Road transport 

73 769 

79 489 

82 187 

78 056 

83 717 

83 717 

84 459 

99 260 

r 102 417 

Infrastructure - Electricity 

30 471 

37 483 

40 437 

39 323 

47 115 

47 115 

57 123 

56 175 

55 171 

Infrastructure - Water 

96 003 

104 701 

110 349 

116 638 

113 114 

r 113114 

r 115 025 

r 115 869 

r 113 583 

Infrastructure - Sanitation 

79 089 

99 130 

116 637 

135 232 

131 564 

T 131 564 

r 151 071 

r 170 610 

T 211592 

Infrastructure - Other 

36 376 

69 734 

86 293 

313 839 

116418 

r 116418 

' 127 216 

r 134 398 

r 140 573 

Infrastructure 

315 709 

390 537 

435 903 

683 088 

491 927 

r 491 927 

534 893 

576 312 

623 335 

Community 

221 

1 016 

958 

8 806 

13018 

r 13018 

13 554 

17 504 

17451 

Heritage assets 

- 

- 

- 

- 

- 

r 

r 

r 

r 

Investment properties 

204 491 

145 292 

158 513 

124 561 

149 003 

r 149 003 

139 493 

127 389 

114 559 

Other assets 

r 132 629 

r 165 155 

203 832 

149 990 

203 675 

T 203 675 

' 203 894 

r 193 934 

r 183 376 

Agricultural Assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Biological assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Intangibles 

2 126 

1 893 

1 573 

1 573 

1 254 

1 254 

934 

655 

359 

TOTAL ASSET REGISTER SUMMARY - PPE (WDV) 

655 176 

703 893 

800 780 

968 018 

858 876 

858 876 

892 768 

915 793 

939 079 

EXPENDITURE OTHER ITEMS 










Depreciation & asset impairment 

49 320 

98 311 

32 816 

23 081 

27 081 

27 081 

27 081 

28 706 

30 428 

Repairs and Maintenance bv Asset Class 

15 553 

17 849 

18412 

22 906 

23 179 

23179 

26 413 

29 987 

31 787 

Infrastructure - Road transport 

2 397 

3 731 

3 714 

4 855 

5 685 

5 685 

5 323 

5 491 

5 820 

Infrastructure - Electricity 

1 593 

907 

167 

2 700 

980 

980 

2 680 

4 982 

5 281 

Infrastructure - Water 

1 210 

1 659 

1 490 

1 662 

1 733 

1 733 

1 716 

1 819 

1 928 

Infrastructure - Sanitation 

1 280 

1 617 

1 514 

1 946 

2 309 

2 309 

2138 

2 266 

2 402 

Infrastructure - Other 

89 

82 

119 

144 

144 

144 

147 

155 

165 

Infrastructure 

6 568 

7 996 

7 003 

11307 

10 851 

10 851 

12 003 

14 713 

15 596 

Community 

1 096 

764 

737 

900 

950 

950 

1 100 

1 166 

1 236 

Heritage assets 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Investment properties 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Other assets 

7 889 

9 089 

10 672 

10 699 

11 378 

11 378 

13310 

14 108 

14 955 

TOTAL EXPENDITURE OTHER ITEMS 

64 873 

116 160 

51 228 

45 987 

50 260 

50 260 

53 493 

58 693 

62 215 

Renewal of Existing Assets as % of total capex 

38.2% 

48.9% 

27.4% 

50.3% 

38.5% 

38.5% 

36.3% 

42.5% 

75.4% 

Renewal of Existing Assets as % of deprecn" 

50.3% 

44.0% 

52.6% 

147.3% 

121.2% 

121.2% 

81.7% 

76.6% 

133.1% 

R8.M as a %oof PPE 

3.5% 

3.2% 

2.9% 

4.3% 

3.3% 

3.3% 

3.5 % 

3.8% 

3.9% 

Renewal and R&M as a % of PPE 

6.0% 

9.0% 

4.0% 

6.0% 

7.0% 

7.0% 

5.0% 

6.0% 

8.0% 


21 


Explanatory notes to Table A9 - Asset Management 


1. Table A9 provides an overview of municipal capital allocations to building new assets and 
the renewal of existing assets, as well as spending on repairs and maintenance by asset 
class. 


2. National Treasury has recommended that municipalities should allocate at least 40 per cent 
of their capital budget to the renewal of existing assets, and allocations to repairs and 
maintenance should be 8 per cent of PPE. Although this requirement was met in 2014/15 
(50.3% was allocated for the renewal of existing assets), the 2015/16 capital budget 
allocation for renewal of existing assets amounts to 36% which is marginally below the 
National treasury requirement. This is attributable to the fact that the governments grants 
has significantly reduced, narrow rates base, tariff increases for 2015/16 already above 
prescribed norm from National Treasury and the municipality’s decision to keep loans to a 
minimum. The recommendation on repairs and maintenance is not met as the repairs and 
maintenance spend as a percentage of written down value of assets is 3.5%. The reasons 
for the non-compliance to this National Treasury guideline are due to the fact that the tariffs 
are already high. Repairs and maintenance expenditure will also be gradually increased in 
order to achieve the guideline levels of 8% but also to align the spending with the 
municipality’s maintenance plans and with due regard to affordability and other priorities. 


22 



Basic Service Delivery measurement (Table A10 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 


Outcome 

Outcome 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Household service tarqets 











Water: 











Piped water inside dwelling 

16177 

21 572 

23 905 

23 331 

23 331 


23 331 

23 797 

24 273 

24 759 

Piped water inside yard (but not in dwelling) 

- 

- 

- 

- 



- 




Using public tap (at least min.service level) 

4 624 

5 097 

5 097 

5 079 

5 079 


5 079 

5160 

5 242 

5 326 

Other water supply (at least min.service level) 

- 

- 

- 

- 



- 




Minimum Service Level and Above sub-total 

20 801 

26 669 

29 002 

28 410 

28 410 


28410 

28 957 

29 515 

30 085 

Using public tap (< min.service level) 

- 

- 

- 

- 



- 




Other water supply (< min.service level) 

- 

- 

- 

- 



- 




No water supply 

61 

61 

- 

- 



- 




Below Minimum Service Level sub-total 

61 

61 

- 

- 

- 

- 

- 

- 

- 

Total number of households 

20 862 

26 730 

29 002 

28 410 

28 410 


28 410 

28 957 

29 515 

30 085 

Sanitation/sewerage: 











Flush toilet (connected to sewerage) 

24111 

11 694 


23 331 

23 331 

r 

23 331 

23 797 

24 273 

24 759 

Flush toilet (with septic lank) 

5 747 

5 707 


1 229 

1 229 


1 229 

1 229 

1 229 

1 229 

Chemical toilet 

- 

- 


- 



- 




Pit toilet (ventilated) 

- 

- 


- 


r 

- 




Other toilet provisions (> min.service level) 

- 

- 


- 



- 




Minimum Service Level and Above sub-total 

29 858 

17 401 

- 

24 560 

24 560 

r 

24 560 

25 026 

25 502 

25 988 

Bucket toilet 

- 

- 


- 



- 




Other toilet provisions (< min.service level) 

- 

6 514 


- 


r 

- 




No toilet provisions 

475 

475 


- 



- 




Below Minimum Service Level sub-total 

475 

6 989 

- 

- 

- 

- 

- 

- 

- 

Total number of households 

30 333 

24 390 

- 

24 560 

24 560 


24 560 

25 026 

25 502 

25 988 

Energy: 











Electricity (at least min.service level) 

2159 

1 174 

201 

200 

200 


200 

200 

200 

200 

Electricity - prepaid (min.service level) 

3101 

4 864 

6 706 

5 550 

5 550 


5 550 

5 550 

5 550 

5 550 

Minimum Service Level and Above sub-total 

5 260 

6 038 

6 907 

5 750 

5 750 

r 

5 750 

5 750 

5 750 

5 750 

Electricity (< min.service level) 

- 

- 

- 

- 


r 

- 




Electricity - prepaid (< min. service level) 

- 

- 

- 

- 



- 




Other energy sources 

- 

- 

- 

- 



- 




Below Minimum Service Level sub-total 

- 

- 

- 

- 

- 


- 

- 


Total number of households 

5 260 

6 038 

6 907 

5 750 

5 750 


5 750 

5 750 

5 750 

5 750 

Refuse: 











Removed at least once a week 

20 862 

26 669 

29 002 

28 844 

28 844 

28 844 

28 957 

29 515 

30 085 

Minimum Service Level and Above sub-total 

20 862 

26 669 

29 002 

28 844 

28 844 

28 844 

28 957 

29 515 

30 085 

Removed less frequently than once a week 

1 

1 

- 

- 

- 


- 




Using communal retuse dump 

1 

1 

- 

- 

- 


- 




Using own retuse dump 

7 

7 

- 

- 

- 


- 




Other rubbish disposal 

- 

- 

- 

- 

- 


- 




No rubbish disposal 

0 

0 

- 

- 

- 


- 




Below Minimum Service Level sub-total 

9 

9 

- 

- 

- 

- 

- 

- 

- 

Total number of households 

20 871 

26 678 

29 002 

28 844 

28 844 

28 844 

28 957 

29 515 

30 085 

Households receivinq Free Basic Service 










Water (6 kilolitres per household per month) 

5 466 

6011 


5 779 

5 779 


5 779 

7 589 

7 589 

7 589 

Sanitation (free minimum level service) 

3173 

5 862 


5 687 

5 687 


5 687 

5 687 

5 687 

5 687 

Electricity/other energy (50kwh per household per mon 

5 327 

2 070 


5 475 

5 475 


5 475 

5 475 

5 475 

5 475 

Reluse (removed at least once a week) 

5 464 

6 024 


5 783 

5 783 


5 783 

6 539 

6 539 

6 539 











Cost of Free Basic Services provided (R'000) 







_ 




Water (6 kilolitres per household per monlh) 

1 472 

2 295 


6 918 

6 918 


6 918 

9 977 

10 576 

11 211 

Sanitation (free sanitation service) 

3 004 

3 538 


5 651 

5 651 


5 651 

7 632 

8 090 

8 576 

Electricity/other energy (50kwh per household per mon 

2 343 

2 942 


2 488 

2 488 


2 488 

5 439 

5 766 

6112 

Refuse (removed once a week) 

2 806 

4 730 


7 407 

7 407 


7 407 

9717 

10 300 

10918 

Total cost of FBS provided (minimum social packag 

9 625 

13 505 

- 

22 463 

22 463 

22 463 

32 766 

34 732 

36 816 

Hiqhest level of free service provided 










Property rates (R value threshold) 

50 000 

100 000 


100 000 

100 000 

V 

100 000 

100 000 

100 000 

100 000 

Water (kilolitres per household per month) 

6 

6 


6 

6 

r 

6 

6 

6 

6 

Sanitation (kilolitres per household per month) 

- 

- 


6 

6 


6 

- 

- 

- 

Sanitation (Rand per household per month) 

77 

86 





- 

112 

119 

126 

Electricity (kwh per household per month) 

60 

70 


70 

70 


70 

70 

70 

70 

Reluse (average litres per week) 

240 

240 


240 

240 


240 

240 

240 

240 

Revenue cost of free services provided (R'000) 










Property rates (R15 000 threshold rebate) 

952 

339 


882 

882 

V 

882 

1 512 

1 602 

1 698 

Property rates (other exemptions, reductions and 
rebates) 








2 645 

2 804 

2 972 

Water 

2 204 

2 295 


6 918 

6 918 


6 918 

9 977 

10 576 

11 211 

Sanitation 

3 304 

3 538 


5 651 

5 651 

r 

5 651 

7 632 

8 090 

8 576 

Electricity /other energy 

972 

2 942 


2 488 

2 488 


2 488 

5 439 

5 766 

6112 

Reluse 

4 203 

4 730 


7 407 

7 407 


7 407 

9717 

10 300 

10918 

Municipal Housing - rental rebates 

1 149 

1 047 


1 330 

1 330 

r 

1 330 

- 

- 

- 

Housing - top structure subsidies 

- 

- 





- 

- 

- 

- 

Other 

1 642 

1 830 


2 825 

2 825 


2 825 

- 

- 

- 

Total revenue cost of free services provided (total 
social package) 

14 426 

16 721 

. 

27 500 

27 500 

27 500 

36 922 

39138 

41 486 


23 


Explanatory notes to Table A10 - Basic Service Delivery Measurement 

1. Table A10 provides an overview of service delivery levels, including backlogs (below 
minimum service level), for each of the main services. 

2. The Municipality continues to make good progress with the eradication of backlogs: 

a. Water services 

b. Sanitation services 

c. Electricity services 

d. Refuse services 


3. The Threshold to receive FBE in Theewaterskloof is two times the state old age pension. 
This threshold was decided on after taking into account the socio-economic and other 
conditions presently prevalent in the Theewaterskloof Municipal area. The methodology 
behind this threshold is viewed to be one that is practical, fair, equitable, and justifiable and 
it does not alienate any group of households. The old age pension is viewed as a relatively 
accurate measurement of poverty and affordability of municipal services. Decreasing the 
threshold will in any event result in an escalation of bad debt. 

4. The budget provides for + 1-7 590 households to be registered as indigent in 2015/16, and 
therefore entitled to receiving Free Basic Services. The number is set to increase given the 
rapid rate of in-migration to the Municipality, especially by poor people seeking economic 
opportunities and housing. 

5. It is anticipated that these Free Basic Services will cost the municipality R36, 922 million in 
2015/16, increasing to R41, 486 million in 2017/18. This is covered by the municipality’s 
equitable share allocation from national government. 

6. This need to be seen within the context of the municipality’s overall revenue management 
strategy - the more the municipality gives away, the less there is available to fund other 
services. Currently, the ‘free services’ represent about 6 per cent of total operating 
revenue. 


24 



6. Overview of Annual Budget Process 


Planning Process used to prepare the Annual Budget 

In terms of Section 16 of the MFMA, the Mayor must, at least 90 days before the start of the 
financial year, table the annual budget at a council meeting. Section 53 requires the Mayor of a 
municipality to provide general political guidance over the budget process and the 
priorities that must guide the preparation of the budget. In addition, Chapter 2 of 
the Municipal Budget and Reporting Regulations, gazetted on 17 April 2009, states that the 
Mayor of a municipality must establish a Budget Steering Committee to provide technical 
assistance to the Mayor in discharging the responsibilities set out in section 53 of the Act. 

Budget guidelines were developed by the Budget and Treasury Office and submitted and 
approved by the Budget Steering Committee. Various Budget Steering Committee meetings 
where held where the budget was discussed. These meetings were held as follows: 

■ 22 October 2014; 

■ 6 November 2014; 

■ 12 December 2014; 

■ 26 February 2015; and 

■ 2 March 2015. 

A time schedule outlining important dates and deadlines as prescribed for the IDP/Budget 
process, Section 21 (1) (b) was approved by councilon 31 July 2014. The budget process for 
the 2015/2016 MTREF period started and will proceed according to the following timeline: 


Phase 

Activ ity 

Date 

Planning 

Tabling of Draft IDP/Budget Process Plan 
for Council approval 

31 July 2014 


Strategic Workshop with councillors and 

11-12 September 


Management. 

2014 


Ward committees and Town advisory 


Public Participation 

forums together with town manager to 
conduct ward/town analysis and prioritize 
and draft Ward/town IDP’s incorporating 
strategic planning outcomes. 

Ol - 09 October 

2014 



Town Mangers and Ward Committees 
present outcomes of Draft IDP to the 
communities. 

13 - 30 October 

2014 

Prioritization 

Town Mangers and Ward committees 
reprioritize ward IDP’s incorporating 

publics input. 

27 October - 

3 November 2014 


Prioritization-Council IDP workshop 

11 November 2014 


Budget workshop- aligning IDP with 

Budget 

24 February 2015 

Alignment 

IDP indaba 

16 February 2015 


Table Draft IDP and Capital and 


T abling 

Operating Budgets at Council in terms of 
Section 16(2) of the MFMA 

26 March 2015 


Advertise draft IDP and Budget for public 
input 

Ol - 29 April 201 5 


Report Back to ward committees/TAF 


Public Participation 

regarding draft IDP and Capital and 
Operating Budget. 

06 - 21 April 201 5 

Adoption 

Approval of IDP and Budget by Council 

28 May 2015 

Finalizing 

Advertise Approved budget, IDP and 

T ariffs. 

02 - 26 June 2014 


25 



Budget Cycle 


Intnnratmf 

I j i v ! I ■. I : : n i 1 1 1 

Plan 

<ipp( 


Draft a u dLji-: 




Ihi-^T ?ai 
Kl-ijuiIiiih I 
■Performance 

MnnnClvmDnl 

AFS r Annual 
Rfcpart 


l- 1 r i 1 ! ! I : . I J I I r - 1 



S^rvir-T IT3-»]|v-nry 
£ t 'jijgti 

impinmc-ntHtiDn 
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I 5 DBIF) 



The process started with the approval of a Time Schedule, ten months before the start of the 
new financial year in accordance with section 21(1 )(b) of the MFMA. The key deadlines for the 
process to review the I DP, Budget Related Policies and prepare, table and approve the Annual 
Budget were approved by Council on 31 July 2014. The key deadlines outlined included the 
deadline for the consultative process as referred to in Chapter 4 of the MSA. 

The next step in the Budget Process was Strategizing. A Strategic Planning Workshop of 
Councillors and Senior Management were conducted on 11 - 12 September 2014to decide on 
the Strategic direction of the Council which inform the IDP. 

The IDP was then reviewed through processes, mechanisms, and procedures that allow the 
local community to participate and be consulted on its Development needs and priorities. The 
Public Participation meetings were held during October 2014and facilitated by TWK officials, in 
order to include in the Integrated Development Plan. The purpose of the consultations was to 
engage and agree with community stakeholders on community needs, setting uniform, realistic, 
reasonable, and affordable service levels and appropriate tariffs for the delivery of municipal 
services to the communities. 

After the Strategizing Phase and Compiling of the IDP a Operating Budget and Capital Budget 
was prepared, informed and reconciled with the IDP and reflect the Developmental Needs of the 
Community. On the 22 January 2015 the Council considered the 2014/2015 Mid-year Review 
and Adjustment Budget. 

In preparing the budget the following were taken into account: 

• The Integrated Development Plan (IDP) 

• Revenue and Expenditure Projections for future financial years 

• The (Draft) National and Provincial Strategic Objectives 

• Division of Revenue Act (DORA) 

• Realistically Anticipated Revenue 

• Affordability and sustainability of Tariffs 

• Level of Service and Cost-Recovery 


26 


On 10 March 2015 a Council Budget Workshop was held to discuss the Budget and afterwards 
feedback was given to certain departments to revise their budget accordingly. 


> The draft budget was tabled in Council on 26 March 2015. 

> Public Consultation was held during April 2015. 

> The draft budget was advertised for comments till 29 April 2015. 

> The Provincial LG MTEC deliberations were held 28 April 2015. 

> The final operational and capital reviews, tariff reviews, policy reviews and a review of 
comments were held during April/May 2015 for the final compilation and completion of 
the 2015/16 budget. 


IDP and Service Delivery and Budget Implementation Plan 

The Municipality’s IDP is its principal strategic planning instrument, which directly guides and 
informs its planning, budget, management and development actions. This framework is rolled 
out into objectives, key performance indicators and targets for implementation which directly 
inform the Service Delivery and Budget Implementation Plan. The Strategic Plan included the 
following key IDP goals: 

• Financial Sustainability 

• Good Governance and Clean Audit 

• Institutional Capacity Development 

• Basic Service Delivery and Infrastructure 

• Local Economic Development and Social Upliftment 

• Sustainable Housing Programme 

• Environmental Sustainability 


The IDP has been taken into a business and financial planning process leading up to the 
2015/16 MTREF, based on the approved 2014/15 MTREF, Mid-year Review and adjustments 
budget. The business planning process has subsequently been refined in the light of current 
economic circumstances and the resulting revenue projections. Business planning links back to 
priority needs and master planning, and essentially informed the detail operating budget 
appropriations and three-year capital programme. 


27 



7. Overview of Alignment of Annual Budget with IDP 


An IDP should be utilised as a method to plan for future developments in the areas and to find 
the best solutions to achieve long-term development goals. A municipal IDP provides a five 
year strategic programme of action aimed at setting short, medium and long term strategic and 
budget priorities to create a development platform, which correlates with the term of office of the 
political incumbents. The plan aligns the resources and the capacity of a municipality to its 
overall development aims and guides the municipal budget. An IDP is therefore a key 
instrument which municipalities use to provide vision, leadership and direction to all those that 
have a role to play in the development of a municipal area. The IDP enables municipalities to 
make the best use of scarce resources and speed up service delivery. It is important that the 
IDP developed by municipalities correlate with National and Provincial intent. 

The aim of this revision cycle was to develop and coordinate a coherent plan to improve the 
quality of life for all the people living in the area, also reflecting issues of national and provincial 
importance. One of the key objectives is therefore to ensure that there exists alignment 
between national and provincial priorities, policies and strategies 


It is considered that a well-run budget process that incorporates the IDP will facilitate community 
input, encourage discussion, promote a better understanding of community needs, provide an 
opportunity for feedback, and improve accountability, transparency, and responsiveness to the 
needs of the local communities. 

Vision of Theewaterskloof Municipality 

To ensure and preserve the heritage and natural resources within the region, create and 
develop a safe, healthy, crime free, economically stable and viable environment for all. 

Mission of Theewaterskloof Municipality 

“To provide, develop and promote equal opportunities for everyone to stay in a safe, healthy, 
crime free, economically stable and viable environment through transparent and effective 
governance, politically stable, planning, services and the efficient and effective utilisation of 
resources" 

STRATEGIC FOCUS AREAS (SFA) 

The Constitution requires local government to relate its management, budgeting and planning 
functions to its objectives. This gives a clear indication of the intended purposes of municipal 
integrated development planning. The municipality opted to focus on five strategic areas which 
would result in it overcoming its challenges and achieving its vision. 


