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KAI !GARIB 
MUNICIPALITY 



KAI !G A RI B 


M U N1EJI RA L1TOT-M Li NI C I PAS.ITT 


DRAFT BUDGET REPORT 
MTREF 2018/2019 






INDEX 


Glossary.2 

PART 1 - Annual BUDGET.4 

Section 1 - Mayor’s Report.4 

Section 2 - Budget Related Resolutions.5 

Section 3 - Executive Summary.7 

Section 4 - Operating Budget Summary.10 

Section 5 - Capital Budget Item List.21 

Section 6 - Municipal Manager’s quality certification.22 


1 | Page 











Glossary 

Adjustments Budget - Prescribed in section 28 of the MFMA. The formal means 
by which a municipality may revise its annual budget during the year. 

Allocations - Money received from Provincial or National Government or other 
municipalities. 

Budget - The financial plan of the Municipality. 


Budget Related Policy - Policy of a municipality affecting or affected by the 
budget, examples include tariff policy, rates policy and credit control and debt 
collection policy. 

Capital Expenditure - Spending on assets such as land, buildings and 
machinery. Any Capital expenditure must be reflected as an asset on the 
Municipality’s balance sheet. 

Cash flow statement - A statement showing when actual cash will be received 
and spent by the Municipality. Cash payments do not always coincide with 
budgeted expenditure timings. For example, when an invoice is received by the 
Municipality it is shown as expenditure in the month it is received, even though it 
may not be paid in the same period. 

DORA - Division of Revenue Act. Annual legislation that shows the total 
allocations made by national to provincial and local government. 

Equitable Share - A general grant paid to municipalities. It is predominantly 
targeted to help with free basic services. 

Fruitless and wasteful expenditure - Expenditure that was made in vain and 
would have been avoided had reasonable care been exercised. 

GFS - Government Finance Statistics. An internationally recognised classification 
system that facilitates like for like comparison between municipalities. 

GRAP - Generally Recognised Accounting Practice. The new standard for 
municipal accounting. 

IDP - Integrated Development Plan. The main strategic planning document of the 
Municipality 

KPI’s - Key Performance Indicators. Measures of service output and/or outcome. 

MFMA - The Municipal Finance Management Act - No. 53 of 2003. The principle 
piece of legislation relating to municipal financial management. 


2 | Page 



MTREF - Medium Term Revenue and Expenditure Framework. A medium term 
financial plan, usually 3 years, based on a fixed first year and indicative further 
two years budget allocations. Also includes details of the previous and current 
years’ financial position. 

Net Assets - Net assets are the residual interest in the assets of the entity after 
deducting all its liabilities. This means the net assets of the municipality equates 
to the "net wealth" of the municipality, after all assets were sold/recovered and all 
liabilities paid. Transactions which do not meet the definition of Revenue or 
Expenses, such as increases in values of Property, Plant and Equipment where 
there is no inflow or outflow of resources are accounted for in Net Assets. 

Operating Expenditure - Spending on the day to day expenses of the 
Municipality such as salaries and wages. 

Rates - Local Government tax based on the assessed value of a property. To 
determine the rates payable, the assessed rateable value is multiplied by the rate 
in the rand. 

SDBIP - Service Delivery and Budget Implementation Plan. A detailed plan 
comprising quarterly performance targets and monthly budget estimates. 

Strategic Objectives - The main priorities of the Municipality as set out in the 
IDP. Budgeted spending must contribute towards the achievement of the strategic 
objectives. 

Unauthorised expenditure - Generally, spending without, or in excess of, an 
approved budget. 

Virement - A transfer of budget. 

Vote - One of the main segments of a budget. The structure is for reporting 
requirements and links the accounting performance both to the IDP and to the 
responsible officials. 


3 | Page 



PART 1 


ANNUAL BUDGET 


Section 1 - Mayor’s Report 

Introduction: 


It is with great pleasure that I present the 2018/2019 Draft Budget to the Councii for 
consideration. 

The budget tabied does not meet the requirements yet, however we strive towards a 
budget that complies with the latest budget regulations as well as the requirements of 
the National Treasury. The municipality continues to refine the budgeting processes, 
for which I must thank the Chief Financial Officer and his staff for the tremendous 
effort. 