SFA 1: FINANCIAL VIABILITY 


Strategic Goal 

Improved Financial Sustainability of the Municipality 

Municipal Strategic Focus 
areas 

Financial Viability 

Strategic Objective 

SOI: Improved Sustainable Financial Management of the Theewaterskloof Municipality and 

Execute Legislative requirements 

Challenges 

Low income base (high unrecoverable debt) 

Reliant on grants (due to high unemployment rate and large indigent population) 


Global Economic recession This has resulted in an increase in unemployment, greater dependence on 
grants and subsidies and escalating prices of commodities) 


The cost of compliance with increased legislation, regulations and accounting standards is not only 
costing more without any significant tangible benefits to the communities, it is also time-consuming 
and counter-productive. 


28 


Outcome / Impact 

Financial Sustainability and improved audit opinion 

Strategic Risks 


Municipal Directorate 

Financial Services 

Departmental Objectives 

Work towards obtaining a clean audit 

Vigorous driving and management of projects of the financial sustainability steering committee 

Review Tariff structure 

Improved functioning and results of the Revenue Section/improve the collection rate 

Improved Financial Management 

Municipal Directorate 

Corporate Services 

Departmental Objectives 

Improved Financial Management 


Alignment with National 
and Provincial Strategies 


Sphere 

Description 

National KPA 

Municipal Financial Viability and Management 

National Outcome 

A responsive and accountable, effective and efficient local government system 

National Development 

Plan (2030) 

Developing a capable and Development State 

Provincial Strategic 
Objective 

Mainstreaming sustainability and optimising resource-use efficiency 

District Strategic 

Objective 

To attain and maintain financial viability and sustainability by executing accounting services in 
accordance with National Policy and guidance 


Main Functions and 
Sector Plans associated 
with this SO 


Municipal Functions 

Other spheres Specific Plans 

Good systems, 
compliance, revenue 
optimisation, financial 
sustainability planning 

National Budgets and 3 yr. plans; SDBIP 

Treasury and 

Provincial 

Treasury; 
ensuring clean 
audit 


SFA 2: GOOD GOVERNANCE 

Strategic Goal Good Governance and Clean Audit 

Municipal Strategic Focus Good Governance 
areas 


Strategic Objective 

SO 2: Good Governance and Improve the auditing status of the Municipality 

Challenges 

The cost of compliance with increased legislation, regulations and accounting standards is not only 
costing more without any significant tangible benefits to the communities, it is also time-consuming 
and counter-productive. 

Outcome / Impact 

Clean audit 

Improved relationships 

Improved communication 

Improved community engagements 

Strategic Risks 


Municipal Directorate 

Corporate Services 

Departmental Objectives 

Improve the functioning of the ward committee system 

Municipal Directorate 

Office of the MM 

Departmental Objectives 

Work towards obtaining a clean audit 

Improved relationships 


29 


Improved Communication and community involvement 


Alignment with National and Provincial Strategies 


Sphere 

Description 

National KPA 

Good Governance and Public Participation 

National Outcome 

A responsive and accountable, effective and efficient local government system 

National Development 

Plan (2030) 

Developing a capable and Development State 

Provincial Strategic 
Objective 

Not applicable 

District Strategic 

Objective 

To ensure Good Governance practice by providing a democratic and proactive accountable 
government and ensuring community participation through existing IDP structures 


Main Functions and Sector Plans associated with this SO 


Municipal Functions 

Other spheres Specific Plans 

Council, public and 
stakeholder 
participation, ward 
Committees, policies, 
bylaws 

legislative framework and support 


SFA 3: INSTITUTIONAL DEVELOPMENT 

Strategic Goal Optimisation of Capacity 

Municipal Strategic Focus Institutional Development 


areas 


Strategic Objective 

SO 3: Refine and improve the institutional capacity of the municipality 

Challenges 

Lack of succession planning 

Trained workforce (water, sanitation, road works etc) 

Inadequate systems and SOP's 

Lack/shortage of Man power 

Lack of office space 

Shortage of Fleet (Traffic, refuse removal etc.) 

Poor payment rate 

Outcome / Impact 

Improved safety in working environment 

Clean audit 

Improved processes and productivity 

Improved IT systems 

Improved municipal capacity 

Improved legal compliance 

Improved processes and productivity 

Strategic Risks 


Municipal Directorate 

Corporate Services 

Departmental Objectives 

Launch a productivity improvement plan based on the outcome of a productivity assessment 

Improved IT service and infrastructure 

Implement outcome based training strategies and programmes 

Continuous review of policies and delegations and by-laws 

Conduct a productivity assessment 

Municipal Directorate 

Office of the MM 

Departmental Objectives 

Optimum 30ptimizing30 of PMS to ensure continuous performance improvement working towards a 
clean performance audit 


Alignment with National 
and Provincial Strategies 


Sphere 

Description 

National KPA 

Municipal Transformation and Institutional Development 


30 


National Outcome 


A responsive and accountable, effective and efficient local government system 


National Development Developing a capable and Development State 

Plan (2030) 


Provincial Strategic 
Objective 

Mainstreaming sustainability and 31ptimizing resource-use efficiency 

District Strategic 

Objective 

To ensure municipal transformation and institutional development by creating a staff structure that 
would adhere to the principles of employment equity and promote skills development. 

Main Functions and 

Sector Plans associated 
with this SO 

Municipal Functions 

Other 

spheres 

Specific Plans 

Organisational 
Development, Systems 


Operational plan, Performance Management System 

SFA 4: BASIC SERVICE DELIVERY 

Strategic Goal 

Improve Service Levels 

Municipal Strategic Focus 
areas 

Basic Service Delivery 

Strategic Objective 

SO 4: Infrastructure and bulk upgrades, replacements and expansions in order to address 
infrastructure and bulk services backlogs, make provision for developmental strategies and improve 
sustainability in the process 

Challenges 

• Budget (poor payment rate) 

• Shortage of Fleet (Traffic, refuse removal etc.) 

• Lack/shortage of Man power 

Outcome / Impact 

• Provide residents with adequate basic services 

• Conserve and rehabilitate the natural environment 

• Mitigate the risk of potential disasters 

• Sustainable water provision 

• Increased safety 

• Backlog reduction 

• Maintained community facilities 

• Maintained fleet 

• Improved electricity provision 

• Increased cemetery capacity 

• Rehabilitation and maintenance of urban streets 

• Improved sewerage provision 

• Improved and sustainable solid waste management 

• Increased capacity for sustainable sewerage network 

• Improved stormwater network 

• Increased revenue collection 

Strategic Risks 


Municipal Directorate 

Technical Services 

Departmental Objectives 

• Mitigate the risk of potential disasters 

• Manage the municipality's natural resources (Reserves, public open spaces, waterways) 

• Implementation of three year infrastructure and basic services upgrade, expansion and 
replacement program linked to the MIG Program, Capital Reserve Development Program and 
development contribution program 

• Conserve the natural environment and improve the quality of our living environment 

Municipal Directorate 

Operational Services 

Departmental Objectives 

• Day to Day Service Delivery 

• Infrastructure and bulk upgrades 

Alignment with National and Provincial Strategies 

Sphere 

Description 

National KPA 

Basic Service Delivery 

National Outcome 

• An effective, competitive and responsive economic infrastructure network 

• Protection and enhancement of environmental assets and natural resources 


31 


National Development 

Plan (2030) 

• Nation building and social cohesion 

• Environmental Sustainability and Resilience 

• Economy and Development 

Provincial Strategic 
Objective 

Mainstreaming sustainability and optimising resource-use efficiency 

District Strategic 

Objective 

To ensure the Health and safety of all in the Overberg District through the provision of efficient basic 
services and infrastructure ito disaster management, municipal health and environmental 
management 


Main Functions and Sector Plans associated with this SO 


Municipal Functions 

Other spheres Specific Plans 

Water, sanitation, roads, 
transport infrastructure, 
storm water, waste 
removal, parks, 
recreation. Forward 
Planning and integration 
with Human Settlements 

MIG funds and other external Master plans; MIG project plans, Water Services Plans, 

funding, DWA initiatives 

Strategic Goal 

Improve Service Levels 


Municipal Strategic Focus Basic Service Delivery 
areas 


Strategic Objective 

SO 6:Increased community safety through traffic policing, bylaw enforcement and disaster 
management 

Challenges 

• Shortage of Fleet (Traffic) 

• Lack/shortage of Man power 

• Lack of updated by-laws 

Outcome / Impact 

• Increased community safety 

• Improved environmental management 

Strategic Risks 


Municipal Directorate 

Development Services 

Departmental Objectives 

• Implementation of Town Renewal Strategies by using mechanisms such as Special Rates Areas 

• Implementation of Law Enforcement Strategy 


Alignment with National 
and Provincial Strategies 


Sphere 

Description 

National KPA 

• Basic Service Delivery 

National Outcome 

• All people in south Africa protected and feel safe 

National Development 

Plan (2030) 

• Building Safer Communities 

Provincial Strategic 
Objective 

• Increasing safety 


Main Functions and 
Sector Plans associated 
with this SO 


Municipal Functions 

Other spheres 


Planning and Functioning Planning support (DEADP) and Compliance e.g. NEMA 

of Settlements and 
Conservation, Traffic 


Strategic Goal Improve Service Levels 

Municipal Strategic Focus Basic Service Delivery 
areas 


management 


32 


Challenges 

• Shortage of Fleet (Traffic) 

• Lack/shortage of Man power 

• Lack of updated by-laws 

Outcome / Impact 

• Increased community safety 

• Improved environmental management 

Strategic Risks 


Municipal Directorate 

Development Services 

Departmental Objectives 

• Implementation of Town Renewal Strategies by using mechanisms such as Special Rates Areas 

• Implementation of Law Enforcement Strategy 


Alignment with National 
and Provincial Strategies 


Sphere 

Description 

National KPA 

• Basic Service Delivery 

National Outcome 

• All people in south Africa protected and feel safe 

National Development 

Plan (2030) 

• Building Safer Communities 

Provincial Strategic 
Objective 

• Increasing safety 


Main Functions and 
Sector Plans associated 
with this SO 


Planning and Functioning Planning support Law Enforcement Strategy, SDF 

of Settlements and (DEADP) and Compliance 


Conservation, Traffic 

e.g. NEMA 

Strategic Goal 

Improve Service Levels 


Municipal Strategic Focus Basic Service Delivery 
areas 


Strategic Objective 

SO 7:To develop integrated and sustainable human settlements that will address the housing 
demand within the Theewaterskloof Area 

Challenges 

Influx of indigent people 

Increased demand or housing 

Land availability 

Funding 

Outcome / Impact 

Sustainable human settlements 

Strategic Risks 


Municipal Directorate 

Development Services 

Departmental Objectives 

The establishment of sustainable rural settlements in the villages of Klein begins, Nuweberg and 
Lebanon in following the Comprehensive Rural Development Process. 

Provision of GAP housing 

Provision of economic and social facilities 

Ensure unbiased allocation of housing opportunities 

Acquire land for planned integrated Fluman Settlements 

Implementation of the Fluman Settlements Program which includes programs such as IRDP, EFHP & 
EPHP) & Provision and Implementation of serviced sites 


Alignment with National 
and Provincial Strategies 


Sphere 

Description 

National KPA 

Basic Service Delivery 

National Outcome 

Sustainable human settlements and improved quality of household life 

National Development 

Plan (2030) 

Transforming Fluman Settlements 

Provincial Strategic 

Developing integrated and sustainable human settlements 


33 


Objective 


District Strategic 

Objective 

To ensure the Health and safety of all in the Overberg District through the provision of efficient basic 
services and infrastructure ito disaster management, municipal health and environmental 
management 


Main Functions and 
Sector Plans associated 
with this SO 


Municipal Functions 

Other Specific Plans 

spheres 

planning and 
implementing housing 
projects with govt funds, 
GAP housing, managing 
emerging settlements 

DHS, Human Human Settlement Plan & Housing Pipeline 

Settlement 

Projects 


SFA 5: LOCAL ECONOMIC DEVELOPMENT 
Strategic Goal 

Municipal Strategic Focus Local Economic Development 
areas 


Strategic Objective 

SO 8: Creating and enabling environment favorable for economic and human development in a 

sustainable manner 

Challenges 

High level of unemployment' 

Lack of interest of local labour in working in the Agricultural sector 

Poor quality of education 

Not enough housing stock in the area to attract paying residents 

High level of imports into the municipal area increasing costs. 

High level of substance abuse among youth 

Outcome / Impact 

Improved economic growth 

Improved social conditions 

Strategic Risks 


Municipal Directorate 

Development Services 

Departmental Objectives 

Replication of the methodology used to successfully attract private sector investment to 

Elgin/Grabouw to at least one other area in the Theewaterskloof jurisdiction 

Implement the Youth Development Strategy in line with National programs such as EPWP, CWP and 
the youth entrepreneurial project 

Facilitate the establishment of partnerships that will result in the improved social conditions of certain 
communities (vulnerable groups) 

Establish an investor and developer institutional friendly environment within the Municipality 
Contracting and Implementation of the Grabouw Investment Initiative 


Alignment with National and Provincial Strategies 


Sphere 

Description 

National KPA 

Local Economic Development 

National Outcome 

Decent employment through inclusive economic growth 

National Development 

Plan (2030) 

Economy and Development 

Provincial Strategic 
Objective 

Creating opportunities for growth and jobs 

District Strategic 
objective 

To promote local economic development by supporting initiatives in the District for the Development 
of a sustainable district economy 


Main Functions and 
Sector Plans associated 
with this SO 


Municipal Functions 

Other spheres Specific Plans 

Creating Framework for 
Growth, Job Creation, 
Tourism, Specific 

Projects, PPPs, Town 

DEADP, DoEDT SDF, LED strategy 

Thusong initiative, Youth Development Strategy. EPWP Strategy, 2030 Strategy, 2030 

CDWs, DECAS, DoE, Projections, Green Economy, Tourism sector plan, Destination Marketing Plan 

DoSD, Rural 


34 


Planning 

Health and Safety,, 
everything to do with 
soft services and 
recreation, human 
development, education 
and training 


Development 


In line with the MSA, the I DP constitutes a single, inclusive strategic plan for the municipality. 
The five-year programme responds to the development challenges and opportunities faced by 
the municipality by identifying the key performance areas to achieve the five strategic objectives 
mentioned above. 

The 2015/16 MTREF has therefore been directly informed by the IDP revision process and the 
following tables provide a reconciliation between the IDP strategic objectives and operating 
revenue, operating expenditure and capital expenditure. 


35 


Reconciliation 


jetween the I DP strategic objectives and budgeted revenue (Table SA4) 


Strategic Objective 


Goal 


R thousand 


2011/12 


Audited 

Outcome 


2012/13 


Audited 

Outcome 


2013/14 


Audited 

Outcome 


Current Year 2014/15 


Original 

Budget 


Adjusted 

Budget 


Full Year 
Forecast 


2015/16 Medium Term Revenue & Expenditure 
Framework 


Budget Year 
2015/16 


Budget Year 
+1 2016/17 


Budget Year 
+2 2017/18 


nsftuional Development 

Financial Viability 

Local Economic Development 

Good Governance 

Basic Service Delivery 


Human Development 


Reine and Improve the institutional 
Capacity ofthe municipality 

Improved Sustainability Financial 
Management of the 
Theewaterskloof Municipality and 
execute Legislative requirements 
Creaing an enabling environment 
favourable for economic and 
human development in a 
sustainable manner. 

Good Governance an Improve the 
auditing status ofthe Municipality 

Infrastructure and Bulk Upgrades 
and replacements and expansions 
n order to address infrastructure 
and bulk services backlogs, make 
provision br developmental 
strategies and improve 
sustainablify in the process 
Improved Environmental 
Management 

Increase community safety through 
trade policing, bylaw enforcement 
and disaster management 
To develop integrated and 
sustainable Human selements that 
will address the housing demand 
with in fie TWK area 


' 88384 


5666 


f 3565 


F 205718 


625 


101 616 


7906 


6361 


261 771 


232 


118607 r 119208 


7676 


16648 


5520 r 7162 


307218 r 268438 


769 


121 002 


7971 


6625 


317984 


769 


1645 


121 002 r 132522 


7971 


8269 


6625 r 1017 


1743 


r 137372 


8764 


r 1094 


317984 r 322752 r 329926 


r 149331 


9291 


r 1176 


r 347 243 


6230 


Allocations to other priorities 


Total Revenue (excluding capital transfers and contributions) 


303 973 


378 278 


439 252 


418 577 


454351 


454351 


466204 


478 899 


508 889 


36 


Reconciliation between the I DP strategic objectives and budgeted operating expenditure 
Table SA5) 


Strategic Objective 


R thousand 


Goal 


2011/12 


Audited 

Outcome 


2012/13 


Audited 

Outcome 


2013/14 


Audited 

Outcome 


Current Year 2014/15 


Original 

Budget 


Adjusted 

Budget 


Full Year 
Forecast 


2015/16 Medium Term Revenue & Expenditure 
Framework 


Budget Year 
2015/16 


Budget Year 
+1 2016/17 


Budget Year 
+2 2017/18 


nsftufonal Development 


Financial Viability 


Local Economic Development 


Good Governance 


Basic Service Delivery 


Human Development 


Refne and Improve tie institutional 
Capacity ofthe municipality 

Improved Sustainability Financial 
Management of the 
Theewaterskloof Municipality and 
execute Legislative requirements 
Creating an enabling environment 
fevourable for economic and 
human development in a 
sustainable manner. 

Good Governance an Improve the 
auditing status ofthe Municipality 

Intrastructure and Bulk Upgrades 
and replacements and expansions 
in order to address infrastructure 
and bulk services backlogs, make 
provision br developmental 
strategies and improve 
sustainablify in the process 
Improved Environmental 
Management 

Increase community safety through 
trade policing, bylaw enforcement 
and disaster management 
To develop integrated and 
sustainable Human selements that 
will address the housing demand 
with in tie TWK area 


9671 


27141 


18290 


r 35750 


r 230467 


8929 


27118 


20490 


31 231 


275980 


10631 


30387 


21760 


38979 


27374 


38598 r 55460 


279258 r 235341 


12049 


34429 


24472 


45978 


293767 


12 049 


34429 


24 472 


14534 


37711 


26903 


14954 


41112 


28930 


15983 


46048 


31 228 


45978 r 45136 


293767 r 325048 


r 48296 


r 333454 


r 51 684 


r 346 883 


13548 


Allocations to other priorities 


Total Expenditure 


321 319 


363748 


380 634 


371 591 


410694 


410 694 


449 331 


466746 


491 826 


37 


8. Measurable performance objectives and Indicators 


Performance Management is a system intended to manage and monitor service delivery 
progress against the identified strategic objectives and priorities. The Municipality target, 
monitors, assesses and reviews organisational performance which in turn is directly linked to 
individual employee’s performance. 

Performance information needs to be structured to demonstrate clearly how the municipality 
uses available resources to deliver on its strategic objectives. 

In managing for results, budgets are developed in relation to inputs, activities and outputs, while 
the aim is to manage towards achieving the outcomes and impacts. The image below illustrates 
the relationship between these core performance information concepts. 



Economy indicators: explore whether specific inputs are acquired at the lowest cost and at the 

right time. 

Efficiency indicators: explore how productively inputs are translated into outputs. An efficient 

operation maximises the level of output for a given set of inputs, or it 
minimises the inputs required to produce a given level of output. 

Effectiveness indicators: explore the extent to which the outputs of an institution achieve the 

desired outcomes. An effectiveness indicator assumes a model of how 
inputs and outputs relate to the achievement of an institution's 
strategic objectives and goals. 

Equity indicators: explore whether services are being provided impartially, fairly and equitably. 

Equity indicators reflect the extent to which an institution has achieved and 
been able to maintain an equitable supply of comparable outputs across 
demographic groups, regions, urban and rural areas, and so on. 


38 


The following table sets out the municipalities main performance objectives and benchmarks for 
the 2015/16 MTREF. 