The reason for the tabling of a draft original budget is fully disclosed in the executive 
summary of the draft budget documentation. Unfortunately, I must report that the 
municipality is in a dire cash flow position and unless drastic measures, including full 
cooperation from the Councii and the Management team, are being taken, the 
municipality’s sustainability is in serious doubt. 

Municipal Budget Circular for the 2018/19 MTREF (MFMA Circular No. 91) stated that 
municipalities must adopt a conservative approach when projecting their expected 
revenues and cash receipts. Municipalities were also requested to pay particular 
attention to managing all revenue and cash streams effectively and carefully evaluate 
all spending decisions. 

During the review of the financial status of the municipality undertaken in the drafting 
of the mid-year report, it became clear that further attention would have to be paid to 
managing the cash streams of the municipality more effectively and that all spending 
decisions will have to undergo even stricter evaluations to ensure that funds are spent 
only on necessities and that the spending is economic, efficient and effective. 

Legal requirements: 

The Local Government Municipal Finance Management Act, 2003, Chapter 4, and the 
Municipal Budget and Reporting Regulations, Government Gazette 32141, 17 April 
2009 requires that the Budget comply with the following legislation: 

Annual budgets 


16. (1) The councii of a municipality must for each financial year approve an annual 
budget for the municipality before the start of that financial year. 

(2) In order for a municipality to comply with subsection (1), the mayor of the 
municipality must table the annual budget at a councii meeting at least 90 days 
before the start of the budget year. 


4 | Page 



(3) Subsection (1) does not preclude the appropriation of money for Capital 
expenditure for a period not exceeding three financial years, provided a separate 
appropriation is made for each of those financial years. 


Contents of annual budgets and supporting documents 


17. (1) An annual budget of a municipality must be a Schedule in the prescribed 
format¬ 
fa) setting out realistically anticipated revenue for the budget year from 
each revenue source; 

(b) appropriating expenditure for the budget year under the different votes 
of the municipality; 

(c) setting out indicative revenue per revenue source and projected 
expenditure by vote for the two financial years following the budget year; 

(d) setting out- 

(i) estimated revenue and expenditure by vote for the current year; 
and 

(ii) actual revenue and expenditure by vote for the financial year 
preceding the current year; and 

(e) a statement containing any other information required by section 215(3) 
of the Constitution or as may be prescribed. 


(2) An annual budget must generally be divided into a Capital and an operating 
budget in accordance with international best practice, as may be prescribed. 

(3) When an annual budget is tabled in terms of section 16(2), it must be 
accompanied by the following documents: 

(a) Draft resolutions- 

(i) approving the budget of the municipality; 

(ii) imposing any municipal tax and setting any municipal tariffs as 
may be required for the budget year; and 

(iii) approving any other matter that may be prescribed; 

(b) measurable performance objectives for revenue from each source and for 
each vote in the budget, taking into account the municipality’s integrated 
development plan; 

(c) a projection of cash flow for the budget year by revenue source, broken 
down per month; 


(d) any proposed amendments to the municipality’s integrated development 
plan following the annual review of the integrated development plan in 
terms of section 34 of the Municipal Systems Act; 

(e) any proposed amendments to the budget-related policies of the 
municipality; 


5 | Page 



(f) particulars of the municipality’s investments; 

(g) any prescribed budget information on municipal entities under the sole 
or shared Control of the municipality; 

(h) particulars of all proposed new municipal entities which the municipality 
intends to establish or in which the municipality intends to participate; 

(i) particulars of any proposed service delivery agreements, including 
material amendments to existing service delivery agreements; 

(j) particulars of any proposed allocations or grants by the municipality to¬ 

ti) other municipalities; 

(ii) any municipal entities and other external mechanisms assisting the 
municipality in the exercise of its functions or powers; 

(iii) any other organs of State; 

(iv) any organisations or bodies referred to in section 67(1); 

(k) the proposed cost to the municipality for the budget year of the salary, 
allowances and benefits of— 

(i) each political office-bearer of the municipality; 

(ii) councillors of the municipality; and 

(iii) the municipal manager, the chief financial officer, each senior 
manager of the municipality and any other official of the municipality 
having a remuneration package greater than or equal to that of a 
senior manager; 

(l) the proposed cost for the budget year to a municipal entity under the sole 
or shared Control of the municipality of the salary, allowances and benefits 
of- 

(i) each member of the entity’s board of directors; and 

(ii) the chief executive officer and each senior manager of the entity; 
and 

(m) any other supporting documentation as may be prescribed. 


Section 2 - Budget Related Resolutions 

ORIGINAL BUDGET 2018/19 


The resolution tabled at Council for consideration with approval of the draft budget for 
2018/19 is: 


RECOMMENDATION: 

It is recommended: 

1) that the Council approves the Draft Budget for the MTREF 2018/19 


6 | Page 



2) That the Directors put control measures in place to prevent any over- 
expenditure on the Operational and Capital Budget 

3) That the Service Delivery Budget and Implementation Plan (SDBIP) be 
adjusted accordingly and approved in line with the legislative requirements 

4) That the Council take note of contents in the 2018/19 draft original budget and 
budget tables as set out in the schedules contained in Section 4: 

a. Table Al 2018/19 Budget Summary 

b. Table A2 2018/19 Budget Financial Performance (Standard 

Classification) 

c. Table A3 2018/19 Budget Financial Performance (Revenue & 

Expenditure by Municipal Vote 

d. Table A4 2018/19 Budget Financial Performance (Revenue & 

Expenditure 

e. Table A5 2018/19 Capital Expenditure Budget by Vote and 

Funding 

f. Table A6 2018/19 Budget Financial Position 

g. Table A7 2018/19 Budget Cash Flow 

i. Table A8 2018/19 Budget Cash Backed Reserves 


5) That the Budget of KAI IGARIB Municipality for the MTREF 2018/19 as set out 
in the summary be approved: 

(i) Total Revenue R231 232 mil 

(ii) Total Expenditure R231 232 mil 

(iii) Total Capital budget R 25 934 mil 

6) That it will be noted that there are no changes to any budget related policies. 

7) That the Directors put control measures in place to prevent any over- 
expenditure on the Operational and Capital Budget. 

8) That the Service Delivery Budget and Implementation Plan (SDBIP) be 
adjusted accordingly and be approved in line with the legislative requirements. 


7 | Page 



Section 3 - Executive Summary 

Introduction 


The budget tabled compiled within the formats prescribed in the new Budget 
Regulations. 

The main components proposed in this budget are as follows: 

Operating Budget 


Operating Revenue 


Operational Revenue bySource 


120,000 
100,000 
80,000 
60,000 
40,000 
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1) Total operational revenue budget amounting to R 231 232 million. 

The income comprises of: 

a. Property Rates - Annual budget for 2018/19 amounts to R22 080 mil. 

b. Service Charges (Electricity, Water, Sanitation & Refuse) amounts to 
R115 472 mil. Forecasting based on the actual consumption of the 
last 12 months from March 2017 until February 2018. With mSCOA, 
the classification of Connection and Re-connection fees is now part of 
Service Charges and no longer other revenue. 


8 |Page 









c. Rental of facilities and equipment amounts to R69 000. Forecasting 
based on the actual revenue collected in the last 12 months. 

d. Interest earned - external investments. Due to the current cash flow 
situation the municipality had to withdraw from the existing external 
investments, hence the budget of R28 000. 

e. Interest earned - outstanding debtors. A debt collection unit has been 
established and is functioning effectively, the interest charged on 
outstanding debtors is budgeted at R9 397 mil. 

f. Fines and penalties budgeted at R52 000 and is based on actual 
revenue received for the first 8 months of the 2017/2018 financial 
year. 

g. Licenses & Permits - The function of renewing of vehicle licenses was 
moved to the Post Office, hence the budgeted amount of RI 405 mil. 

h. Other Revenue - With mSCOA, the classification of Connection and 
Re-connection fees that is now part of Service Charges and no longer 
other revenue which reduced other revenue to a budgeted amount of 
with R479 000. 

i. Operational Grants budgeted at R82 250mil is based on the 
aliocations within the Division of Revenue Bill of 9 February 2018. 