<ey financial indicators and ratios (table SA8) 


Description of financial indicator 

Basis of calculation 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & 
Expenditure Framewcrk 



Audited 

Audited 

Audited 

Original 

Adjusted 

Full Year 

Budget Year 

Budget Year 

Budget Year 



Outcome 

Outcome 

Outcome 

Budget 

Budget 

Fcrecast 

2015/16 

+1 2016/17 

+22017/18 

Borrowinq Manaqement 






















Credit Rating 


N/A 

N/A 

BBB+ 

BBB+ 

BBB+ 

T BBB+ 




Capital Charges to Operalng Expenditure 

Interest & Principal Paid /Operating 

Expenditure 

6.4% 

5.3% 

5.1% 

5.5% 

4.8% 

4.8% 

4.6% 

4.9% 

4.8% 

Capital Charges to Own Revenue 

Finance charges S Repayment of borrowing 
/Own Revenue 

10.6% 

8.3% 

6.9% 

7.9% 

7.3% 

7.3% 

7.0% 

7.3% 

6.9% 

Borrowed iinding of'own' capital expenditure 

Borrowing/Capital expenditure excl. transfers 
and grants and coniribuions 

95.1% 

0.1% 

69.8% 

44.2% 

25.7% 

25.7% 

51.7% 

0.0% 

25.6% 

Safety of Capital 











Gearing 

Long Term Borrowing/ Funds & Reserves 

982.3% 

254.0% 

125.3% 

233.4% 

130.2% 

130.2% 

138.3% 

128.5% 

121.4% 

Liquidity 











Current Ratio 

Current assets/current liabilities 

0.8 

0.9 

1.1 

0.9 

1.0 

1.0 

0.9 

0.7 

0.7 

Current Ratio adjusted fer aged debtors 

Current assets less debtors > 90 days/current 
liabilities 

0.8 

0.9 

(0.4) 

(1.1) 

(0.9) 

(0.9) 

(0.8) 

(1.3) 

(1.6) 

Liquidity Rafo 

Revenue Manaqement 

Monetary Assets/Current Liabilities 

0.4 

0.4 

0.6 

0.1 

0.6 

0.6 

0.3 

0.3 

0.3 

Annual Debtors Collection Rate (Payment Level %) 

Last 12 Mlhs Receipts/Last 12 Mths Billing 


80.1% 

71.9% 

71.2% 

88.5% 

86.9% 

0.0% 

83.7% 

88.9% 

Current Debtors Collection Rate (Cash receipts % 
of Rale payer & Other revenue) 


80.1% 

71.9% 

71.0% 

88.5% 

86.9% 

86.9% 

83.7% 

88.9% 

89.2% 

Outstanding Debtors to Revenue 

Total Outstanding Debtors to Annual Revenue 

8.0% 

11.4% 

9.2% 

12.3% 

6.9% 

6.9% 

8.5% 

6.9% 

5.1% 

Longstanding Debtors Recovered 

Debtors > 12 Mlhs Recovered/Total Debbrs > 

12 Months Old 










Creditors Manaqement 











Creditors System Efficiency 

% ofCreditors Paid Wlhin Terms 
(wilin' MFMA's 65(e)) 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

Creditors b Cash and Investments 


109.5% 

144.0% 

103.1% 

451.9% 

103.1% 

103.1% 

167.9% 

212.4% 

167.3% 

Other Indicators 












Total Volume Losses (kW) 






r 






3483001 

3092625 

2444 153 

2703399 

2703399 

2 703399 

2870922 

2928340 

2966907 


Total Cost of Losses (Rand '000) 

r 

W 




r 




Electricity Distribution Losses (2) 

% Volume (units purchased and generated 
less units sold)/units purchased and generated 

1 999243 

w 

2013299 

r 

1 402944 

w 

1 997001 

1 997001 

1 997001 

f 

2417654 

2 707 772 

2978549 



5.75% 

5.27% 

4.01% 

4.53% 

4.53% 

4.53 % 

4.70% 

5.00% 

6.00% 


Total Volume Losses (k() 






r 






220646 

672530 

1 071 916 

747257 

747257 

747257 

648902 

610 360 

589560 


Total Cost of Losses (Rand '000) 

r 

r 




r 




Water Distribution Losses (2) 

% Volume (units purchased and generated 
less units sold)/units purchased and generated 

1 423 167 

r 

4405072 

f 

9700840 

w 

5454972 

5454972 

5454972 

f 

5210683 

5391 309 

5 728 341 



5.64% 

15.06% 

22.32% 

15.00% 

15.00% 

15.00% 

15.00% 

15.00% 

15.00% 

Employee costs 

Employee costs/(T otal Revenue - capital 
revenue) 

43.9% 

36.0% 

31.9% 

38.4% 

35.9% 

35.9% 

36.0% 

37.9% 

38.4% 

Remuneration 

Total remuneration/(T otal Revenue ■ capital 
revenue) 

46.8% 

38.4% 

34.0% 

41.0% 

38.3% 

38.3% 

38.4% 

40.4% 

41.0% 

Repairs & Maintenance 

R&M/(Total Revenue excluding capital 
revenue) 

6.3% 

5.8% 

4.7% 

6.3% 

5.9% 

5.9% 

6.2% 

6.8% 

6.8% 

Finance charges & Depreciation 

IDP regulation financial viability indicators 

FC8D/(Total Revenue - capital revenue) 

25.0% 

36.4% 

11.6% 

10.0% 

10.1% 

10.1% 

9.5% 

9.8% 

9.7% 

i. Debt coverage 

(Total Operating Revenue ■ Operafng 
Grants)/Debt service payments due within 
financial year) 

11.7 

12.1 

17.5 

15.8 

15.8 

15.8 

16.5 

17.2 

18.7 

ii.O/S Service Debbrs to Revenue 

Total outstanding service debbrs/annual 
revenue received for services 

12.1% 

19.3% 

17.6% 

19.7% 

11.9% 

11.9% 

14.2% 

11.0% 

8.0% 

iii. Cost coverage 

(Available cash + lnvestments)/monlhly fxed 
operatonal expenditure 

1.1 

1.4 

1.5 

0.3 

1.2 

1.2 

0.7 

0.6 

0.7 


39 


Performance indicators and benchmarks 

Borrowing Management 

Capital expenditure in local government can be funded by capital grants, own-source revenue 
and long term borrowing. The ability of a municipality to raise long term borrowing is largely 
dependent on its creditworthiness and financial position. As with all other municipalities, 
Theewaterskloof Municipality’s borrowing strategy is primarily informed by the affordability of 
debt repayments. The municipality’s debt portfolio is consisting out of annuity loans. The 
following financial performance indicators have formed part of the compilation of the 2015/16 
MTREF: 

• Borrowing to asset ratio is a measure of the long-term borrowing as a percentage of the 
total asset base of the municipality. 

• Capital charges to operating expenditure are a measure of the cost of borrowing in 
relation to the operating expenditure. It can be seen that the cost of borrowing has 
decreased from 6.4 per cent in 201 1/12 to 4.6 per cent in 2015/16 

• This decrease can be attributed to fewer loans taken up to fund portions of the capital 
programme. While borrowing is considered a prudent financial instrument in financing 
capital infrastructure development, this indicator will have to be carefully monitored going 
forward as the municipality has reached its prudential borrowing limits. 

• Borrowing funding of own capital expenditure measures the degree to which own capital 
expenditure (excluding grants and contributions) has been funded by way of borrowing. 

In summary, various financial risks could have a negative impact on the future borrowing 
capacity of the municipality. In particular, the continued ability of the municipality to meet its 
revenue targets and ensure its forecasted cash flow targets are achieved will be critical in 
meeting the repayments of the debt service costs. 

Safety of Capital 

• The gearing ratio is a measure of the total long term borrowings over funds and reserves. 
Lower figures are more acceptable, showing that the company is predominantly financed 
by equity whilst high gearing shows an over reliance on borrowings for a significant 
proportion of the municipality's capital requirements. During the 2011/12 financial year 
the ratio was extremely high at 982.3 per cent. Although the ratio continues to improve 
from 254 per cent in the 2012/13 financial year to 138.3 per cent in 2015/16, it is still 
regarded as much too high and every effort should be made to reduce long term 
borrowing and to increase reserves. 

Liquidity 

• Current ratio is a measure of the current assets divided by the current liabilities and the 
benchmark would normally be set at a limit of 1, hence at no point in time should this 
ratio be less than 1. In the 2012/13 financial year the current ratio was 0.9, it increased 
to 1.1 in the 2013/14 financial year and thereafter a steady decrease is forecasted from 
1.0 in 2014/15 to 0.5 in 2017/18. Going forward it will be necessary to increase these 
levels to allow the municipality to be able to pay its liabilities when it falls due. 

• The liquidity ratio is a measure of the ability of the municipality to utilize cash and cash 
equivalents to extinguish or retire its current liabilities immediately. Ideally the 
municipality should have the equivalent cash and cash equivalents on hand to meet at 
least the current liabilities, which should translate into a liquidity ratio of 1. Anything 


40 



below 1 indicates a shortage in cash to meet creditor obligations. For the 2012/13 
financial year the ratio was 0.4 and is decreasing to 0.3 in the 2015/16 financial year. 

Revenue Management 

As part of the financial sustainability strategy, initiatives have been implemented to increase 
cash inflow such as prepaid water and electricity meters for all. The intention of the strategy is 
to streamline the revenue value chain by ensuring accurate billing, customer service, credit 
control and debt collection. Various other interventions are currently in process such as the 
Grabouw and Tesselaarsdal data cleansing, the restructuring of the revenue function and the 
task team for revenue management investigating the critical causes of a low collection rate 
which include systems, processes and data management. 

Creditors Management 

The municipality has managed to ensure that creditors are settled within the legislated 30 days 
of invoice. The municipality has managed to ensure a 100 per cent compliance rate to this 
legislative obligation. This has had a favourable impact on suppliers’ perceptions of risk of 
doing business with the municipality, which is expected to benefit the municipality in the form of 
more competitive pricing of tenders, as suppliers compete for the municipality’s business. 

Other Indicators 

• The electricity distribution losses have been set at 2,870,922 kw for 2015/16. The 
initiatives to ensure these targets are achieved include managing illegal connections and 
theft of electricity, including prepaid meters. 

• The water distribution losses in 2012/2013 were 672,530 kl. The 2014/15 target is set at 
747,257 kl. Initiatives such as free water leakage repair for indigent and prepaid water 
meters will assist in this regards. 

• Employee costs as a percentage of operating revenue decrease from 36%in the 2012/13 
to 35.9% in 2014/15 and increasing in the 2015/16 year to 36% 

Free Basic Services: basic social services package for indigent households 

The social package assists residents that have difficulty paying for services and are registered 
as indigent households in terms of the Indigent Policy of the municipality. 

For the 2015/16 financial year +/- 7 590 registered indigents have been provided for in the 
budget. In terms of the Municipality’s indigent policy registered households are entitled to 6kt 
free water and sanitation, 70 kwh of electricity and free waste removal, as well as a discount on 
their property rates. 

Further detail relating to the number of households receiving free basic services, the cost of free 
basic services, highest level of free basic services as well as the revenue cost associated with 
the free basic services is contained in Table A10 (Basic Service Delivery Measurement) on 
page 23. 

Note that the number of households in informal areas that receive free services and the cost of 
these services (e.g. the provision of water through stand pipes, water tankers, etc.) are taken 
into account in the table noted above. 


41 



Providing clean water and managing waste water 


Drinking Water Quality and Waste Water Management 

There are eight towns each with its own water and waste water treatment facility that falls under 
the management of the Theewaterskloof Municipality Authority except, for Caledon. The latter 
receives water from a service provider, Overberg Water. 

1. Blue Water Audit for 2012 

The performance of Theewaterskloof Municipality is still classified as satisfactory and ranked us 
the 18 th best on the Provincial Blue Drop log, despite the fact that the momentum of last year’s 
improvement could not be maintained. This would be mostly due to the rate of drinking water 
quality compliance not being according to expectation, but there would be enough progress with 
the implementation of regulatory requirements. Each water system was assessed against a set 
of criteria in a Performance Area. The overall score generated in the specific performance area 
is displayed in table below. 


Performance Area 

System 

Caledon 

Botrivier 

Voorstekraal/Bereaville 

Genadendal 

Water Safety Planning 

81 

66 

50 

52 

T reatment Process 

Management 

78 

59 

50 

51 

DWQ Compliances 

89 

45 

100 

100 

Management, Accountability 

78 

58 

58 

58 

Asset Management 

74 

62 

44 

44 

Bonus score 

2.77 

6.38 

4.5 

3.1 

Blue Drop Score 

84.29 

61 .74% 

52.76% 

68.66% 


Performance Area 

System 

Grabouw 

Greyton 

Riviersonderend 

Tesselaardal 

Water Safety Planning 

70 

52 

56 

50 

T reatment Process 

Management 

75 

51 

51 

40 

DWQ Compliances 

55 

45 

55 

73 

Management, Accountability 

58 

58 

58 

43 

Asset Management 

58 

50 

47 

62 

Bonus score 

3.34 

4.50 

4.15 

3.89 

Blue Drop Score 

65.25% 

54.46% 

58.06% 

60.65% 







42 


Performance Area 

System 

Viiliersdorp 

Water Safety Planning 

55 

T reatment Process 


40 

Management 



DWQ Compliances 

100 

Management, Accountability 

61 

Asset Management 

44 

Bonus score 

3.07 

Blue Drop Score 

68.93% 


1.1 Water Safety Plan 

DWAF has offered to assist us to draw up these plans for at least one of our town. All role 
players were involved in this project in order to understand and complete the plans for the 
remaining systems. 

1.2 Treatment Process Management 

All process controllers and treatment works are registered and uploaded on the Blue and Green 
drop regulatory systems but, we do not fully comply with regulation 2834 that states, that the 
registered process controllers comply with the legislative requirements in terms of 

• Number of Process Controller per shift 

• Complying with the required classification level of the treatment works and that the 
supervisor preferably on a higher classification level as that of the process controller on 
shift. 

Record keeping of all water related incidents that may have an impact on the immediate or 
greater community. 

It is a Blue and Green Drop necessity to have a qualified process controller on a Water and 
Wastewater Treatment System. The lack of skilled process controller and supervisors is just one 
of the many criteria that are needed for Blue & Green Drop Status achievements. At this stage 
our senior process controllers have completed an appropriate NQF 2 training in water & 
wastewater treatment at the Water Academy. This type of training will allow these process 
controllers to be fully qualified and skilled in their current position. In conjunction, DBSA 
launched a supervisory course for the Technical Officers that amplified the importance of 
operational and compliance monitoring, proper management of assets and financial 
management. 

1.3 Drinking Water Quality Compliances 

Failure to achieve 100% compliance can be linked to numerous factors including: 

• Incompetency of the process controller so therefore training needed or 

• The process controller doesn’t do daily operational monitoring to detect failures earlier 
before its reach the consumers 

• Proper equipment’s need to be place in order to do sampling 


43 


• Improper implementation of incident reporting regarding failure therefor trigger late 
response management 

• Treatment Works operate above its design capacity or treatment works not design to 
remove certain parameters. Process audit need to be conducted to see how the 
treatment can optimize. 

The monitoring program was not sufficient so we approach/got assistance from other local 
municipalities who scored 100% in these criteria. The program is compiled in such a way that at 
the end of the year a full analysis of the parameters as prescribed in the South Africa National 
Standard 241 (SANS 241) is generated, that is compulsory for the assessment. Provision of 
such analysis is made with the new Water Quality Tender/ contract with AL Abbott. 


1.4 Management, Accountability 

Management accountability weight 10% of the total allocated blue drop score. Management 
commitment is measured by approval of the Water Management Plans, as the municipality has 
a responsibility towards the direct consumer and broader public that we serve. We therefore 
need to inform them about the status of the drinking water delivered. Communication can 
proceed via SLA’s; posters; data submission to DWAF and newspaper publications. 

1.5 Asset Management 

The absence of Operational & Maintenance manuals on site, calibration certificates of water 
meters and availability of maintenance team competency from service providers influence the 
overall marked scored in this performance area. Some of the old treatment system lack proper 
or full O&M manual but with the assistance of Wamtechnology the Operational and 
Maintenance manuals were compiled 


44 



9. Overview of Budget Related Policies 


The following Budget-Related Policies have been approved by Council or have been reviewed 

and amended in line with National Guidelines and Legislation. 

7.1. Tariff Policy 

The municipality wishes to achieve the following by adopting this policy: 

1 . To comply with the provisions of Section 74 of the Local Government: Municipal Systems 
Act, 2000 (MSA): the municipality must adopt and implement a Tariff Policy on the 
levying of fees for municipal services provided by municipality 

2. To comply with Section 62(1 ) (f) of the MFMA wish states that the Accounting Officer 
must ensure that a municipality has and implement a Tariff Policy 

3. To prescribe Procedures and Principles (as defined in Section 74 (2) of the MSA for 
calculating tariffs were the municipality wishes to implement service providers in terms of 
Section 76(b) of the Act. 

4. To give guidance regarding tariff proposals and calculations to provide a framework to 
determine fair, transparent and affordable charges that also promote sustainable service 
delivery. 

The policy ensures a holistic and comprehensive overview on all the revenues / charges levied. 


7.2. Credit Control and Debt Collection Policy 

This policy has been formulated and developed in order to comply with Section 96 - 98 of the 
Local Government: Municipal Systems Act, 2000 which states: 

In terms of Section 96 of the MSA a municipality- 

(a) must collect all money that is due and payable to it, subject to this Act andany other 
applicable legislation; and 

(b) for this purpose, must adopt, maintain and implement a Credit Control and Debt Collection 

Policy which is consistent with its rates and tariff policies andcomplies with the provisions 
of the MSA. 

This policy is also aimed at guiding officials in the legislative implementation of processes 
necessary to ensure optimal revenue generation and collection. Increased revenue forms the 
basis for effective service delivery, infrastructure development, and economic growth. 

In line with the objective of creating a vibrant and growing municipality, the Credit Control, and 
Debt Collection Policy is also aligned to the Batho-Pele Principles. 


7.4. Cash Management and Investment Policy 

In terms Section 13 (2) of the Municipal Finance Management Act, 2003 the municipality must 
establish an appropriate and effective Cash Management and Investment Policy. 

The objectives of the policy are to ensure optimal performance with the least possible risk, in 
managing and investing the cash resources of the municipality and to ensure transparency, 
accountability, and appropriate lines of responsibility. 


45 



7.5. Grant in Aid Policy 

A Grant in Aid Policy was develop and approved by council in 28 October 2010 in terms of 
Section 67 of the MFMA. 

It deals with processes and procedure to be followed when the municipality allocates grants to 
other institutions in an equitable and transparent manner and in line with IDP Objectives. 

Provisions and disclosure must be made for Allocations under consideration in the draft budget 
and other prescribed budget related documents for public comments. 

Applications are made in line with Section 67 of the MFMA and the policy on a prescribed 
application form. The name of the institution, grant amount and description should be disclosed 
on the Grant Statement. 

7.6. Asset Management Policy 

This policy has been designed to assist management and officials of the Theewaterskloof 
Municipality with the description and management procedures for Property, Plant and 
Equipment, Intangible Assets, and Investment Property. 

It further aims to ensure that the assets of the municipality are properly accounted for, marked 
and to ensure that assets are utilized and maintained in an economic, effective, and efficient 
manner to ensure optimal utilization, value for money and sustainable service delivery. 

7.7. Risk Management Policy 

Section 62 (1) of the MFMA requires that the Accounting Officer takes all reasonable steps to 
ensure that the municipality has and maintains effective, efficient, and transparent systems of 
Financial and Risk Management, of internal control and of internal audit as well as the effective, 
efficient, and economical use of the resources of the municipality. 

The purpose of the Risk Management Policy is to enable the municipality not only to comply with 
legislation but also to manage risks by reducing/eliminating the likelihood and impact of risks in a 
pro-active, responsible and structured manner. 

7.8. Virement Policy 

Virement is process of transferring funds from one line item to another within one vote with the 
approval of the relevant Senior Manager and CFO, to enable Budget Manager to transfer funds 
from one vote line-item with anticipated savings to another. 

The aim is to improve financial controls over the processes and procedures of transferring funds 
and to ensure accountability and improved Budgetary Control. 

7.9. Anti-Corruption Policy 

To ensure that the Municipality is in compliance with the Municipal Systems Act, Act No 32 of 
2000 which requires the Municipality, amongst other things to develop and adopt appropriate 
systems and procedures that contribute to effective and efficient management of the 
municipality and its resources. 

7.10. Funds and Reserves Policy 

In terms of Sections 1 8 and 1 9 of the Municipal Finance Management Act (Act No 56 of 2003) 
(MFMA), an annual budget may only be funded from: 

• Realistically anticipated revenues to be collected; 

• Cash backed accumulated funds from previous years’ surpluses not committed for other 
purposes, and 


46 



• Borrowed funds, but only for capital projects. 

Furthermore, spending on a capital project may only be commenced with if the funding sources 
have been considered, are available and have not been committed for other purposes. 

The Council sets as objective a long term financially sustainable municipality with acceptable 
levels of service delivery to the community. 

This policy aims to set standards and guidelines in ensuring financial viability over both the 
short- and long term and includes funding- as well as reserves requirements. 

7.11. Short Term Insurance Policy 

The MFMA was introduced with the following objective: 

> The object of this Act is to secure sound and sustainable management of the fiscal and 
financial affairs of municipalities and municipal entities by establishing norms and 
standards and other requirements for — 

a) ensuring transparency, accountability and appropriate lines of responsibility in the 
fiscal and financial affairs of municipalities and municipal entities; 

b) the management of their revenues, expenditures, assets and liabilities and the 
handling of their financial dealings; 

The objective of this Short Term Insurance Management Policy is to ensure that the; 

■A municipality has transparent Insurance claim processes and procedures; 

S general public are informed about the correct processes & procedures when filing a claim 
with the municipality; 

'A general public are aware of the required documentation when filing a claim with the 
municipality; 

S managers and staff are aware of their responsibilities with regards to insurance 
management; 

'A managers and staff are informed about the correct processes & procedures when 
reporting; 

v' managers and staff are aware of the required documentation when filing a claim with the 
municipality; 

•A unions are informed about the correct processes & procedures; 

•S unions are aware of the required documentation; 

All the above-mentioned Policies were approved by Council and are reviewed at least annually. 
The policies are available on the municipality’s website. 

5.12. Policy on the Writing-Off of Irrecoverable Debt 

The purpose of this policy is to ensure that the principles and procedures for the writing-off of 
irrecoverable debt are formalised to ensure that consumers (especially households) are relieved 
of their spiral of debt. 


47 


10. Overview of Budget Assumptions 


The Challenge of the International, National and Local Economy is limited Resources versus 
unlimited needs. Theewaterskloof Municipality is no exception as the unlimited needs of the 
community as outlined in the IDP are far more than the limited revenue and resource capacity of 
the municipality. This is largely the reason for adopting Financial Viability as one of our long- 
term themes defined as improved sustainable revenue capacity versus sound financial resource 
management. 

The Ministerial Advisory Committee defines Financial Viability as “the ability of a local authority 
to fulfil its constitutional and legislative responsibilities. Resources to fulfil these obligations are 
derived from both the Equitable Share received and distributed nationally, as well as the 
revenue a municipality can raise locally”. 

It is important to highlight the following assumptions: 

1 Salaries: 

Increase is 8.5% 

2. Councillors Remuneration: 

6% increase is budgeted for. 

The cost associated with the remuneration of councillors is determined by the Minister of 
Co-operative Governance and Traditional Affairs in accordance with the Remuneration of 
Public Office Bearers Act, 1998 (Act 20 of 1998). The most recent proclamation in this 
regard has been taken into account in compiling the budget. 