9 | Page 



Operating Expenditure 


Operational Expenditure by Type 


140,000,000 
120,000,000 
100 , 000,000 
80,000,000 
60,000,000 
40,000,000 
20,000,000 





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i Budget Year 2018/19 ■ Budget Year 2019/20 ■ Budget Year 2020/21 


2) Total operational expenditure budget amounting to R 231 232 million. 

The expenditure comprises of: 

a. Employee related cost budget of RI 01 837 mil. There were only budgeted 
for the 468 warm bodies currently employed at the municipality. 

b. Remuneration of councillor’s is budgeted at R7 009 mil with the gazetted 
increase of councillor’s remuneration and upper limits taken into account. 

c. Debt impairment budgeted at RI 9 217 mil. Due to lack of payments by 
consumers on their outstanding accounts this amount is unavoidable. 
Management should insure that the established debt collection is 
functioning effectively during the financial year. 

d. Depreciation budgeted at R3 166 mil. The condition of the municipality’s 
assets contributed to the budgeted amount. 

e. Finance charges budgeted at RI 590 mil. Due to signed re-payment and 
debt acknowledgement agreements with some of our mayor creditors, 
interest in not charged on arrear accounts. 

f. Bulk purchases budgeted at R58 656 mil. Eskom is main contributor to 
the bulk purchases budgeted amount, of R55 715 mil (94.99%). 


10 | Page 






g. Repairs and maintenance are budgeted for to an amount of R6 586 mil. 
The condition of the municipality’s assets contributed to the budgeted 
amount. 

h. Contracted services are budgeted for to an amount of R9 940 mil. 
Security services was the main contributor of the municipality’s 
contracted services. The contract with the security company was 
terminated in November 2017. 

i. Other expenditure are budgeted for to an amount of R23 230 mil. 


Capital Budget 

The municipality budgeted for planned Capital expenditure R25 934 mil. The Capital 
budget consists only of projects funded by the municipality’s grant allocations because 
of the lack of surplus funds for other Capital assets. 


Capital Grants 

Description 

2018/19 

2019/20 

2020/21 

Municipal Infrastructure Grant (MIG) 

20,934,200 

21,295,200 

22,293,650 

Water Services Infrastructure Grant (WSIG) 

5,000,000 

- 

- 

Regional Bulk Infrastructure Grant (RBIG) 

- 

10,000,000 

12,125,000 

Integrated National Electrification Programme Grant (INEP) 

- 

1,920,000 

1,920,000 

TOTAL 

25,934,200 

33,215,200 

36,338,650 


11 | Page 














Section 4 - Budget Tables 

Table Al 2018/19 Budget Summary 


NC082 !Kai! Garib - Table Al Budget Summary 


Description 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousands 

Original 

Budget 

Adjusted 

Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

Financial Performance 






Property rates 

18,355 

20,636 

22,080 

23,273 

24,553 

Serv ice charges 

110,610 

113,468 

115,472 

121,707 

128,401 

Investment revenue 

169 

95 

28 

30 

31 

Transfers recognised - operational 

68,635 

67,498 

82,250 

88,148 

96,805 

Other own revenue 

12,239 

11,277 

11,402 

13,101 

15,565 


210,008 

212,974 

231,232 

246,258 

265,356 

Total Revenue (excluding Capital transfers and contributions) 






Employee costs 

95,673 

103,215 

101,837 

108,266 

115,071 

Remuneration of councillors 

6,260 

6,246 

7,009 

7,491 

8,003 

Depreciation & asset impairment 

1,892 

- 

3,166 

8,051 

15,558 

Finance charges 

1,890 

1,248 

1,590 

1,108 

1,134 

Materials and bulk purchases 

55,859 

65,970 

65,242 

68,765 

72,548 

Transfers and grants 

- 

- 

- 

- 

- 

Other expenditure 

46,935 

36,935 

52,387 

52,576 

53,041 

Total Expenditure 

"208^508/ 

213,614 

231,232 

246,258 

265,356 

Surplus/(Deficit) 

1,500 

(640) 

- 

- 

- 

Transfers and subsidies - Capital (monetary allocations) (National / Provincial and District) 