3. Tariffs& Revenue Projections: 

Tariffs must be cost-reflective as far as possible because any subsidisation places a burden on 
another group of consumers. National Treasury continues to encourage municipalities to keep 
increases in rates, tariffs and other charges as low as possible. Municipalities must justify in 
their budget documentation all increases in excess of the 6 per cent upper limit of the South 
African Reserve Bank’s inflation target. Excessive increases are likely to be counterproductive, 
resulting in higher levels of non-payment. 

The municipality is currently investigating the different tariff structures in the municipality, 
including the effect of the level of cross subsidization between different functions on tariffs, with 
the aim to re-introduce cost recovery tariffs for all services in the next financial year. This is also 
a requirement set by the National Treasury. The 2015/16 financial year will see the introduction 
of a number of new bylaws, some of which will have a direct impact on tariffs and municipal 
revenue, the municipality has already began to structure these tariffs in such a manner that 
bylaws can be optimally enforced. 

Increases are as follows 

Service 

Assessment Rates 
Refuse 
Water 
Sewer 
Electricity 

Eskom Bulk Electricity Tariff 

Bulk purchases will increase with 14.24% (With the final approval of NERSA) 


Increase 

9.5% 

16% 

7% 

9% 

12.2% (Subject to approval of NERSA) 


48 



5. Bulk Water Tariff: 

The bulk water tariff has increased by 1 1 .5% 

6. Insurance 

6% increase according estimated CPI 

7. Other Expenditure 
-Fuel: 

The budget for the 2015/1 6 financial year amounts to R4.9m. 

-Ward Committee Allowances/Stipends: 

R467, 000 provided for Transport, Telephone and Stationery. 

-MSIG Application of Funds: 

Each Directorate must provide their Projects, clearly stating the impact/outcomes and 
credible costing 

- Financial Viability: 

R300.000 provided to ensure that initiatives/interventions are adequately resourced 

-Repairs & Maintenance: 

Delayed Maintenance result in disrepair and is more expensive due to price increases 
and the problem increases. 

R29, 553 million budgeted (6.5% of Budget) and the largest slice is taken Land and 
Buildings R7, 61 1m (25%) and for Networks (R5, 619m or 19%) and R5, 023m (16%) for 
Roads and Storm water. 

The budget for repairs on vehicles amount to R3, 048m while an amount of R2, 042m 
was provided for maintenance. In relation to the value of Fixed Assets this may be 
interpreted to be out of proportion. 

-Indigents Subsidies: 

We provided for +/- 7,590 Households. This figure seems to be realistic as there are 
many occupants of RDP Houses whether the beneficiaries or not who would qualify for 
Indigents Subsidy. Revenue Cost = R36, 922 million. 

The following problem areas are key factors to be addresses to ensure that the municipality is 
financial viable: 

o Subsidisation of rates funded services from trading services 
o No contribution to a capital replacement reserve fund 
o Productivity and Cost Cutting Measures 

o Ageing Infrastructure and inadequate provision for repairs and maintenance 
o Outdated fiscal model and limited grant funding for the benefit of indigent communities 
only 

o Institutional capacity and development sustainability 
o Uncontrolled Influx of Indigent People 
o Narrow Revenue Base of the municipality 

o Lack of Accurate Data Required for Longer Term Financial Planning 
o Unfunded Mandates 

“Mind the Gap” has been identified in a previous financial year. It remains relevant as it is 
crucial to narrow the gap between the expectations of the departments, the wider community of 
TWK and the financial and other resource capacity of the municipality. This includes managing 
and reducing high stakeholders/ community expectations and increasing capacity/ resources/ 


49 



efficiency and effectiveness. First, it is important to determine/ assess the financial health and 
potential (where we are). Then match available resources and potential resources (including 
financial) against Service Delivery, Infrastructure and Capital Needs for the next 5 years. 

Local Economic Development (LED) is a very important focus area as we need to broaden 
our Revenue Capacity by developing in the area . The Successful implementation of the Local 
Economic Development Strategy is a very important to enhance the Financial Viability of the 
municipality as LED have a definite impact on job creation, development, etc. 

The Primary Focus of LED is: 

• Social and Economic Development and Tourism. 

• Tourism promotion and destination marketing 

• SMME Development and Support 

Service Delivery remains a challenge for South African municipalities . Since 2006/2007the 
municipality has embarked on a process of filling vacancies to ensure that we have the capacity 
to deliver services. The South African Government highlighted targets to accelerate Service 
Delivery in SA and TWK acknowledges it. 

Financial Modelling and Key Planning Drivers 

As part of the compilation of the 2015/16 MTREF, extensive financial modelling was undertaken 
to ensure affordability and long-term financial sustainability. The following key factors, such as 
Demographics, Socio-Economic and Financial Factors and Principles and planning strategies 
have informed the compilation of the 2015/16 MTREF: 

■ CPI 

■ Interest Rates 

■ Fuel Price 

■ Economic Growth 

■ Economic Recession/ Job Losses 

■ Councillor’s and Officials’ Remuneration 

■ Debt Collection Rate 

■ Tariff Adjustment 

■ Indigent Increase 

■ Informal Settlement Control 

■ Migration/ Population Increase 

■ Equitable Share 

■ Bulk Purchase Tariff Increase 

In addition to the above, the strategic guidance given in National Treasury’s MFMA Circulars 51, 
54, 55, 58, 66, 67, 70and 72, 74have been taken into consideration in the planning and 
prioritisation process. 

Economic Growth 

South Africa’s economy grew by 1,5% in 2014, down from 2,2% in 2013, according to 
preliminary estimates of real gross domestic product (GDP) released by Stats SA. Eight of the 
ten industry groups experienced some growth during the year, while two industries shrank in 
size.The industry that grew the fastest in 2014 was agricultural , expanding by 5,6%, with 
government services coming in second place at 3,0%. 


50 



Economic Recession/Job Losses 


Unemployment remains SA’s single greatest economic and social challenge. Government 
measures include tax incentives for employment and investment, support for enterprise 
development, skills development and employment programmes. 

Historically, from 2000 until 2012, South Africa Unemployment Rate averaged 25.49 Percent 
reaching an all-time high of 31 .20 Percent in March of 2003 and a record low of 21 .90 Percent 
in December of 2008. Statistics South Africa released the employment figures for the last 
quarter of 2014. The report shows that there are now 15, 3 million people who are employed in 
South Africa. Jobs grew by 203 000. 

In South Africa, the unemployment rate measures the number of people actively looking for a 
job as a percentage of the labour force. However, as much of South Africa’s unemployment 
problem is structural in nature, it needs to be addressed through structural microeconomic 
interventions, and the new growth path, as outlined by government, goes some way in this 
direction 

TWK supports this initiative by utilizing the Expended Public Works Program (EPWP). 

Theewaterskloofs Gross Value Add (GVA) in 2013, which reflects the monetary value of the 
local economy, is R 5.24 billion per annum in current prices or R 2.97 billion in constant (2005) 
prices. This represents 40.2% of the R 13.03 billion Overberg economy and 1.2% of the R 
424.12 billion Western Cape economy, the “second highest economic hub in SA after Gauteng”. 
Of the total GVA generated by the District, Theewaterskloof contributes the highest GVA of 
40.2% followed by Overstrand at 28.4%, Cape Agulhas at 15.7% and Swellendam at 15.7% 
respectively. The average annual GVA growth rate for the last 5 years in Theewaterskloof was 
0.9% p.a. which is lower than the National (1.9%) and Western Cape (2.0%) averages for the 
same period, indicating a need to promote local economic development in the area. (INCA 
2014) 


Councillors and Officials Remuneration 


Councillors Remuneration is expected to increase by 6% and is also beyond the control of the 
municipality as increases in Councillor Remuneration are determined by the National 
Government in terms of the Remuneration of Public Office Bearers Act. It is extremely 
unfortunate that due to the upgrading of the Municipality to a grade 4 municipality had resulted 
in a reduction in the Equitable share allocation amounting to R4,2 million. 

Debt Collection Rate 


The target for Debt Collection Rate for 201 5/201 6is 92% and is determined in accordance with 
the realistically anticipated collection trends. Whilst there are pertinent and somewhat unique 
problems experienced by the TWK Municipality in performing effective credit control, every effort 
will be made by the municipality to achieve at least 92% collection ratio during 2015/16. In this 
regard, the following interventions are currently in progress or will be undertaken: 

o Decentralisation of credit control and debt collection function for the town of Grabouw 
o Door to door campaign to update indigent register and consumer account details 
o Intensified action against defaulters 

o Setting of targets for debt collection and weekly performance monitoring 


51 


o 


Employing additional resources to raise community awareness and to run a campaign 
aimed at marketing the municipality and changing community attitude, 
o Roll out of prepaid water meters and tariff restructuring 
o Conduct a water meter audit 


Tariff Adjustment 

A “zero-base” approach to improve on tariff setting, ensuring that the principles of benefit 
received, cost of service and cost-recovery, affordability and sustainability is taken into 
consideration. 

A Briefing- Session was conducted and one-on-one Sessions were held with Directorates 
Operations, Development and Technical Services and Town Managers on 1 1 February 2015. 

These engagements were dedicated to tariffs and the process of rationalization of services, 
identification of various categories of consumers, the level of services rendered/demanded and 
the levying of appropriate cost-recovery tariffs. 


Factors impacting on Tariff Increases 

The following factors were taken into consideration when calculating proposed tariff increases: 

• Affordability 

• Economic Recession, Job Losses 

• Councillors Remuneration 

• Personnel Cost 

• Escalating Fuel Prices 

• Economic Indicators (CPI, Interest Rates) 

• Escalating Bulk Purchases Prices (Water and Electricity) 

• Increasing Indigents 

• Electricity Bulk Price Increases (Eskom) 

• Repairs and Maintenance 

• Willingness and Ability to Pay 

S The Level/Standard of Service: the higher the level and standard, the higher the tariffs. 
S Benefit Received 
v' Affordability 

S Reputation: Good Governance 

S Good Service Delivery also ensures improved willingness to pay 
•S Recover of Capital and Usage Costs 

Deliverables 

• The possibilities of Rationalisation of Tariffs (number reduced) 

• Tariffs and Tariff Policy simplified for easy understanding and enhanced transparency. 

• Service Delivery Cost fully calculated and tariffs should reflect full cost. 

• Tariff Setting ensures the Sustainability of Services. 

• Tariff Policy must reflect the Financial Strategies. 

Tariff Goals 

• Revenue Sufficiency 

• Affordability of services 

• Promoting local economic development 

• Wasteful use of service discourage 


52 



• Rate of return on assets (in order to ensure allowance is made for the future expansion of 
infrastructure) 

Equitable Share 


The Equitable Share increased fromR62, 481m in 2014/15 to R63,908m2015/16. 


Years 

Equitable 

Share 

Indigent 

Subsidy 

Subsidy as a % 
of Equitable 

2010/2011 

43 655 

19 486 

45% 

2011/2012 

46 935 

21 035 

45% 

2012/2013 

53 343 

20 492 

38% 

2013/2014 

57 262 

22 914 

40% 

2014/2015 

62 481 

27 500 

44% 

2015/2016 

63 908 

32 922 

52% 


Indigents Subsidy 

The number of indigent Households is projected to increase. This anticipated increase is mainly 
caused by high levels of unemployment in the Theewaterskloof region, Agricultural Seasonal 
Employment and Influx of Indigent people seeking greener pastures. This trend will have a 
significant impact on the Equitable Share Grant Allocation. 

Informal Settlement Control 

Based on the survey conducted by LMS it is evident that squatter control is becoming an 
unavoidable issue which needs to be managed more pro-effectively. The municipality is actively 
pursuing ideas to establish a squatter control unit to address this issue. 

Migration/ Population Increase 

According to the census 2001 Theewaterskoof had a population of 93,276, and the results of 
the 201 1 census the population is 108,790 which shows an estimated increase of 14%. 

The population growth is especially in the Grabouw and Villiersdorp Farms is due to the 
agriculture sector being one of the major economic activities in TWK. The agriculture sector, 
more intensively in the Fruit production is labour-intensive and seasonal. These farm workers 
are only economically active for a certain period of the year and can contribute to revenue 
(municipal service) only during that period. 

The result of the increase in the population is that there is an increase pressure on our public 
services such as Clinics, Law Enforcement, and our infrastructure and land availability for 
houses. 

Community Consultation 

The draft 2015/16 MTREF was tabled before Council on 26 March 2015 for community 
consultation and will be published on the municipality’s website, and hard copies made available 
at customer care offices, municipal notice boards and various libraries. 

All documents in the appropriate format (electronic and printed) will be provided to National 
Treasury, and other national and provincial departments in accordance with section 23 of the 
MFMA, to provide an opportunity for them to make inputs. 


53 


Ward Committees and Town Advisory Forum, which serve as the representative forums of 
stakeholders and form the link between the Municipality and the community, will be utilised to 
facilitate the community consultation process during April 2015, and included nine public briefing 
sessions. The applicable dates and venues will be published in all the local newspapers. 


54 



1 1 . Overview of Budget and Funding 

In terms of Section 18 of the Municipal Finance Management Act, an Annual Budget may only 
be funded from: 

• Realistically anticipated revenues to be collected 

• Cash backed accumulated funds from previous years surpluses not committed for other 
purposes 

• Borrowed funds, but only for the Capital Budget (Fixed assets, Infrastructure, Property, 

Plant and Equipment) 

The budget recognizes compliance to the following: 

• Credible, consistent and responsive to the municipality’s IDP 

• Funded and achievable in terms of service delivery 

• Institutional Needs Analyses and takes into consideration Risk Analyses, Internal, and 
External Factors impacting on service delivery. 

• Contains Revenue and Expenditure Projections that are consistent with current and past 
year performances. 

• The municipality has overcome all the major obstacles which had an impact on its capacity 
to spend its budget and render services. These include blockages in the form of staff, 
policies, procedures, and processes. 

• Does not jeopardize the Financial Viability of the municipality. 

Tariff setting plays a major role in ensuring desired levels of revenue. Getting tariffs right assists 
in the compilation of a credible and funded budget. The Municipality derives most of its 
operational revenue from the provision of goods and services such as water, electricity, 
sanitation and solid waste removal and property rates. 

Revenue was based on: 

• Growth in the municipality and economic development 

• Revenue management and enhancement 

• Achievement of 92 per cent annual collection rate for consumer revenue 

• Electricity tariff increase within the National Electricity Regulator of South Africa (NERSA) 
approval 

• Achievement of full cost recovery of specific user charges 

• Determining tariff excalation rate by establishing/calculating revenue requirements 

• The Property Rates Policy in terms of the Municipal Property Rates Act, 2004 (Act 6 of 
2004) (MPRA), and 

• And the ability to extend new services and obtain cost recovery levels. 

The above principles guide the annual increase in the tariffs charged to the consumers and the 
ratepayers aligned to the economic forecasts. 


The following illustrate the difference between the 2014/1 5and 2015/16 tariff increase: 


Particulars 

2014/15 

2015/16 

Rates 

13% 

9.5% 

Electricity 

7.39% 

12.2% 

Refuse 

9% 

16% 

Sewerage 

6% 

9% 

Water 

Depending on individual 
consumption 

7% 


55 




Services charges relating to electricity, water, sanitation and refuse removal constitutes the 
biggest component of the revenue basket of the municipality totalling R1 56,254 million for the 
2014/15 financial year and increasing to R178, 274million for the 2015/16 financial year 


Operational grants and subsidies amount to R136, 386 million, R126,373 million and R128, 167 
million for each of the respective financial years of the MTREF 

Investment revenue actual performance will be carefully monitored. Any variances in this 
regard will be addressed as part of the mid-year review and adjustments budget. 

The tables below provide detail investment information and investment particulars by maturity. 


Monetary investments by type (Table SA15) 


Investment type 

R thousand 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+22017/18 

Parent municipality 










Securities - National Government 

Listed Corporate Bonds 

Deposits -Bank 

Deposits - Public Investment Commissioners 

Deposits - Corporaion tor Public Deposits 

Bankers Acceptance Ceriicates 

Negoiable Ceriicates of Deposit - Banks 

Guaranteed Endowment Policies (sinking) 

Repurchase Agreements -Banks 

Municipal Bonds 

15042 

r 20 740 

r 26 967 

f 

r 30000 

30000 

r 20000 

10 000 

10 000 

Municipality sub-total 










15042 

20 740 

26 967 

- 

30000 

30000 

20000 

10 000 

10 000 

Consolidated total: 

15042 

20 740 

26 967 

- 

30000 

30000 

20000 

10 000 

10 000 


56 


The following table is a detailed analysis of the municipality’s borrowing liability. 


Detail of borrowings (Tab 

e SA17 


Borrowing ■ Categorised by type 

R thousand 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+22017/18 

Parent municipality 










Long-Term Loans (annuily/reducing balance) 
Long-Term Loans (non-annuity) 

Local registered stock 

Instalment Credit 

Financial Leases 

PPP liabilities 

Finance Granted By Cap Equipment Supplier 

Marketable Bonds 

Non-Marketable Bonds 

Bankers Acceptances 

Financial derivatves 

Other Securites 

Municipality sub-total 

112661 

86 

T 105724 

r 

65 

110091 

r 

102 948 

' 

32 

114 095 

r 

114095 

r 

117307 

r 

108996 

r 

102991 

r 

112 747 

105788 

110091 

102980 

114095 

114095 

117 307 

108996 

102991 

Total Borrowing 

112 747 

105788 

110091 

102980 

114095 

114095 

117 307 

108996 

102991 


1.3 Cash flow Management 

Cash flow management and forecasting is a critical step in determining if the budget is funded 
over the medium-term. The table below is consistent with international standards of good 
financial management practice and also improves understandability for councillors and 
management. Some specific features include: 

• Clear separation of receipts and payments within each cash flow category; 

• Clear separation of capital and operating receipts from government, which also enables 
cash from ‘Ratepayers and other’ to be provide for as cash inflow based on actual 
performance. In other words the actual collection rate of billed revenue., and 

• Separation of borrowing and loan repayments (no set-off), to assist with MFMA 
compliance assessment regarding the use of long term borrowing (debt). 


57 


Budget cash flow statement (Table A7) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 
Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

CASH FLOW FROM OPERATING ACTIVITIES 
Receipts 










Properly rates, penalties & collection charges 

42 099 

47 607 

58 673 

61 980 

58 788 

r 58 788 

63 358 

71 840 

76 930 

Service charges 

120 757 

131 967 

142 532 

140121 

137 642 

r 137 642 

150 173 

173 000 

188 744 

Other revenue 

( 9185 ) 

r ( 15014 ) 

(2 452 ) 

25 961 

35 430 

r 35 430 

26 058 

27 621 

32 279 

Government - operating 

56 428 

63 624 

67 750 

103 590 

127 946 

r 127 946 

136 386 

126 373 

128 167 

Government - capital 

58 973 

77 511 

79159 

54 670 

61 638 

T 61 638 

38 617 

40 831 

41 166 

Interest 

9 572 

10 024 

12171 

8 962 

9 480 

r 9 480 

8 338 

9 261 

9 832 

Dividends 

- 

- 

- 

- 

- 

r 

- 

- 

- 

Payments 










Suppliers and employees 

(218 692 ) 

(209 598 ) 

(277 468 ) 

(307 741 ) 

(335 595 ) 

r (335 595 ) 

(368 260 ) 

(382 021 ) 

(400 286 ) 

Finance charges 

(12 928 ) 

(12 780 ) 

(12 742 ) 

( 12133 ) 

(11 433 ) 

T (11 433 ) 

( 12196 ) 

(12 928 ) 

(13 703 ) 

Transfers and Grants 

( 638 ) 

( 783 ) 

( 824 ) 

(1 000 ) 

(1 000 ) 

r (1 000 ) 

(1 000 ) 

(1 060 ) 

(1 124 ) 

NET CASH FROM/(USED) OPERATING ACTIVITIES 

46 384 

92 559 

66 799 

74 410 

82 897 

82 897 

41 472 

52 918 

62 005 

CASH FLOWS FROM INVESTING ACTIVITIES 
Receipts 










Proceeds on disposal of PPE 

3 689 

8 398 

1 584 

1 656 

- 

r 

2 247 

2 382 

2 524 

Decrease (Increase) in non-current debtors 

- 

- 

- 

- 

- 


- 

- 

- 

Decrease (increase) other non-current receivables 

3 

13 

586 

- 

5 

” 5 

- 

- 

- 

Decrease (increase) in non-current investments 

- 

- 

- 

- 

- 


- 

- 

- 

Payments 










Capital assets 

(65 246 ) 

(88 401 ) 

(62 947 ) 

(67 547 ) 

(85 177 ) 

r (85 177 ) 

(60 973 ) 

(51 731 ) 

(53 714 ) 

NET CASH FROM/(USED) INVESTING ACTIVITIES 

(61 554) 

(79 990) 

(60 777) 

(65 891) 

(85 172) 

(85 172) 

(58 726) 

(49 349) 

(51 189) 

CASH FLOWS FROM FINANCING ACTIVITIES 
Receipts 










Shortterm loans 

- 

- 

- 

- 

- 


- 

- 

- 

Borrowing long term/refinancing 

21 385 

23 

11 275 

5 670 

5 670 

r 5 670 

11 550 

- 

3 218 

Increase (decrease) in consumer deposits 

95 

61 

354 

213 

220 

r 220 

233 

247 

262 

Payments 










Repayment of borrowing 

(7 520 ) 

(6 521 ) 

(6 978 ) 

( 7183 ) 

(6 974 ) 

r (6 974 ) 

(6 974 ) 

(8 338 ) 

(8 312 ) 

NET CASH FROM/(USED) FINANCING ACTIVITIES 

13 960 

(6 437) 

4 651 

(1 300) 

(1 084) 

(1 084) 

4 809 

(8 091) 

(4 832) 

NET INCREASE/ (DECREASE) IN CASH HELD 

(1 210) 

6131 

10 673 

7 220 

(3 359) 

(3 359) 

(12 445) 

(4 522) 

5 984 

Cash/cash equivalents at the year begin: 

22 624 

21 414 

27 545 

15 

38 218 

r 38 218 

34 859 

22 414 

17 892 

Cash/cash equivalents at the year end: 

21 414 

27 545 

38 218 

7 235 

34 859 

34 859 

22 414 

17 892 

23 875 


1.4Cash Backed Reserves/Accumulated Surplus Reconciliation 

This following table meets the requirements of MFMA Circular 42 which deals with the funding 
of a municipal budget in accordance with sections 18 and 19 of the MFMA. A surplus would 
indicate the cash-backed accumulated surplus that was/is available. A shortfall (applications > 
cash and investments) is indicative of non-compliance with section 18 of the MFMA requirement 
that the municipality’s budget must be ‘funded’. Non-compliance with section 18 is assumed 
because a shortfall would indirectly indicate that the annual budget is not appropriately funded 
(budgeted spending is greater than funds available or to be collected). It is also important to 
analyse trends to understand the consequences, e.g. the budget year might indicate a small 
surplus situation, which in itself is an appropriate outcome, but if in prior years there were much 
larger surpluses then this negative trend may be a concern that requires closer examination. 


58 


Cash backed reserves/accumulated surplus reconciliation (Table A8) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Cash and investments available 










Cash/cash equivalents atthe year end 

21414 

27 545 

38 218 

7235 

34 859 

34 859 

22414 

17 892 

23 875 

Other current investments >90 days 

0 

0 

0 

- 

0 

0 

- 

- 

- 

Non current assets - Investments 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Cash and investments available: 

21 414 

27545 

38 218 

7 235 

34 859 

34 859 

22 414 

17 892 

23 875 

Application of cash and investments 










Unspent conditional transfers 

7 554 

5 529 

1312 

- 

- 

- 

- 

- 

- 

Unspent borrowing 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Statutory requirements 

951 

1637 

r 1355 

1637 

1355 

1355 

1355 

r 1355 

1355 

Other working capital requirements 

7 558 

14 569 

13 994 

(6 854) 

12 498 

12498 

7 292 

11 175 

18 756 

Other provisions 










Long term investments committed 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Reserves Id be backed by cash/investments 

55 

555 

r 6 555 

3 022 

r 6 381 

6 381 

3 566 

r 3566 

r 3 566 

Total Application of cash and investments: 

16119 

22290 

23 216 

(2195) 

20 235 

20 235 

12 213 

16 096 

23 677 

Surplus(shortfall) 

5 295 

5 255 

15 002 

9 430 

14 624 

14 624 

10 201 

1795 

198 


From the above table it can be seen that the cash and investments available total R9, 430 
million (original budget) in the 2014/15 financial year and increase to RIO, 201 million by 
2015/16, including the projected cash and cash equivalents as determined in the cash flow 
forecast. The following is a breakdown of the application of this funding: 

• Unspent conditional transfers (grants) are automatically assumed to be an obligation as 
the municipality has received government transfers in advance of meeting the conditions. 
Ordinarily, unless there are special circumstances, the municipality is obligated to return 
unspent conditional grant funds to the national revenue fund at the end of the financial 
year. In the past these have been allowed to ‘roll-over’ and be spent in the ordinary 
course of business, but this practice has been discontinued. 

• There is no unspent borrowing from the previous financial years. Unspent borrowing is 
ring-fenced and reconciled on a monthly basis to ensure no unnecessary liabilities are 
incurred. 

• Provisions for statutory requirements include VAT owing to timing differences resulting 
from year- end obligations. 

• The main purpose of other working capital is to ensure that sufficient funds are available 
to meet obligations as they fall due. A key challenge is often the mismatch between the 
timing of receipts of funds from debtors and payments due to employees and creditors. 
It needs to be noted that, the desired cash levels should be 60 days to ensure continued 
liquidity of the municipality. Any underperformance in relation to collections could place 
upward pressure on the ability of the municipality to meet its creditor obligations. 

• Other provision liability is informed by, amongst others, the supplementary pension 
liability. 

• Long term investments consist primarily of the sinking funds for the repayment of future 
borrowings. The sinking fund value is held within long term investments and must be 
‘held to maturity’ and is not available for spending. 

• Most reserve fund cash-backing is discretionary in nature, but the reserve funds are not 
available to support a budget unless they are cash-backed. The reserve funds are not 
fully cash-backed. The level of cash-backing is directly informed by the municipality’s 
cash backing policy. These include the rehabilitation of landfill sites and quarries. 

The challenge for the Municipality will be to ensure that the underlying planning and cash flow 
assumptions are meticulously managed, especially the performance against the collection rate. 


59 


1.5Funding compliance measurement 


National Treasury requires that the municipality assess its financial sustainability against 
fourteen different measures that look at various aspects of the financial health of the 
municipality. These measures are contained in the following table. All the information comes 
directly from the annual budgeted statements of financial performance, financial position and 
cash flows. The funding compliance measurement table essentially measures the degree to 
which the proposed budget complies with the funding requirements of the MFMA. Each of the 
measures is discussed below. 


-unding compliance measurement 

(Table SA10 













2011/12 

2012/13 

2013/14 

Current Year 2014/15 




Description 












section 

Audited 

Audited 

Audited 

Original 

Adjusted 

Full Year 

Budget Year 

Budget Year 

Budget Year 



Outcome 

Outcome 

Outcome 

Budget 

Budget 

Forecast 

2015/16 

+1 2016/17 

+2 2017/18 

Fundinq measures 











Cash/cash equivalents at the year end ■ R'000 

18(1)b 

21 414 

27545 

38 218 

7235 

34 859 

34 859 

22414 

17 892 

23875 

Cash + investments at the yr end less applications - R'000 

18(1)b 

5 295 

5255 

15 002 

9430 

14 624 

14624 

10 201 

1795 

198 

Cash year end/monthly employee/supplier payments 

18(1)b 

1.1 

1.4 

1.5 

0.3 

1.2 

1.2 

0.7 

0.6 

0.7 

Surplus/(Deficit) excluding depreciation offsets: R'000 

18(1) 

(17 346) 

14530 

58 618 

46985 

43656 

43656 

16873 

12153 

17 063 

Service charge rev % change - macro CPIX target exclusive 

18(1)a,(2) 

N.A. 

4.1% 

6.2% 

5.9% 

(6.0%) 

(6.0%) 

6.6% 

1.2% 

2.3% 

Cash receipts % of Ratepayer & Other revenue 

18(1)a,(2) 

80.1% 

71.9% 

71.0% 

88.5% 

86.9% 

86.9% 

83.7% 

88.9% 

89.2% 

Debt impairment expense as a % of total billable revenue 

18(1)a,(2) 

19.9% 

12.7% 

23.5% 

10.5% 

16.7% 

16.7% 

12.5% 

12.4% 

12.1% 

Capital payments % of capital expenditure 

1 8( 1 )c; 1 9 

100.5% 

100.1% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

Borrowing receipts % of capital expenditure (excl. transfers) 

18(1)c 

95.1% 

0.1% 

69.8% 

44.2% 

25.7% 

25.7% 

51.7% 

0.0% 

25.6% 

Grants % of Govt legislated/gazetted allocations 

18(1)a 







101.0% 

101.1% 

101.1% 

Current consumer debtors % change - incr(decr) 

18(1)a 

N.A. 

76.0% 

2.6% 

24.8% 

(39.6%) 

0.0% 

34.4% 

(16.7%) 

(21.3%) 

Long term receivables % change - incr(decr) 

18(1)a 

N.A. 

(35.5%) 

(2.2%) 

(20.2%) 

(3.2%) 

0.0% 

0.0% 

0.0% 

0.0% 

R&M % of Property Plant & Equipment 

20(1)(vi) 

3.5% 

3.2% 

2.9% 

4.3% 

3.3% 

3.3% 

3.5% 

3.8% 

3.9% 

Asset renewal % of capital budget 

20(1)(vi) 

38.2% 

48.9% 

27.4% 

50.3% 

38.5% 

38.5% 

36.3% 

42.5% 

75.4% 


1. 5.1.1 Cash/cash equivalent position 

The municipality’s forecast cash position was discussed as part of the budgeted cash flow 
statement. A ‘positive’ cash position, for each year of the MTREF would generally be a minimum 
requirement, subject to the planned application of these funds such as cash-backing of reserves 
and working capital requirements. 

If the municipality’s forecast cash position is negative, for any year of the medium term budget, 
the budget is very unlikely to meet MFMA requirements or be sustainable and could indicate a 
risk of non-compliance with section 45 of the MFMA which deals with the repayment of short 
term debt at the end of the financial year. The forecasted cash and cash equivalents for the 
2015/16 MTREF shows R22, 414 million, R17, 892 million and R23, 875 million for each 
respective financial year. 

1.5.1. 2 Cash plus investments less application of funds 

The purpose of this measure is to understand how the municipality has applied the available 
cash and investments as identified in the budgeted cash flow statement. The detail 
reconciliation of the cash backed reserves/surpluses is contained in Table A8, on page 20. The 
reconciliation is intended to be a relatively simple methodology for understanding the budgeted 
amount of cash and investments available with any planned or required applications to be 
made. This has been extensively discussed above. 


1.5.1. 3 Monthly average payments covered by cash or cash equivalents 

The purpose of this measure is to understand the level of financial risk should the municipality 
be under stress from a collection and cash in-flow perspective. Regardless of the annual cash 
position an evaluation should be made of the ability of the municipality to meet monthly 
payments as and when they fall due. It is especially important to consider the position should 

60 


the municipality be faced with an unexpected disaster that threatens revenue collection such as 
rate boycotts. Notably, the ratio has been improved for the period 2012/13 to 2013/14, moving 
from 1.4 to 1.5. Currently it is estimated that the municipality will have 1.2 months cash 
available (2014/15), although the municipality’s aim is to improve this ratio to at least two 
months, it looks unlikely that this goal will be achieved over the 2015/16 as the estimated 
available cash for 2015/16 is projected to be 0.7. This measure will have to be carefully 
monitored going forward. 


1.5. 1.4 Surplus/deficit excluding depreciation offsets 

The main purpose of this measure is to understand if the revenue levels are sufficient to 
conclude that the community is making a sufficient contribution for the municipal resources 
consumed each year. An ‘adjusted’ surplus/deficit is achieved by offsetting the amount of 
depreciation related to externally funded assets. Municipalities need to assess the result of this 
calculation taking into consideration its own circumstances and levels of backlogs. If the 
outcome is a deficit, it may indicate that rates and service charges are insufficient to ensure that 
the community is making a sufficient contribution toward the economic benefits they are 
consuming over the medium term. For the 2015/16 MTREF the indicative outcome is a surplus 
excluding depreciation off sets of R1 6 million, R1 2 million and R1 7 million. 

It needs to be noted that a surplus does not necessarily mean that the budget is funded from a 
cash flow perspective and the first two measures in the table are therefore critical. 


1.5. 1.5 Property Rates/service charge revenue as a percentage increase less macro 
inflation target 

The purpose of this measure is to understand whether the municipality is contributing 
appropriately to the achievement of national inflation targets. This measure is based on the 
increase in ‘revenue’, which will include both the change in the tariff as well as any assumption 
about real growth such as new property development, services consumption growth etc. 

The factor is calculated by deducting the maximum macro-economic inflation target increase 
(which is currently 3 - 6 per cent). The result is intended to be an approximation of the real 
increase in revenue. From the table above the percentage for the 2015/16 MTREF is 6.6 and 0 
for the outer years. The outcome is lower than it should be due to the slowdown in the economy 
and a reduction in consumption patterns. This trend will have to be carefully monitored and 
managed with the implementation of the budget. 


1.5. 1.6 Cash receipts as a percentage of ratepayer and other revenue 
This factor is a macro measure of the rate at which funds are ‘collected’. This measure is 
intended to analyse the underlying assumed collection rate for the MTREF to determine the 
relevance and credibility of the budget assumptions contained in the budget. It can be seen that 
the outcome is at 83.7, 88.8 and 88.9 per cent for each of the respective financial years. Given 
that the assumed collection rate for rates and service charges was based on a 92 per cent 
performance target, the cash flow statement has been conservatively determined. 


1.5. 1. 7 Debt impairment expense as a percentage of billable revenue 

This factor measures whether the provision for debt impairment is being adequately funded and 

is based on the underlying assumption that the provision for debt impairment (doubtful and bad 


61 



debts) has to be increased to offset under-collection of billed revenues. The provision has been 
appropriated at 12.5 per cent over the MTREF. 


1.5.1. 8 Capital payments percentage of capital expenditure 

The purpose of this measure is to determine whether the timing of payments has been taken 
into consideration when forecasting the cash position. 


1.5.1. 9 Borrowing as a percentage of capital expenditure (excluding transfers, grants and 

contributions) 

The purpose of this measurement is to determine the proportion of a municipality’s ‘own-funded’ 
capital expenditure budget that is being funded from borrowed funds to confirm MFMA 
compliance. Externally funded expenditure (by transfers/grants and contributions) has been be 
excluded. It can be seen that borrowing equates to 51 .7 per cent of own funded capital. 


1.5.1.10 Transfers/grants revenue as a percentage of Government transfers/grants 
available 

The purpose of this measurement is mainly to ensure that all available transfers from national 
and provincial government have been budgeted for. A percentage less than 100 per cent could 
indicate that not all grants as contained in the Division of Revenue Act (DoRA) have been 
budgeted for. The municipality has budgeted for all transfers. 


1.5.1.11 Consumer debtors change (Current and Non-current) 

The purpose of these measures is to ascertain whether budgeted reductions in outstanding 
debtors are realistic. There are 2 measures shown for this factor; the change in current debtors 
and the change in long term receivables, both from the Budgeted Financial Position. The ratio 
reflected in 2015/16 financial year for current consumer debtors and long term receivables 
percentage change are 34.4% and (16.7%) and (21 .3%) respectively. 


1.5. 1. 12 Repairs and maintenance expenditure level 

This measure must be considered important within the context of the funding measures criteria 
because a trend that indicates insufficient funds are being committed to asset repair could also 
indicate that the overall budget is not credible and/or sustainable in the medium to long term 
because the revenue budget is not being protected. Details of the municipality’s strategy 
pertaining to asset management and repairs and maintenance are contained in Table SA34C on 
page 75. As previously illustrated the municipality has a relatively low expenditure percentage 
on Repairs and Maintenance projected for 2015/16 (3.5%). 


1.5. 1. 13 Asset renewal/rehabilitation expenditure level 

This measure has a similar objective to aforementioned objective relating to repairs and 
maintenance. A requirement of the detailed capital budget (since MFMA Circular 28 which was 
issued in December 2005) is to categorise each capital project as a new asset or a 
renewal/rehabilitation project. The objective is to summarise and understand the proportion of 
budgets being provided for new assets and also asset sustainability. A declining or low level of 
renewal funding may indicate that a budget is not credible and/or sustainable and future 
revenue is not being protected, similar to the justification for ‘repairs and maintenance’ budgets. 
Further details in this regard are contained in Table SA34b on page 75. 


62 



12. Expenditure on allocations and grant programmes 


zxpenditure on allocations and grant programmes (Table SA19) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Audited 


Audited 

Original 

Adjusted 


Full Year 

Budget Year 

Budget Year 

Budget Year 

Outcome 

Outcome 


Outcome 

Budget 

Budget 


Forecast 


2015/16 


+1 2016/17 


+2 2017/18 

EXPENDITURE: 















Operatinq expenditure of Transfers and Grants 















National Government: 

49 267 

57 084 


64 428 

71 643 

72 012 


72 012 


74 080 


73 077 


78 584 

Local Government Equitable Share 

44 750 

53 343 


57 262 

62 481 

62 481 

P 1 

62 481 


63 909 

p 

68 752 

- 

74 003 

Finance Management 

1 716 

1 641 


1 223 

1 600 

1 600 


1 600 


1 404 


1 625 


1 700 

Municipal Systems Improvement 

1 336 

941 


814 

934 

825 

r 

825 


816 

r 

957 

r 

1 033 

Expanded Public Works Programme 

1 464 

1 160 


1 000 

1 106 

1 106 


1 106 


1 086 


- 


- 

SETA 

- 

- 


- 

769 

- 


- 


1 645 


1 743 


1 848 

MIG Operational 





765 

923 

r 

923 


750 

T 

- 

r 

- 

Municipal Disaster Recovery 





- 

1 385 


1 385 


- 


- 


- 

VAT on operating grants 




938 

- 

- 


- 


311 


- 


- 

VAT on capital grants 




3192 

3 989 

3 693 


3 693 


4160 


- 


- 

Other transfers/grants [insert desc] 







r 

- 







Provincial Government: 

4 379 

6 065 

40 857 

30 947 

48 330 


48 330 

62 234 

53 296 

49 583 

Community Development Worker Grant 

145 

142 


159 

122 

232 


232 


126 

f 

133 

- 

139 

Library Services Grant 

4 234 

5 671 


6150 

6 075 

6185 


6185 


6 539 


6 931 


7 348 

Proclaimed Main Roads 

- 

108 


68 

92 

92 


92 


114 


- 


- 

Spatial Dev Framework 

- 

- 


30 

- 

- 


- 


- 


- 


- 

Botrivier Development Contribution 

- 

- 


39 

- 

- 


- 


- 


- 


- 

Finance Management 

- 



572 

- 

1 437 


1 437 


- 


- 


- 

Housing 

- 

- 


33 769 

24 658 

39 934 


39 934 


54 743 


44 986 


38 836 

Sport and culture 

- 

144 


- 

- 

- 


- 


- 


- 


- 

Project Preparation 

- 

- 


69 

- 

- 


- 


- 


- 


- 

Muncipal Infrastructure Support Grant 





- 

450 


450 







Violence Prevention through Urban Upgrading 





- 

- 


- 


500 


1 000 


3 000 

Thusong Service Centres Grant 





- 

- 


- 


212 


246 


260 

Other transfers/grants [insert desc] 







r 

- 







District Municipality: 

. 

. 

. 

. 

. 


. 

_ 

. 

. 

[insert description] 





- 

- 


- 


- 

' 

- 

r 

- 






- 

- 

r 

- 


- 

r 

- 

r 

- 

Other grant providers: 

1 788 

1 780 

1 650 

1 000 

2 602 

r 

2 602 

72 

_ 

_ 

r IDC Grant 

- 

165 


368 

- 

266 

P 

266 


- 

f 

- 

¥ 

- 

DBSA Local Economic Development 

557 

368 


118 

- 

345 


345 


- 


- 


- 

DBSA GIS 

- 

- 


1 

- 

- 


- 


- 


- 


- 

r HAN 

569 

837 


931 

1 000 

1 222 


1 222 


72 


- 


- 

DBSA 

22 

- 


- 

- 

- 


- 


- 


- 


- 

SETA 

640 

409 


232 

- 

769 

r 

769 


- 


- 


- 

Total operating expenditure of Transfers and Grants 

55 434 

64 929 

106 936 

103 590 

122 945 

122 945 

136 386 

126 373 

128167 

Capital expenditure of Transfers and Grants 















National Government: 

20 954 

43 388 


27 679 

31 706 

29 841 


29 841 


29 717 


33 517 


34 852 

Municipal Infrastructure Grant (MIG) 

19 550 

28 092 


21 939 

21 617 

21 648 

* 

21 648 

r 

21 822 

p 

26 517 

■ 

27 852 

Integrated National Electrification Programme 

1 000 

3 000 


- 

3 421 

3 421 


3 421 


4 386 


7 000 


7 000 

Regional Bulk Infrastructure 

277 

10 500 


5 695 

6 668 

4 773 


4 773 


3 509 


- 


- 

Neighborhood development Grant 

127 

1 796 


1 

- 

- 




- 


- 


- 

Municipal Systems Improvement 




44 

- 

- 




- 


- 


- 

Other capital transfers/grants [insert desc] 







r 

- 







Provincial Government: 

34 452 

38 808 

21 234 

22 964 

31 797 

r 

31 797 

8 900 

7 314 

6 314 

Housing 

31 624 

37 308 


18 589 

22 964 

31 229 

f 

31 229 


8 900 

p 

7 314 


6 314 

Impound Facility 

- 

- 


426 

- 

- 




- 


- 


- 

Proclaimed Main Roads 

2 828 

- 


- 

- 

- 




- 


- 


- 

Community Centre 

- 

- 


2 220 

- 

- 




- 


- 


- 

Sportfields 

- 

- 


- 

- 

- 

r 



- 

w 

- 

r 

- 

Public T ransport Infrastructure Grant 

- 

1 500 


- 

- 

- 




- 


- 


- 

Muncipal Infrastructure Support Grant 





- 

568 

r 

568 

r 

- 

r 

- 

r 

- 

District Municipality: 

_ 

_ 

62 

_ 

_ 

r 

_ 

_ 

_ 

_ 

Multi-purpose bus 

- 

- 


62 

- 

- 

r 


■ 

- 

w 

- 

■ 

- 


- 

- 


- 

- 

- 

r 


/ 

- 

r 

- 

r 

- 

Other grant providers: 

_ 

_ 

_ 

_ 

_ 

r 

_ 

_ 

_ 

_ 

[insert description] 

- 

- 


- 

- 

- 

P 


w 

- 

f 

- 

■ 

- 


- 

- 


- 

- 

- 

r 


r 

- 

r 

- 

r 

- 

Total capital expenditure of Transfers and Grants 

55 406 

82196 

48 975 

54 670 

61 638 

61 638 

38 617 

40 831 

41 166 

TOTAL EXPENDITURE OF TRANSFERS AND GRANTS 

110 839 

147 126 

155 911 

158 261 

184 583 

184 583 

175 003 

167 204 

169 333 


63 


Salaries, allowances & benefits (political office bearers, councillors/senior 
managers)(Table SA23) 



Salary 

Pnntrihiitinnc Allowances 

Performance 

In-kind 

Total Package 

Disclosure of Salaries, Allowances & Benefits 1. 


uontiibutions 

Bonuses 

benefits 


Rand per annum 


1 . 



2. 

Councillors 






Speaker 

638 600 

(| 27 752 



666 352 

Chief Whip 

- 

-H 



- 

Executive Mayor 

798 251 

-111 27 752 



826 003 

Deputy Executive Mayor 

638 600 

-II 27 752 



666 352 

Executive Committee 

2 993 443 

138 758 



3 132 201 

Total for all other councillors 

r 4 550 025 

- r 638 287 



5 188 312 

Total Councillors 

9 618 919 

- i 860 301 



10 479 220 

Senior Manaqers of the Municipality 






Municipal Manager (MM) 

1 282 974 

28 237 f 197 350 

120 685 


1 629 246 

Chief Finance Officer 

857 218 

97 252 f 139 028 

87 480 


1 180 978 

Director Operational Services 

845 372 

131 985 i r 125 917 

88 262 


1 191 536 

Director Technical Services 

1 142 282 

1 910 T 171914 

105 288 


1 421 394 

Director Development Services 

928 901 

116 296 | 169 779 

97198 


1312174 

Director Corporate Services 

1 027 581 

94 392 | 99199 

97 694 


1 318 866 







Total Senior Managers of the Municipality 

6 084 328 

470 072 1 903 187 

596 607 


8 054 194 







TOTAL COSTOF COUNCILLOR, DIRECTOR and EXECUTIVE 







15 703 247 

470 072 ! 1 763 488 

596 607 


18 533 414 

REMUNERATION 







64 


Summary councillor and s 


aff benefits (Table SA22) 


Summary of Employee and Councillor 
remuneration 

R thousand 


2011/12 


Audited 

Outcome 


2012/13 


Audited 

Outcome 


2013/14 


Audited 

Outcome 




A 


B 


C 


D 


E 


F 


G 


H 


1 

Councillors (Political Office Bearers plus Other 



















Basic Salaries and Wages 


5 737 


6 037 


6 657 


8 623 


8623 

¥ 

8623 


9619 


10196 


10 808 

Pension and UIF Contributions 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Medical Aid Contributions 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Motor Vehicle Allowance 


1085 


1005 


1025 


- 


- 

¥ 

- 


- 


- 


- 

Cellphone Allowance 


346 


368 


522 


655 


655 

¥ 

655 


860 


912 


967 

Housing Allowances 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Olher benefits and allowances 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Sub Total -Councillors 


7168 


7 410 


8 203 


9 277 


9 277 


9 277 


10479 


11108 


11774 

% increase 




3.4% 


10.7% 


13.1% 


- 


- 


13.0% 


6.0% 


6.0% 

Senior Manaqers of the Municipalitv 



















Basic Salaries and Wages 


4 773 


3590 


5 280 


5 632 


5632 

¥ 

5632 

¥ 

6 084 

¥ 

6510 

¥ 

6 966 

Pension and UIF Contributions 


383 


384 


579 


619 


619 

¥ 

619 

¥ 

341 

¥ 

365 

¥ 

390 

Medical Aid Contributions 


92 


94 


145 


153 


153 

¥ 

153 

¥ 

129 

¥ 

138 

¥ 

148 

Overtime 


- 


- 


- 


- 


- 

¥ 

- 


- 

r 

- 

¥ 

- 

Performance Bonus 


580 


- 


614 


583 


583 

¥ 

583 

7 

597 

¥ 

638 

¥ 

683 

Motor Vehicle Allowance 


578 


443 


596 


638 


638 

¥ 

638 

¥ 

638 

¥ 

682 

¥ 

730 

Cellphone Allowance 


- 


233 


225 


95 


95 

¥ 

95 

¥ 

101 

¥ 

108 

¥ 

116 

Housing Allowances 


106 


18 


22 


23 


23 

¥ 

23 


23 

¥ 

25 

¥ 

26 

Olher benefits and allowances 


574 


93 


177 


72 


72 

¥ 

72 

¥ 

141 

¥ 

151 

¥ 

161 

Payments in lieu ofleave 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Long service awards 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Post-retirement benefit obligations 


- 


- 


- 


- 


- 

¥ 

- 


- 


- 


- 

Sub Total - Senior Managers of Municipality 


7 086 


4 856 


7 639 


7 815 


7815 


7815 


8 054 


8 618 


9 221 

% increase 




(31.5%) 


57.3% 


2.3% 


- 


- 


3.1% 


7.0% 


7.0% 

Other Municipal Staff 



















Basic Salaries and Wages 

r 

63 339 

¥ 

70 469 

¥ 

74 802 

7 

83949 

¥ 

84 091 

¥ 

84 091 

7 

92945 

¥ 

100407 

¥ 

109039 

Pension and UIF Contributions 

¥ 

11479 

¥ 

12 255 

¥ 

13338 

¥ 

17133 

r 

17147 

¥ 

17147 

¥ 

18890 

r 

20 367 

r 

22 069 

Medical Aid Contributions 

¥ 

3103 

¥ 

3 261 

r 

3 627 

¥ 

3755 

¥ 

3755 

¥ 

3755 

¥ 

4 342 

¥ 

4713 

¥ 

5115 

Overtime 

¥ 

3051 

¥ 

3199 

¥ 

4 265 

T 

3 685 

¥ 

3685 

¥ 

3685 

7 

4 621 

¥ 

5014 

¥ 

5440 

Performance Bonus 

¥ 


¥ 

- 

F 


r 


¥ 

- 

¥ 


¥ 

- 

¥ 

- 

¥ 

- 

Motor Vehicle Allowance 

¥ 

4 043 

¥ 

4 303 

r 

4 467 

¥ 

4 363 

¥ 

4 374 

¥ 

4 374 

¥ 

4 820 

¥ 

5144 

¥ 

5591 

Cellphone Allowance 

¥ 


¥ 

- 

r 


¥ 


¥ 

- 

¥ 


¥ 

- 

¥ 

- 

¥ 

- 

Housing Allowances 


563 

¥ 

522 

¥ 

489 

¥ 

511 

¥ 

511 

¥ 

511 

¥ 

556 

¥ 

603 

¥ 

655 

Olher benefits and allowances 


8121 

¥ 

5 650 

¥ 

8 993 

¥ 

10479 

¥ 

10484 

¥ 

10484 

¥ 

11631 

r 

12575 

r 

13658 

Payments in lieu ofleave 

¥ 

3744 

¥ 

- 

¥ 

1329 

¥ 

2 000 

¥ 

2 000 

¥ 

2 000 

¥ 

- 

¥ 

- 

¥ 

- 

Long service awards 

¥ 

470 

¥ 

542 

¥ 

607 

¥ 

1023 

¥ 

918 

¥ 

918 

¥ 

862 

¥ 

922 

¥ 

986 

Post-retirement benefit obligations 

¥ 

4179 

¥ 

4 669 

r 

5011 

7 

5 200 

¥ 

6 200 

¥ 

6 200 

¥ 

7000 

¥ 

7495 

¥ 

8026 

Sub Total - Other Municipal Staff 


102 092 


104869 


116 928 


132 099 


133165 


133165 


145667 


157 240 


170 580 

% increase 




2.7% 


11.5% 


13.0% 


0.8% 


- 


9.4% 


7.9% 


8.5% 

Total Parent Municipality 

116 346 

117135 

132 771 

149191 

150 258 

150 258 

164200 

176966 

191 576 

TOTAL SALARY, ALLOWANCES & BENEFITS 

116 346 

117135 

132 771 

149191 

150258 

150258 

164200 

176966 

191 576 

% increase 


0.7% 

13.3% 

12.4% 

0.7% 

- 

9.3% 

7.8% 

8.3% 

TOTAL MANAGERS AND STAFF 

109 179 

109 725 

124568 

139 914 

140 981 

140 981 

153721 

165858 

179 801 


Current Year 2014/15 


Original 

Budget 


Adjusted 

Budget 


Full Year 
Forecast 


2015/16 Medium Term Revenue & 
Expenditure Framework 


Budget Year 
2015/16 


Budget Year 
+1 2016/17 


Budget Year 
+2 2017/18 


65 


Summary of personnel numbers (Table SA24) 


Summary of Personnel Numbers 


2013/14 


Current Year 2014/15 

Budget Year 2015/16 

Number 

Positions 

Permanent 

employees 

Contract 

employees 

Positions 

Permanent 

employees 

Contract 

employees 

Positions 

Permanent 

employees 

Contract 

employees 

Municipal Council and Boards of Municipal Entities 










Councillors (Political Office Bearers plus Other Councillors) 

25 

- 

- 

25 

- 

- 

25 

- 

- 

Board Members of municipal entities 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Municipal employees 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Municipal Manager and Senior Managers 

6 

- 

6 

6 

- 

6 

6 

- 

6 

Other Managers 

21 

21 

- 

23 

23 

1 

23 

23 

- 

Professionals 

150 

150 

2 

150 

150 

2 

151 

151 

2 

Finance 

6 

6 

- 

6 

6 

- 

6 

6 

- 

Spatial/town planning 

6 

6 

- 

6 

6 

- 

7 

7 

- 

Information Technology 

2 

2 

2 

2 

2 

2 

2 

2 

2 

Roads 

28 

28 

- 

28 

28 

- 

28 

28 

- 

Electricity 

11 

11 

- 

11 

11 

- 

11 

11 

- 

Water 

45 

45 

- 

45 

45 

- 

45 

45 

- 

Sanitation 

16 

16 

- 

16 

16 

- 

16 

16 

- 

Refuse 

11 

11 

- 

11 

11 

- 

11 

11 

- 

Other 

25 

25 

- 

25 

25 

- 

25 

25 

- 

Technicians 

115 

7 115 

2 

115 

115 

2 

r 115 

115 

r 

Finance 

57 

57 

- 

57 

57 

- 

57 

57 

- 

SpatiaWown planning 










Information Technology 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Roads 

16 

16 

2 

16 

16 

2 

16 

16 

- 

Electricity 

Water 

Sanitation 

Refuse 










Other 

42 

42 

- 

42 

42 

- 

42 

42 

- 

Clerks (Clerical and administrative) 

44 

44 

- 

44 

44 

- 

44 

44 

- 

Service and sales workers 

68 

68 

- 

68 

68 

- 

68 

68 

- 

Skilled agricultural and fishery workers 

4 

4 

- 

4 

4 

- 

4 

4 

- 

Craf and related trades 










Plantand Machine Operators 

36 

36 

- 

36 

36 

- 

36 

36 

- 

Elementary Occupafons 

143 

143 

- 

165 

165 

- 

165 

165 


TOTAL PERSONNEL NUMBERS 

612 

581 

10 

636 

605 

11 

637 

606 

8 

% increase 




3.9% 

4.1% 

10.0% 

0.2% 

0.2% 

(27.3%) 

Total municipal employees headcount 










Finance personnel headcount 

57 

57 

- 

57 

57 

- 

57 

57 

- 

Human Resources personnel headcount 

6 

6 


6 

6 


6 

6 

- 


66 


13. Annual Budgets and Service delivery and Budget Implementation 
plans- Internal Departments 


The Functional performance of the municipality provides comprehensive information on the 
implementation of the SDBIP and the relevant Functional Area reporting schedule: 

a. A detailed departmental SDBIP will be available on the website of TWK Municipality. 


The functional breakdown per Directorate is as follows: 

Corporate Service: 

Legal Advisory 

• Both the Director and deputy Director Corporate Services are the Legal Officers for the 
organisation and provide legal support to all Directorates 

Administration 

• Give administrative support to the Council and its political structures 

• Corporate support for other Directorates and Town offices 

• Provision of secretariat services to all directorates 

• The management of the municipality’s incoming and outgoing mail including the 
distribution and dispatch of correspondence to and from the public 

• The management of access to records 

• The management of Security and Cleaning Services 
Human Resources 

• Ensuring a skilled workforce through training and selection 

• Ensuring sound HR administration 

• Ensuring an informed labour force by practicing sound labour relations 

• Ensuring a sound organisational structure 
Information Technology 

• The Information Technology department serves as support function for the whole of the 
organization: 

• Maintaining the IT and communication Infrastructure 

• Facilitate the integration of information systems 

• Establishing and maintaining proper backup procedures and systems 

• Ensuring information security 

Development Services: 

Integrated Development Planning 

This department provides a unique support service to all departments, community and 
council. It is responsible for the coordination and management of the IDP process, 
Organisational Performance Management, Annual Reporting, Service Delivery and Budget 
Implementation Plan, and Social Development 
Local Economic Development (LED) and Tourism 

• Create an enabling environment for economic development 

• Increase economic opportunities for people 


67 



• Promote intergovernmental collaboration 

• Build local Capacity 

• Encourage PPP in Local economic Development 

• Monitor and evaluate LED strategy. 

• Capacitate SMME’s 

Housing and Integrated Human Settlement 

• The function of this department is to facilitate, manage and maintain low cost housing 
development within the Theewaterskloof Municipality 

Property Management 

• The Property Management section has to ensure that Municipal owned immovable 
assets are managed efficiently, effectively and economically and are dealt with in a 
manner which will ensure the maximum benefit to the municipality and the community 

Financial Services: 

Expenditure and Supply Chain Management 

• Salaries: Implementation of approved payroll, paying of salaries, allowances and 
accounting for payroll implementation 

• Creditors: Payment and recording of creditors’ payments and reconciliations 

• Supply Chain Management: Responsible for the Administration and Management of 
Procurement of goods and services (i.e. Acquisition Management in particular) 

• Bank Reconciliation 

• Administration and Management of Investments 

• Administration and Management of Loans 

• Maintain Professionalism, Honesty, Integrity and Internal Controls 
Revenue Management 

• Facilitation and application for Municipal Services 

• Debtors Billing Administration and Management 

• Meter Reading 

• Administration of Clearance Certificates 

• Rendering of Monthly Consumer / Rates Debtors Accounts 

• Debtors Customer Care and Query Administration 

• Receipting and bank revenue management 

• Credit Control, Debt Collection and Indigents Management 

• Maintain Professionalism, Honesty, Integrity and Internal Controls 
Budget Office 

• Budget 

• In-year Reporting 

• Annual Financial Statements, 

• Budgetary Management and Control 

• Asset Management 

• Insurance Management 

• Costing Services (commenced in September 2009) 

• Financial Viability 

• Co-ordinate Financial Policy Formulation 


68 



• Financial Management Workshops under leadership of CFO 

• Maintain Professionalism, Honesty, Integrity and Internal Controls 

Technical Service: 

Water Distribution and Treatment 

• (Supply potable water in accordance with (SABS 241 ) to the residents within its 
jurisdiction. In terms of Schedule 4B of the Constitution: “Water and Sanitation Services 
limited to potable water supply systems”) 

Roads 

• The TheewaterskloofMunicipality is responsible for the roads and storm water 
reticulation within the towns of the WC031 established municipal area. The Roads and 
Storm water Division functions as a division on its own headed by the Assistant 
manager of each town. This unit has 85 trained technical, artisans and other operational 
staff 

Electricity Distribution 

The electricity purchase and distribution functions of the municipality are administered as 

follows and include: 

• The effective and efficient distribution and reticulation of energy in the following towns 
(Caledon, Villiersdorp, Greyton and Riviersonderend. Grabouw, Genadendal, 
Tesselaarsdal, Botrivierand Middleton reside within Eskom jurisdiction) 

• Distribute electricity subject to the license conditions set by NERSA 

Electricity/Street lighting 

• Provide adequate street lighting for urban areas 

• Maintain/Repair of faulty street lights 

• Upgrade of existing services as well as new developments 

• These services extend to include Theewaterskloof (Caledon, Greyton, Riviersonderend 
and Villiersdorp, but do not take account rural areas such as Tesselaarsdal, Botrivier, 
Grabouw, Genadendal which resides within the jurisdiction of provincial Government 

Waste Water Management (Sewerage) 

• TheewaterskloofMunicipality provides sewerage collection systems, comprising water 
borne sewer networks, bucket removal system and vacuum tanker service where 
necessary, and treats the collected effluent at 7 sewage treatment plants. Further 
services include the provision and maintenance of communal toilets in informal areas 

Solid Waste Management 

• Theewaterskloof municipality is responsible for the day to day operations in every town 
and for the removal and collection of the waste, cleaning of road reserves and most 
public open places. There are three Transfer-stations in the Municipal jurisdiction, one 
in Grabouw, Villiersdorp and the other in Botriver. Caledon has a licensed waste site but 
Genadendal, Greyton and Riviersonderend is not permitted yet. 

FleetManagement 

• To manage and maintain all fleet of the municipality. 

• To provide sufficient municipal services to all residence within the municipal boundary. 

OPERATIONS 

• Responsible for the day-to-day to service delivery within all Theewaterskloof Towns. 


69 



Senior Management Capability and Structure 



70 













14. Capital expenditure details 


In terms of the municipality’s Supply Chain Management Policy, no contracts are awarded 
beyond the medium-term revenue and expenditure framework (three years). In ensuring 
adherence to this contractual time frame limitation, all reports submitted to either the Bid 
Evaluation and Adjudication Committees must obtain formal financial comments from the 
Financial Management Division of the Treasury Department. 


Capital Budget 

The capital budget per function, town and per funding source is illustrated below: 


The Capital Budget decreased from R85, 177m in 2014/15 (adjustment) to R60, 973m in 
2015/16, R51 , 731 m in 2016/17 and R53, 714 in 2017/2018. 


CAPITAL PER FUNCTION 


2015/2016 

Sewerage 

Water 

Roads 

Electricity 

Solid Waste 

OPERATIONAL 

TECHNICAL 

HOUSING 

FLEET 

DEVELOPMENT 

CORPORATE SERVICES 

LIBRARIES 

IT 

SPORT 

Land & Building 

TRAFFIC 

FINANCE 

22 500 OOO 

4 526 281 

3 800 OOO 

11 637 284 

3 OOO OOO 

1 597 195 

158 300 

8 900 OOO 

2 OOO OOO 

21 OOO 

252 600 

235 600 

852 OOO 

796 716 

400 OOO 

257 565 

38 378 


60 972 919 

CAPITAL PER TOWN 

CAPITAL PER TOWN 

2015/2016 

CALEDON 

12 970 500 

GRABOUW 

13 608 837 

VILLIERSDORP 

19 618 842 

RIVIERSONDEREND 

7 730 581 

GREYTON/GENADENDAL 

945 OOO 

TESSELAARSDAL 

1 596 716 

TWK 

4 502 443 


60 972 919 


CAPITAL SOURCES 

CAPITAL SOURCES 

2015/2016 

MIG 

21 821 930 

NEP 

4 385 965 

RBIG 

3 508 772 

CRR 

2 815 243 

HOUSING GRANT 

8 900 000 

SURPLUS 

7 991 009 

LOANS 

11 550 000 


60 972 919 




CAPITAL PER TOWN 2OM/201S 


lv> llV 


I Al 1 SIM 
.'1 



71 




The table below reflects the 2015 Division of Revenue Act Grant Allocations 


GRANT ALLOCATIONS 2015/2016 



NATIONAL ALLOCATIONS 



GRANT 


2015/2016 



2016/2017 

2017/2018 


BUDGET 

EXCL VAT 

VAT 

BUDGET 

Budget 



R'000 



R'000 

R'000 

EQUITABLE SHARE 


63 909 000 

- 

- 

68 752 000 

74 003 000 

EQUITABLE SHARE FORMULA 

OPEX 

63 909 000 

- 

- 

68 752 000 

74 003 000 

SPECIAL SUPPORT FOR COUNCILLOR REMUNERATION 

OPEX 

- 

- 

- 


- 

FINANCIAL MANAGEMENT GRANT (FMG) 

OPEX 

1 600 000 

1 403 509 

196 491 

1 625 000 

1 700 000 

MUNICIPAL SYSTEMS IMPROVEMENT GRANT (MSIG) 

OPEX 

930 000 

815 790 

114 210 

957 000 

1 033 000 

MUNICIPAL INFRASTUCTURE GRANT (MIG) 


25 627 000 



26 517 000 

27 852 000 

OPERATING 

OPEX 

750 000 

750 000 

- 

- 

- 

CAPITAL 

CAPEX 

24 877 000 

21 821 930 

3 055 070 

26 517 000 

27 852 000 

INTEGRATED NATIONAL ELECTRIFICATION PROGRAMME GRANT (NEP) 

CAPEX 

5 000 000 

4 385 965 

614 035 

7 000 000 

7 000 000 

EXPANDED PUBLIC WORKS PROGRAMME (EPWP) 

OPEX 

1 086 000 





REGIONAL BULK INFRASTRUCTURE GRANT (BIG) 

CAPEX 

4 000 000 

3 508 772 

491 228 

- 

- 

TOTAL NATIONAL GRANTS 


102 152 000 

32 685 966 

4 471 034 

104 851 000 

Ill 588 000 

PROVINCIAL ALLOCATIONS 

INTEGRATED HOUSING & HUMAN SETTLEMENT DEVELOPMENT GRANT 


63 643 000 



52 300 000 

45 150 000 

INTEGRATED HOUSING: OPERATIONAL 

OPEX 

54 743 000 

- 

- 

44 986 234 

38 836 108 

INTEGRATED HOUSING: CAPITAL 

CAPEX 

8 900 000 

- 

- 

7 313 766 

6 313 892 

LIBRARY SERVICES 

OPEX 

6 539 000 

- 

- 

6 931 000 

1 348 000 

COMMUNITY DEVEOPMENT WORKER OPERATIONAL SUPPORT GRANT (CDW) 

OPEX 

126 000 



133 000 

139 000 

MAINTENANCE OF PROCLAIMED ROADS 

OPEX 

114 000 

- 

- 

- 

- 

VPUU 

OPEX 

500 000 



1 000 000 

3 000 000 

THUSONG CENTRE (OPERATIONAL) 

OPEX 

212 000 



246 000 

260 000 

TOTAL PROVINCIAL GRANTS 


71 134 000 


- 

60 610 000 

55 897 000 

OTHER GRANT PROVIDERS 

HAN 

OPEX 

- 

- 

- 

- 

- 

SETA 

OPEX 

1 644 590 



1 743 265 

1 847 861 

TOTAL OTHER GRANT PROVIDERS 


1 644 590 

- 

- 

1 743 265 

1 847 861 


GRAND TOTAL 


174 930 590 



167 204 265 

169 332 861 








NOTE: Allocations for Conditional Grants are only made for one year and the 
amounts published for the outer years in the schedules of the Division of 
Revenue Act (DORA) are published for indicative purposes only and are not 

OPEX 

132 153 590 



126 373 499 

128 166 969 

CAPEX 

42 777 000 



40 830 766 

41 165 892 

TOTAL 

174 930 590 



167 204 265 

169 332 861 

guarenteed. 


Nations I Grants 



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72 


15. Capital expenditure details 


The following three tables present details of the Theewaterskloofs capital expenditure 
programme, firstly on new assets, then the renewal of assets and finally on the repair and 
maintenance of assets. 

Capital expenditure on new assets by asset class (Table SA34a) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Audited 

Audited 

Original 

Adjusted 


Full Year 

Budget Year 

Budget Year 

Budget Year 

Outcome 

Outcome 

Outcome 

Budget 

Budget 


Forecast 

2015/16 

+1 2016/17 

+2 2017/18 

Capital expenditure on new assets by Asset Class/S ub-class 










Infrastructure 

34 964 

37 278 

36 202 

26 864 

35 129 


35 129 

32 057 

25 731 

13214 

Infrastructure - Road transport 

- 

- 

- 

- 

- 

- 

3 800 

16 917 

5 400 

Roads, Pavements & Bridges 

- 

- 

- 

- 

- 


- 

800 

16917 

5 400 

Storm water 

- 

- 

- 

- 

- 


- 

3 000 

- 

- 

Infrastructure - Electricity 

5 216 

3 672 

2 196 

3 900 

3 900 


3 900 

8 830 

- 

- 

Generation 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Transmission & Reticulation 

5 216 

3 672 

1 293 

3 900 

3 900 


3 900 

8 000 

- 

- 

Street Lighting 

- 

- 

903 

- 

- 


- 

830 

- 

- 

Infrastructure - Water 

4 105 

297 

7 077 

- 

- 


- 

4 026 

- 

- 

Dams & Reservoirs 

- 

- 

- 

- 

- 


- 

3 526 

- 

- 

Water purification 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Water Reticulation 

4 105 

297 

7 077 

- 

- 


- 

500 

- 

- 

Infrastructure - Sanitation 

2 653 

196 

9 962 

- 

- 


- 

6 500 

1 500 

1 500 

Sewerage Reticulation 

2 653 

196 

- 

- 

- 


- 

6 500 

1 500 

1 500 

Sewerage purification 

- 

- 

9 962 

- 

- 


- 

- 

- 

- 

Infrastructure - Other 

22 989 

33 113 

16 967 

22 964 

31 229 


31 229 

8 900 

7 314 

6 314 

Waste Management 

808 

- 

- 

- 

- 


- 

- 

- 

- 

Transportation 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Gas 

_ 

_ 

_ 

_ 

_ 


_ 

_ 

_ 

_ 

Other 

22 182 

33 113 

16 967 

22 964 

31 229 

r 

31 229 

8 900 

7 314 

6 314 

Community 


3 258 

5 625 

3 286 

12 319 

12 319 

797 

4 000 


Parks & gardens 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Sportslields & stadia 

- 

- 

3 309 

3 286 

11 245 


11 245 

797 

4 000 

- 

Swimming pools 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Community halls 

- 

3 258 

2 316 

- 

280 


280 

- 

- 

- 

Libraries 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Recreational facilities 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Fire, safety & emergency 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Security and policing 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Buses 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Clinics 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Museums & Art Galleries 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Cemeteries 

- 

- 

- 

- 

794 


794 

- 

- 

- 

Social rental housing 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Heritaqe assets 










Buildings 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Investment properties 


1 187 








Housing development 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

1 187 

- 

- 

- 


- 

- 

- 

- 

Other assets 

5 150 

3 378 

3 866 

3 398 

4 897 

4 897 

6 000 



General vehicles 

1 026 

- 

- 

- 

1 000 

1 000 

2 000 

- 

- 

Specialised vehicles 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Plant & equipment 

- 

- 


- 

- 


- 

- 

- 

- 

Computers - hardware/equipment 

- 

- 

- 

584 

584 


584 

852 

- 

- 

Furniture and other office equipment 

2 688 

1 630 

2 449 

2 634 

2 823 


2 823 

2 748 

- 

- 

Abattoirs 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Markets 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Civic Land and Buildings 

664 

847 

1 417 

180 

490 


490 

- 

- 

- 

Other Buildings 

- 

170 

- 

- 

- 


- 

- 

- 

- 

Other Land 

- 

- 

- 

- 

- 


- 

400 

- 

- 

Surplus Assets - (Investment or Inventory) 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

772 

731 

- 

- 

- 


- 

- 

- 

- 

Agricultural assets 










List sub-class 


- 


- 

- 

r 



- 

- 

Bioloqical assets 










List sub-class 

" 



" 

" 

r 

- 


" 

" 

Intanqibles 










Computers - software & programming 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other (list sub-class) 

- 

- 

- 

- 

- 


- 

- 

- 

- 











Total Capital Expenditure on new assets 

40 114 

45 101 

45 693 

33 548 

52 345 

52 345 

38 853 

29 731 

13214 


73 


Capital expenditure on renewal of existing assets by asset class (Table SA34b) 


Description 

R thousand 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 

Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Capital expenditure on renewal of existing assets by Asset Class/Sub-class 









Infrastructure 

24 071 

42 527 

16 718 

33 609 

32106 


32106 

22120 

22 000 

40 500 

Infrastructure - Road transport 

4 528 

8 296 

5192 

3 263 

4 588 

4 588 

- 

- 

- 

Roads, Pavements & Bridges 

4 528 

8 296 

5192 

3 263 

4 588 


4 588 

- 

- 

- 

Storm water 

- 

- 

- 

- 



- 

- 

- 

- 

Infrastructure - Electricity 

- 

4 221 

1 843 

2 500 

4 220 


4 220 

2 620 

- 

- 

Generation 

- 

- 

- 

- 


■ 

- 

- 

- 

- 

Transmission & Reticulation 

- 

4 221 

1 843 

2 500 

4 220 


4 220 

2 620 

- 

- 

Street Lighting 

- 

- 

- 

- 



- 

- 

- 

- 

Infrastructure - Water 

6 626 

8 762 

1 039 

9 242 

5 379 


5 379 

500 

3 000 

- 

Dams & Reservoirs 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Water purification 

- 

- 

- 

- 



- 

- 

- 

- 

Water Reticulation 

6 626 

8 762 

1 039 

9 242 

5 379 


5 379 

500 

3 000 

- 

Infrastructure - Sanitation 

12918 

20 901 

8 644 

18 604 

17 920 


17 920 

16 000 

19 000 

40 500 

Sewerage Reticulation 

- 

- 

- 

18 604 

17 920 


17 920 

16 000 

19 000 

40 500 

Sewerage purification 

12918 

20 901 

8 644 

- 



- 

- 

- 

- 

Infrastructure - Other 

- 

347 

- 

- 



- 

3 000 

- 

- 

Waste Management 

- 

347 

- 

- 


r 

- 

3 000 

- 

- 

Transportation 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Gas 

" 

“ 

— 

" 



" 

" 

“ 

" 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Community 


695 








Parks & gardens 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Sportsfields & stadia 

- 

695 

- 

- 



- 

- 

- 

- 

Swimming pools 

- 

- 

- 

- 



- 

- 

- 

- 

Community halls 

- 

- 

- 

- 



- 

- 

- 

- 

Libraries 

- 

- 

- 

- 



- 

- 

- 

- 

Recreational facilities 

- 

- 

- 

- 



- 

- 

- 

- 

Fire, safety & emergency 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Security and policing 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Buses 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Clinics 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Museums & Art Galleries 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Cemeteries 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Social rental housing 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Heritage assets 










Buildings 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Investment properties 










Housing development 

- 

- 

- 

- 

- 


- 

- 

- 

r 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other assets 

713 


536 

390 

726 

726 




General vehicles 

- 

- 

216 

- 

- 

- 

- 

- 

- 

Specialised vehicles 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Plant & equipment 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Computers - hardware/equipment 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Furniture and other office equipment 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Abattoirs 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Markets 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Civic Land and Buildings 

713 

- 

320 

390 

726 


726 

- 

- 

- 

Other Buildings 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other Land 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Surplus Assets - (Investment or Inventory) 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Agricultural assets 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

List sub-class 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Biological assets 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

_ 

List sub-class 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Intangibles 










Computers - software & programming 

- 

- 

- 

- 


w 

- 

- 

- 

- 

Other (list sub-class) 

- 

- 

- 

- 



- 

- 

- 

- 











Total Capital Expenditure on renewal of existing asse 

24 784 

43 221 

17 254 

33 999 

32 832 

32 832 

22 120 

22 000 

40 500 


74 


Repairs and maintenance expenditure by asset class (Table SA34c) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 

R thousand 

Audited 

Audited 

Audited 

Original 

Adjusted 


Full Year 

Budget Year 

Budget Year 

Budget Year 

Outcome 

Outcome 

Outcome 

Budget 

Budget 


Forecast 

2015/16 

+1 2016/17 

+2 2017/18 

Repairs and maintenance expenditure by Asset Class/S ub-class 









Infrastructure 

6 568 

7 996 

7 003 

11 307 

10 851 


10 851 

12 003 000.00 

14 713 

15 596 

Infrastructure - Road transport 

2 397 

3 731 

3 714 

4 855 

5 685 

5 685 

5 323 

5 491 

5 820 

Roads, Pavements & Bridges 

2 397 

3 731 

3 714 

4 855 

5 685 

S' 

5 685 

5 323 

5 491 

5 820 

Storm water 

- 

- 

- 

- 



- 

- 

- 

- 

Infrastructure - Electricity 

1 593 

907 

167 

2 700 

980 


980 

2 680 

4 982 

5 281 

Generation 

- 

- 

- 

- 



- 

- 

- 

- 

Transmission & Reticulation 

1 593 

907 

167 

2 700 

980 


980 

2 680 

4 982 

5 281 

Street Lighting 

- 

- 

- 

- 



- 

- 

- 

- 

Infrastructure - Water 

1 210 

1 659 

1 490 

1 662 

1 733 


1 733 

1 716 

1 819 

1 928 

Dams & Reservoirs 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Water purification 

- 

- 

- 

- 



- 

- 

- 

- 

Reticulation 

1 210 

1 659 

1 490 

1 662 

1 733 


1 733 

1 716 

1 819 

1 928 

Infrastructure - Sanitation 

1 280 

1 617 

1 514 

1 946 

2 309 


2 309 

2138 

2 266 

2 402 

Reticulation 

- 

- 

- 

- 



- 

- 

- 

- 

Sewerage purification 

1 280 

1 617 

1 514 

1 946 

2 309 


2 309 

2138 

2 266 

2 402 

Infrastructure - Other 

89 

82 

119 

144 

144 


144 

147 

155 

165 

Waste Management 

- 

- 

- 

- 



- 

- 

- 

- 

Transportation 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Gas 

- 

- 

- 

- 



- 

- 

- 

- 

Other 

89 

82 

119 

144 

144 


144 

147 

155 

165 

Community 

1 096 

764 

737 

900 

950 

950 

1 100 

1 166 

1 236 

Parks & gardens 

1 096 

764 

737 

900 

950 

■ 

950 

1 100 

1 166 

1 236 

Sportsfields & stadia 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Swimming pools 

- 

- 

- 

- 



- 

- 

- 

- 

Community halls 

- 

- 

- 

- 



- 

- 

- 

- 

Libraries 

- 

- 

- 

- 



- 

- 

- 

- 

Recreational facilities 

- 

- 

- 

- 


w 

- 

- 

- 

- 

Fire, safety & emergency 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Security and policing 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Buses 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Clinics 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Museums & Art Galleries 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Cemeteries 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Social rental housing 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Heritage assets 










Buildings 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Other 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Investment properties 










Housing development 

- 

- 

- 

- 

- 


- 


- 

- 

Other 

- 

- 

- 

- 

- 


- 


- 

- 

Other assets 

7 889 

9 089 

10 672 

10 699 

11 378 

11 378 

13 310 

14108 

14 955 

General vehicles 

3 051 

3 895 

3 308 

4 291 

4 635 

4 635 

5 091 

5 396 

5 720 

Specialised vehicles 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Plant & equipment 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Computers - hardware/equipment 

- 

- 

- 

- 

- 


- 

- 

- 

- 

Furniture and other office equipment 

78 

228 

79 

186 

186 


186 

271 

288 

305 

Abattoirs 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Markets 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Civic Land and Buildings 

4 704 

4 902 

7 180 

6125 

6 459 


6 459 

7 797 

8 265 

8 761 

Other Buildings 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Other Land 

- 

- 

- 

- 



- 

- 

- 

- 

Surplus Assets - (Investment or Inventory) 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Other 

56 

64 

105 

98 

98 


98 

150 

159 

169 

Agricultural assets 

. 

_ 

. 

_ 

. 

_ 

. 

_ 

_ 

List sub-class 

- 

- 

- 

- 


f 

T 

- 


- 

- 

Biological assets 

_ 

_ 

_ 

_ 

_ 

_ 

. 

_ 

_ 

List sub-class 

- 

- 

- 

- 


r 

- 

- 

- 

- 

Intangibles 










Computers - software & programming 

- 

- 

- 

- 


f 

- 

- 

- 

- 

Other (list sub-class) 

- 

- 

- 

- 


r 

- 

- 

- 

- 











Total Repairs and Maintenance Expenditure 

15 553 

17 849 

18 412 

22 906 

23179 

23179 

26 413 

29 987 

31 787 


75 


Capital expenditure details (Table SA36) 


Municipal Vote/Capital project 

R thousand 

Program/Project description 

Asset Class 

3 

Asset Sub-Class 

3 

GPS co-ordinates 

5 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Project information 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Ward location 

New or renewal 

Parent municipality: 










List all capital projects grouped by Munici/. 

oal Vote 









Vote 1 - Executive & Council 











Upgrading offleet 

Other assets 

General vehicles 


2 000 

- 

- 

All 

New 


Inventory Items - Technial Services 

Other assets 

Furniture and other office equipment 


158 

- 

- 

All 

New 


Inventory Items - Cali 

Other assets 

Furniture and other office equipment 

-34.23204, 19.42918 

351 

- 

- 

Caledon 

New 


Inventory Items - Greyton/ Genadendal 

Other assets 

Furniture and other office equipment 


145 

- 

- 

Greyton/ Genadendal 

New 


Inventory Items - Corporate 

Other assets 

Furniture and other office equipment 


253 

- 

- 

All 

New 


Inventory Items - Grabouw 

Other assets 

Furniture and other office equipment 


794 

- 

- 

Grabouw 

New 


Inventory Items - Riviersonderend 

Other assets 

Furniture and other office equipment 


104 

- 

- 

Riviersonderend 

New 


Inventory Items - Villiersdorp 

Other assets 

Furniture and other office equipment 


204 


- 

Villiersdorp 

New 

Vote 2 - Finance & Admin 











Inventory Items - Finance 

Other assets 

Furniture and other office equipment 


38 


- 

All 

New 


Inventory Items - IT 

Other assets 

Computers - hardware/equipment 


852 

- 

- 

All 

New 


Inventory Items - Internal Audit 

Other assets 

Furniture and other office equipment 


- 

- 

- 

All 

New 

Vote 3 - Planning & Development 











Extention 12 Infrastructure Contribution 

Other assets 

Other Land 


400 

- 

- 

Caledon 

New 


Inventory Items 

Other assets 

Furniture and other office equipment 


21 

- 

- 

All 

New 

Vote 4 - Community & Social Services 











Inventory Items - Library 

Other assets 

Furniture and other office equipment 


236 

- 

- 

All 

New 

Vote 5 - Housing 











Low cost housing projects 

Infrastructure - Other 

Other 


- 

7 314 

6 314 

All 

New 


Low cost housing projects - Caledon 

Infrastructure - Other 

Other 

34°14'44. 71 "S: 1 9° 25 '35. 29" E 

- 

- 

- 

Caledon 

New 


Low cost housing projects - Grabouw 

Infrastructure - Other 

Other 

34° 09' 44. 1 4 "S: 1 8° 59 '38.71 "E 

5 400 

- 

- 

Grabouw 

New 


Low cost housing projects - Villierdorp 

Infrastructure - Other 

Other 

33°59'10.02"S:19°17'33.96"E 

- 

- 

- 

Villersdorp 

New 


Low cost housing projects - 










Riviersonderend 

Infrastructure - Other 

Other 

34°08'42.86"S:1 9°55'24.99"E 

3 500 

- 


Riviersonderend 

New 

Vote 6 - Public Safety 











Inventory Items - Traffic 

Other assets 

Furniture and other office equipment 


258 

- 

- 

All 

New 

Vote 7 - Sport & Recreation 











New Sport Facility Phase 1 

Community 

Sportsfields & stadia 

34°09’18.60”S: 19°00’01.42"E 

797 


- 

Tesselaarsdal 

New 


Sport Facilit 



34 °22’45. 85” S: 1 9 °32 '35. 98”E 


4 000 


Grabouw 

Renewal 

Vote 9 - Waste Management 











Extention of Waste Transfer Station 

Infrastructure - Other 

Waste Management 


3 000 


- 

Grabouw 

Renewal 


76 



Municipal Vote/Capital project 


Asset Class 

Asset Sub-Class 

GPS co-ordinates 

2015/16 Medium Term Revenue & Expenditure 
Framework 

Project information 


Program/Project description 










R thousand 


3 

3 

5 

Budget Year 
2015/16 


Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

Ward location 

New or renewal 

Parent municipality: 










Vote 10 - Waste Water Management 











Upgrading of Waste Water Treatment 











Works (housing) 

Infrastructure - Sanitation 

Reticulation 


500 


3 000 

24 500 

Caledon 

Renewal 


Upgrade Main Outfall sewer 

Infrastructure - Sanitation 

Reticulation 


3 000 


16 000 

16 000 

Caledon 

Renewal 


Upgrade Waste Water Treatment Works 

Infrastructure - Sanitation 

Reticulation 


12 500 


- 

- 

Villiersdorp 

Renewal 


housing 

Infrastructure - Sanitation 

Reticulation 


2 500 


- 

- 

Villiersdorp 

New 


Grabouw Waste Water T reatment Plant 

Infrastructure - Sanitation 

Reticulation 


4 000 




Grabouw 

New 


Upgrade Waste Water Treatment Works 





' 

3 000 


Riviersonderend 

Renewal 


New Waste Transfer Station 






1 500 

- 

Caledon 

New 


New Solid Waste Transfer Station 







1 500 

Riviersonderend 

New 

Vote 11 - Roads Transport 












New StormWater Infrastructure, Phukom 

Infrastructure - Road transport 

Storm water 


3 000 


_ 

_ 

Villiersdorp 

New 


Access Road 

Infrastructure - Road transport 

Roads, Pavements & Bridges 


800 


1 000 

200 

Tesselaarsdal 

New 


Upgrade Streets 






2 800 

1 200 

Caledon 

Renewal 


Upgrade Main Road Old Cape Road 






9 117 


Grabouw 

Renewal 


Upgrade Streets 






1 000 

1 000 

Villiersdorp 

Renewal 


Heuwelkroon 






1 000 

1 000 

Greyton 

Renewal 


Upgrade Streets 






1 000 

1 000 

Botrivier 

Renewal 


Upgrade Streets 






1 000 

1 000 

Riviersonderend 

Renewal 

Vote 12 - Water 












New water connector pipe, Phukom 
housing 

Infrastructure - Water 

Reticulation 


500 


_ 

_ 

Villiersdorp 

New 


Upgrade Bulk Water Storage Capacity - 











New Reservoir 

Infrastructure - Water 

Dams & Reservoirs 


3 526 


- 

- 

Riviersonderend 

New 


Repair and Replace Water pre-paid 
meters 

Infrastructure - Water 

Reticulation 


500 


- 

- 

TWK 

Renewal 

Vote 13 - Electricity 












New cable belween Aandblom & 

Veldblomtuin sub-stations 

Infrastructure - Electricity 

Transmission & Reticulation 


3 000 




Caledon 

New 


Replace switch station do Human & V 
Riebeeck street 

Infrastructure - Electricity 

Transmission & Reticulation 


720 




Caledon 

Renewal 


High masl/Street lights 

Infrastructure - Electricity 

Street Lighting 


415 


- 

- 

Grabouw 

New 


High masl/Street lights 

Upgrade overhead line, Caledon & Unie 

Infrastructure - Electricity 

Street Lighting 


415 




Villiersdorp 

New 


Avenue 

Infrastructure - Electricity 

Transmission & Reticulation 


500 


- 

- 

Villiersdorp 

Renewal 


Infrastructure: Santa, Site Siviwa, 




V 







Riemvasmaak 

Infrastructure - Electricity 

Transmission & Reticulation 


5 000 


- 

- 

Villiersdorp 

New 


Upgrade Network, Main Street 

Infrastructure - Electricity 

Transmission & Reticulation 


800 


- 

- 

Greyton/Genadendal 

Renewal 


Upgrade Buitekant Street Phase II 

Infrastructure - Electricity 

Transmission & Reticulation 


600 


- 

- 

Riviersonderend 

Renewal 


Inventory Items 

Other assets 

Furniture and other office equipment 


187 




All 

New 

Parent Capital expenditure 





60 973 

51 731 

53 714 



Total Capital expenditure 



60 973 

51 731 

53 714 



77 



16. Legislation Compliance Status 


Compliance with the MFMA Implementation requirements has been substantially adhered to 
through the following activities: 

■ Budget and Treasury Office: A Budget and Treasury Office has been established in 
accordance with the MFMA. 

■ Budgeting: The annual budget is prepared in accordance with the requirements 
prescribed by the MFMA and National Treasury. 

■ Financial Reporting: 100% compliance with regards to monthly, quarterly and annual 
reporting to the Executive Mayor, Mayoral Committee, Council, Provincial and National 
Treasury. 

■ Annual Report: The Annual Report is prepared in accordance with the MFMA and 
National Treasury. 

■ Debt Collection: A Debt Collection unit has been established in accordance with the 
relative legislation. The staff appointments in the Debt Collection Department have 
almost been completed and the department is fully functional. Debt collection 
restructuring is also scheduled for 2015/16 to improve the efficiency of the unit and 
ensure collections and credit control is done at optimal levels. 

■ Internal Audit: The department is fully functional with a Deputy Director, Internal 
Auditor and a Clerk Internal Audit in order to comply with the MFMA and obtain value 
for money. 

■ Supply Chain Management: A Functional Supply Chain Management Unit in 
accordance with the MFMA. 

■ Risk Management: TheewaterskloofMunicipality has adopted a Risk Management 
Policy in August 2009 and official has undergone training. A risk register is compile 
which identify the top ten risks and is reviewed and monitor regularly. 

■ Asset Management: The Fixed Asset Register is fully GRAP compliant and the Asset 
Maintenance Plan is in progress in order to comply with legislation. 

■ Internship Programme: Theewaterskloof Municipality is participating in the Municipal 
Finance Management Internship Programme. Five Interns are employed and are 
undergoing various training in all sections of the Finance Department. 


78 



17. Other supporting documents 


a. Tariff list 

Refer to Annexure A for a list of tariffs to be approved. 

b. Supplementary notes to tables 

Supporting detail to budgeted financial performance (Table SA1) 


Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Mediun 

Term Revenue 
F ramewo rk 

& Expenditure 

R thousand 

Audited 

Outcome 

Audited 

Outcome 

Audited 

Outcome 

Original 

Budget 

Adjusted 

Budget 

Full Year 
Forecast 

Budget Year 
2015/16 

Budget Year 
+1 2016/17 

Budget Year 
+2 2017/18 

REVENUE ITEMS: 

Property rates 










T otal Properly Rates 
/ess Revenue Foregone 

44 091 

1 993 

49 680 
2 073 

59 516 
843 

68 910 

68 910 

68 910 

75 213 

79 726 

r 85 184 

Net Property Rates 

42 099 

47 607 

58 673 

68 910 

68 910 

68 910 

75 213 

79 726 

85 184 

Service charqes - electricity revenue 










Total Service charges - electricity revenue 

58 351 

61 745 

66 451 

74 398 

70 771 

70 771 

79 520 

87 312 

96 043 

less Revenue Foregone 

972 

1 376 

1 857 

1 488 

1 488 

1 488 

1 562 

1 656 

1 755 

Net Service charges - electricity revenue 

57 379 

60 369 

64 594 

72 911 

69 284 

69 284 

77 958 

85 656 

94 288 

Service charqes - water revenue 










Total Service charges - water revenue 

37 459 

f 37 200 

39 417 

47 055 

49 627 

49 627 

60 847 

64 498 

69 012 

less Revenue Foregone 

2 204 

2 295 

2 331 

6 918 

6 918 

6 918 

7 594 

8 050 

8 533 

Net Service charges - water revenue 

35 255 

34 904 

37 087 

40 136 

42 709 

42 709 

53 252 

56 448 

60 479 

Service charqes - sanitation revenue 










Total Service charges - sanitation revenue 

17 927 

21 564 

23 730 

25 898 

26 907 

26 907 

26 789 

28 397 

30 526 

less Revenue Foregone 

3 304 

3 538 

3 746 

5 651 

5 651 

5 651 

5 933 

6 289 

6 666 

Net Service charges - sanitation revenue 

14 623 

18 025 

19 983 

20 248 

21 257 

21 257 

20 856 

22 107 

23 860 

Service charqes - refuse revenue 










Total refuse removal revenue 

20 277 

23 190 

25 517 

30 202 

30 202 

30 202 

34 812 

36 901 

40 038 

Total landfill revenue 

— 

— 

— 

— 

— 

— 

— 

— 

— 

less Revenue Foregone 

4 203 

4 730 

4 794 

7 407 

7 407 

7 407 

8 963 

9 501 

10 071 

Net Service charges - refuse revenue 

16 074 

1 8 460 

20 723 

22 795 

22 795 

22 795 

25 849 

27 400 

29 967 

Other Revenue bv source 










Other Revenue 

2 806 

3 506 

4 523 

4 645 

3 535 

3 535 

3 623 

3 840 

4 071 

Public Contributions & Donations 

569 

1 364 

167 

- 

- 

- 

- 

- 

- 

Third party payments 

2 062 

401 

227 

318 

670 

670 

334 

354 

375 

Fair value adjustment 

7 030 

22 517 

28 143 

— 

— 

— 

— 

— 

— 

Reversal of Debt Impairment 










Total ’Other’ Revenue 

1 2 467 

27 788 

33 060 

4 963 

4 205 

4 205 

3 957 

4 194 

4 446 

EXPENDITURE ITEMS: 

Employee related costs 










Basic Salaries and Wages 

68 1 12 

74 059 

80 082 

89 581 

89 723 

89 723 

99 029 

106 917 

116 005 

Pension and UIF Contributions 

11 862 

12 639 

13 917 

17 753 

17 766 

17 766 

19 231 

20 731 

22 459 

Medical Aid Contributions 

3 195 

3 355 

3 772 

3 908 

3 908 

3 908 

4 471 

4 851 

5 263 

Overtime 

3 051 

3 199 

4 265 

3 685 

3 685 

3 685 

4 621 

5 014 

5 440 

Performance Bonus 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Motor Vehicle Allowance 

4 621 

4 746 

5 063 

5 001 

5 012 

5 012 

5 458 

5 826 

6 321 

Cellphone Allowance 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Housing Allowances 

669 

540 

511 

534 

534 

534 

579 

628 

681 

Other benefits and allowances 

9 275 

5 976 

10 010 

11 228 

11 234 

11 234 

12 470 

13 473 

14 618 

Payments in lieu of leave 

3 744 

— 

1 329 

2 000 

2 000 

2 000 

— 

— 

— 

Long service awards 

470 

542 

607 

1 023 

918 

918 

862 

922 

986 

Post-retirement benefit obligations 

4 179 

4 669 

5 01 1 

5 200 

6 200 

6 200 

7 000 

7 495 

8 026 

sub-total 

109 179 

109 725 

124 568 

139 914 

140 981 

140 981 

153 721 

165 858 

179 801 

Less: Employees costs capitalised to RRE 

- 

- 

- 

_ 

- 

_ 

_ 

_ 

- 

Total Employee related costs 

109 179 

109 725 

124 568 

139 914 

140 981 

140 981 

153 721 

165 858 

179 801 

Contributions recoqnised - capital 










List contributions by contract 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total Contributions recognised - capital 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Depreciation & asset impairment 










Depreciation of Property, Plant & Equipment 

8 029 

8 466 

10 284 

17 571 

17 571 

17 571 

17 571 

18 625 

19 743 

Lease amortisation 

— 

— 

— 

— 

— 

— 

— 

— 

— 

Capital asset impairment 

41 291 

89 845 

22 532 

5 510 

9 510 

9 510 

9 510 

10 081 

10 685 

Depreciation resulting from revaluation of PPE 










Total Depreciation & asset impairment 

49 320 

98 31 1 

32 816 

23 081 

27 081 

27 081 

27 081 

28 706 

0 428 

Bulk purchases 










Electricity Bulk Purchases 

34 770 

37 759 

41 426 

44 029 

44 470 

44 470 

50 903 

53 957 

57 195 

Water Bulk Purchases 

6 704 

7 575 

8 617 

10 621 

10 621 

10 621 

11 350 

12 031 

12 753 

Total bulk purchases 

41 475 

45 334 

50 043 

54 651 

55 091 

55 091 

62 253 

65 988 

69 948 

Transfers and qrants 










Cash transfers and grante 

638 

783 

824 

1 000 

1 000 

1 000 

1 000 

1 060 

1 124 

Non-cash transfers and grants 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total transfers and grants 

638 

783 

824 

1 000 

1 000 

1 000 

1 000 

1 060 

1 124 

Contracted services 










Contracted Services 

6 897 

9 812 

1 1 825 

12 982 

12 282 

12 282 

13 793 

14 621 

15 498 

Computer Services & licences 

1 931 

2 110 

2 899 

3 655 

3 000 

3 000 

3 820 

4 049 

4 292 

Dumping fee Karwyderskraal 

839 

768 

928 

1 216 

1 216 

1 216 

4 753 

5 038 

5 340 

Caledon dumping site 

708 

854 

848 

900 

1 300 

1 300 

900 

954 

1 01 1 

Refuse removal Tesselaarsdal & Myddleton 

173 

158 

176 

200 

200 

200 

300 

318 

337 

Copier costs 

324 

353 

340 

291 

306 

306 

255 

271 

287 

Valuation costs 

287 

1 114 

704 

328 

300 

300 

466 

494 

524 

Grabouw Sustainable Plan 

150 

105 

29 

150 

142 

142 

100 

106 

112 

sub-total 

11 308 

1 5 273 

1 7 749 

1 9 721 

1 8 746 

1 8 746 

24 388 

25 851 

27 402 

Allocations to organs of state: 










Electricity 

- 

- 

- 

- 

- 

- 

- 

- 

— 

Water 

— 

— 

— 

— 

— 

— 

— 

— 

— 

Sanitation 

- 

- 

- 

- 

— 

- 

- 

- 

— 

Other 

— 

— 

— 

— 

— 

— 

— 

— 

— 

Total contracted services 

11 308 

1 5 273 

1 7 749 

19 721 

1 8 746 

1 8 746 

24 388 

25 851 

27 402 

Other Expenditure By Type 










Collection costs 

— 

— 

— 

— 

- 

— 

— 

— 

— 

Contributions to 'other' provisions 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Consultant fees 

— 

— 

— 

— 

— 

— 

— 

— 

— 

Audit fees 

2 489 

1 835 

2 340 

2 638 

2 800 

2 800 

2 750 

2 915 

3 090 

General expenses 

18 257 

25 029 

55 661 

23 517 

24 792 

24 792 

24 013 

24 553 

26 026 

Repairs & Maintenance 

15 553 

17 849 

18 412 

22 906 

23 179 

23 179 

26 413 

29 987 

31 787 

Streetlights 

189 

350 

490 

2 939 

1 550 

1 550 

3 135 

3 324 

3 523 

Operating Grant Expenditure 

15 360 

r - 

- 

29 309 

46 930 

46 930 

59 169 

49 170 

45 204 

Services 

4 362 

4 808 

5 286 

4 826 

4 883 

4 883 

5 589 

5 924 

6 279 

Actuarial losses 

423 

257 

4 183 

650 

4 100 

4 100 

4 100 

4 346 

4 607 

Total "Other" Expenditure 

56 635 

50 129 

86 372 

86 784 

1 08 233 

1 08 233 

125 168 

120 219 

120 516 


79 


Supporting detail to Statement o 

: Financial Posi 

tion (Table SA3) 

Description 

2011/12 

2012/13 

2013/14 

Current Year 2014/15 

2015/16 Medium Term Revenue & Expenditure 
Framework 















Audited 

Audited 

Audited 

Original 

Adjusted 


Full Year 

Budget Year 

Budget Year 

Budget Year 


Outcome 

Outcome 

Outcome 

Budget 

Budget 


Forecast 


2015/16 


+1 2016/17 


+2 2017/18 

R thousand 














ASSETS 

Call investment deposits 










Call deposits < 90 days 

15 042 

20 740 

26 967 

- 

30 000 

r 

30 000 

r 

20 000 

r 

10 000 

¥ 

20 000 

Other current investments > 90 days 

- 

- 

- 

- 

- 

r 

- 


- 


- 


- 

Total Call investment deposits 

15 042 

20 740 

26 967 

- 

30 000 


30 000 


20 000 


10 000 


20 000 

Consumer debtors 














Consumer debtors 

121 594 

r 142 033 

136 419 

87 469 

110175 

r 

110175 


136 205 


163 795 


193 042 

Less: Provision for debt impairment 

T (104 517) 

r (114 934) 

r (108 674) 

r (45 818) 

r (86 227) 

r 

(86 227) 

r 

(102 972) 

¥ 

(136 622) 

¥ 

(172 290) 

Total Consumer debtors 

17 077 

27 099 

27 745 

41 651 

23 948 


23 948 


33 232 


27174 


20 751 

Debt impairment provision 














Balance at the beginning of the year 

90 029 

r 104 517 

r 114 934 

82 088 

108 674 

r 

108 674 

r 

86 227 

¥ 

102 972 

¥ 

136 622 

Contributions to the provision 

31 171 

21 942 

47 825 

23 730 

37 553 

r 

37 553 

r 

31 745 

¥ 

33 650 

¥ 

35 669 

Bad debts written off 

(16 682) 

(11 525) 

(54 085) 

(60 000) 

(60 000) 

r 

(60 000) 


(15 000) 





Balance at end of year 

104 517 

114 934 

108 674 

45 818 

86 227 


86 227 


102 972 


136 622 


172 290 

Property, plant and equipment (PPE) 














PPE at cost/valuation (excl. finance leases) 

T 522 732 

r 637 623 

730 375 

764 792 

815 552 

w 

815 552 

¥ 

876 525 

¥ 

928 255 

¥ 

981 969 

Leases recognised as PPE 

339 

362 

362 

362 

362 

r 

362 

r 

362 

¥ 

362 

¥ 

362 

Less: Accumulated depreciation 

74 513 

81 277 

90 043 

227 083 

107 294 

r 

107 294 

¥ 

124 545 

¥ 

140 868 

¥ 

158 170 

Total Property, plant and equipment (PPE) 

448 559 

556 708 

640 694 

538 070 

708 620 

708 620 

752 341 

787 749 

824161 

LIABILITIES 

Current liabilities ■ Borrowinq 










Shortterm loans (other than bank overdraft) 

- 

- 

- 

- 

- 

r 

- 


- 


- 


- 

Current portion of long-term liabilities 

6 518 

6 979 

6 974 

8 338 

6 974 


6 974 


8 338 


8 312 


9 223 

Total Current liabilities - Borrowing 

6 518 

6 979 

6 974 

8 338 

6 974 


6 974 


8 338 


8 312 


9 223 

Trade and other payables 














Trade and other creditors 

23 441 

39 665 

39 388 

32 694 

35 936 

r 

35 936 

r 

37 623 

¥ 

38 010 

¥ 

39 954 

Unspent conditional transfers 

7 554 

5 529 

1 312 

- 

- 

r 


¥ 

- 

¥ 

- 

¥ 

- 

VAT 

951 

1 637 

1 355 

1 637 

1 355 


1 355 


1 355 


1 355 


1 355 

Total Trade and other payables 

31 946 

46 831 

42 055 

34 331 

37 292 


37 292 


38 979 


39 366 


41 309 

Non current liabilities - Borrowinq 














Borrowing 

112 661 

105 724 

110 091 

102 948 

114 095 

r 

114 095 

¥ 

117 307 

¥ 

108 996 

¥ 

102 991 

Finance leases (including PPP asset element) 

86 

65 

- 

32 

- 




- 


- 


- 

Total Non current liabilities - Borrowing 

112 747 

105 788 

110 091 

102 980 

114 095 


114 095 


117 307 


108 996 


102 991 

Provisions - non-current 














Retirement benefits 

28 744 

30 574 

38161 

38 077 

39 631 

r 

39 631 

r 

45 321 

V 

51 506 

¥ 

58 222 

List other major provision items 










Refuse landfill site rehabilitation 

23 898 

24 980 

25 965 

26 080 

25 965 

r 

25 965 

r 

27 265 

¥ 

28 643 

¥ 

30104 

Other 

3 521 

4192 

4 572 

5 026 

4 704 

r 

4 704 

r 

5 077 

¥ 

5 509 

¥ 

6 004 

Total Provisions - non-current 

56163 

59 746 

68 698 

69183 

70 300 

70 300 

77 663 

85 658 

94 330 

CHANGES IN NET ASSETS 

Accumulated Surplus/fDeficit) 










Accumulated Surplus/( Deficit) - opening balance 

486 643 

r 460 590 

r 491 253 

397 882 

543 871 

r 

543 871 

r 

587 701 

r 

607 389 

¥ 

619 542 

GRAP adjustments 

(8 691) 

16 632 

- 

- 

- 


- 


- 


- 


- 

Restated balance 

477 952 

477 222 

491 253 

397 882 

543 871 


543 871 


587 701 


607 389 


619 542 

Surplus/( Deficit) 

(17 346) 

14 530 

58 618 

46 985 

43 656 


43 656 


16 873 


12153 


17 063 

Appropriations to Reserves 

(16) 

(500) 

(6 000) 

(1 570) 

(1 570) 

r 

(1 570) 


- 


- 


- 

Transfers from Reserves 

- 

- 

- 

- 

1 744 


1 744 


2815 


- 


- 

Depreciation offsets 

- 

- 

- 

- 

- 


- 


- 


- 


- 

Other adjustments 

(0) 

0 

(0) 

- 

- 


- 


- 


- 


- 

Accumulated Surplus/(Deficit) 

Reserves 

460 590 

491 253 

543 871 

443 297 

587 701 

587 701 

607 389 

619 542 

636 605 

Housing Development Fund 

- 

- 

- 

- 

- 

r 

- 


- 


- 


- 

Capital replacement 

- 

500 

6 500 

2 967 

6 326 


6 326 


3511 


3511 


3511 

Self-insurance 

- 

- 

- 

- 

- 


- 


- 


- 


- 

Other reserves 

55 

55 

55 

55 

55 

r 

55 

r 

55 

¥ 

55 

¥ 

55 

Revaluation 

11423 

41 091 

81 275 

41 091 

81 275 


81 275 


81 275 


81 275 


81 275 

Total Reserves 

11 478 

41 647 

87 830 

44114 

87 656 

87 656 

84 841 

84 841 

84 841 

TOTAL COMMUNITY WEALTH/EQUITY 

472 068 

532 899 

631 701 

487 411 

675 358 

675 358 

692 231 

704 383 

721 446 


80 


Total Municipal Account 

The effect of the proposed tariff and rate increases on households is illustrated below: 


Benchmarking Households based on 2014-15 tariffs 


Monthly Account for Household -"Middle Income" 

Property Value: R 1,364,000 

Water: 30 kl. Electricity lOOOkwh 

Rates and services charges: 

Current 

2014-15 

New 

Tariff 

Rand 

difference 

Percentage 

increase 

Property rates 

825.70 

903.83 

78.13 

9.5% 

Electricity: Basic levy 

42.31 

47.47 

5.16 

12.2% 

Electricity: Consumption 

1399.00 

1566.88 

167.88 

12.0% 

Water: Basic levy 

75.53 

80.82 

5.29 

7.0% 

Water: Consumption 

222.81 

238.41 

15.60 

7.0% 

Sanitation 

102.63 

111.87 

9.24 

9.0% 

Refuse removal 

106.75 

123.83 

17.08 

16.0% 

Other 





sub-total 

2774.73 

3073.1 1 

298.38 


VAT on Services 

272.86 

303.70 

30.84 


Total bill: 

3 047.59 

3 376.81 

329.21 

10.8% 


Monthly Account for Household -"Affordable Ra 

Property Value: R 719,000 

Water: 15 kl. Electricity 489kw h 

nge" 


Rates and services charges: 

Ourre nt 

2014-15 

New 

Tariff 

Ra nd 

diffe re nee 

Pe rce nta ge 
i ncrease 

Property rates 

430.91 

471 .68 

40.77 

9.5% 

Electricity: Basic levy 

42.31 

47.47 

5.16 

12.2% 

Electricity: Consumption 

574.94 

643.93 

68.99 

12.0% 

Water: Basic levy 

75.53 

80.82 

5.29 

7.0% 

Water: Consumption 

68.91 

73.73 

4.82 

7.0% 

Sanitation 

102.63 

111 .87 

9.24 

9.0% 

Refuse removal 

106.75 

123.83 

17.08 

16.0% 

Other 





sub-tota 1 

1401 .98 

1 553.33 

151 .35 

10.8% 

VAT on Services 

135.95 

1 51 .43 

15.48 

1 1 .4% 

Total bill: 

1537.93 

1704.76 

166.83 

10.8% 


Monthly Account for Household -"Indiqent" 

Household receivinq free basic services 

Property Value: R 122.000 

Water: 6 kl. Electricity 70kwh 

Rates and services charges: 

Current 

2014-15 

New 

Tariff 

Ra nd 

difference 

Perce ntage 
increase 

Property rates 

65.49 

71 .69 

6.20 

9.5% 

Electricity: Basic levy 

0.00 

0.00 



Electricity: Consumption 

0.00 

0.00 



Water: Basic levy 

0.00 

0.00 



Water: Consumption 

0.00 

0.00 



Sanitation 

0.00 

0.00 



Refuse removal 

0.00 

0.00 



Other 





sub-total 

65.49 

71 .69 

6.20 

9.5% 

VAT on Services 





Total bill: 

65.49 

71 .69 

6.20 

9.5 % 


81 





18. Municipal manager’s quality certificate 


I. H.S.D. WALLCE , Municipal Manager of Theewaterskloof Municipality (WC031) , hereby 
certify that the Annual Budget and supporting documentation have been prepared in 
accordance with the Municipal Finance Management Act and the regulations made under the 
Act, and that the Annual Budget and supporting documents are consistent with the Integrated 
Development Plan of the Municipality. 


Print Name: HS D Wallace 

Municipal Manager of: Theewaterskloof Municipality (WC031) 


Signature: 

Date: 28 May 2015 


Print Name: D Louw 


Chief Financial Officer of: Theewaterskloof Municipality (WC031) 


Signature: 

Date: 28 May 2015 


82