35,407 

36,544 

25,934 

33,215 

36,339 

Contributions recognised - Capital & contributed assets 

- 

- 

- 

- 

- 


36,907 

35,904 

25,934 

33,215 

36,339 

Surplus/(Deficit) after Capital transfers & contributions 






Share of surplus/ (deficit) of associate 

- 

- 

- 

- 

- 

Surplus/(Deficit) for the year 

36,907 

35,904 

25,934 

33,215 

36,339 

Capital expenditure & funds sources 






Capital expenditure 

36,907 

35,407 

25,934 

33,215 


Transfers recognised - Capital 

35,407 

35,407 

25,934 

33,215 

36,339 

Public contributions & donations 

- 

- 

- 

- 

- 

Borrow ing 

- 

- 

- 

- 

- 

Internally generated funds 

1,500 

- 

- 

- 

- 

Total sources of Capital funds 

36,907 

35,407 

25,934 

33,215 

36,339 

Financial position 






Total current assets 

36,142 

36,142 

57,487 

68,893 

78,868 

Total non current assets 

868,005 

866,703 

810,918 

809,953 

797,450 

Total current liabilities 

104,892 

104,892 

231,714 

205,699 

193,330 

Total non current liabilities 

62,139 

62,139 

85,069 

88,310 

95,027 

Community wealth/Equity 

737,116 

735,813 

551,622 

584,838 

587,961 

Cash flows 






Net cash from (used) operating 

38,798 

35,904 

(24,448) 

(17,814) 

(12,859) 

Net cash from (used) investing 

(36,907) 

- 

67 

- 

- 

Net cash from (used) financing 

- 

- 

- 

- 

- 

Cash/cash equivalents at the year end 

1,891 

35,904 

(18,136) 

(35,950) 

(48,809) 

Cash backinq/surplus reconciliation 






Cash and investments available 

2,148 

2,148 

1,607 

1,306 

946 

Application of cash and investments 

58,547 

58,462 

198,793 

169,582 

154,748 

Balance - surplus (shortfall) 

(56,399) 

(56,314) 

(197,186) 

(168,276) 

(153,802) 

Asset manaqement 






Asset register summary (WDV) 

861,983 

860,681 

804,709 

803,940 

791,505 

Depreciation 

1,892 

- 

3,166 

8,051 

15,558 

Renewal of Ex isting Assets 

- 

- 

- 

- 

- 

Repairs and Maintenance 

3,455 

3,597 

2,649 

2,792 

2,946 

Free services 






Costof Free Basic Services provided 

- 

- 

- 

- 

- 

Revenue costof free services provided 

- 

- 

- 

- 

- 

Households below minimum service level 






Water: 

- 

- 

- 

- 

- 

Sanitation/sew erage: 

- 

- 

- 

- 

- 

Energy: 

- 

- 

- 

- 

- 

Refuse: 

- 

- 

- 

- 

- 


12 | Page 



















































Table A2 


2018/19 Budget Financial Performance (Standard Classification) 


NC082 !Kai! Garib - Table A2 Budgeted Financial Performance (revenue and expenditure by functional classification) 


Functional Classification Description 

Ref 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousand 

1 

Original 

Budget 

Adj usted 
Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 I 

Budget Year 

+2 2020/21 

Revenue - Functional 







Governance and administration 


94,078 

96,172 

111,522 

121,756 i 

134,014 

Executive and council 


3,982 

3,982 

4,185 

4,393 

4,601 

Finance and administration 


90,096 

92,190 

107,337 

117,363 

129,413 

Internal audit 


- 

- 

- 


- 

Community and public safety 


1,240 

1,055 

77 

81 1 

86 

Community and social services 


1,020 

1,019 

39 

41 

43 

Sport and recreation 


220 

36 

38 

40 

42 

Public safety 


- 

- 

- 


- 

Housing 


- 

- 

- 


- 

Health 


- 

- 

- 


- 

Economic and environmental services 


3,009 

2,391 

23,514 

23,974 1 

25,110 

Planning and development 


1,309 

1,203 

22,074 

22,456 

23,509 

Road transport 


1,699 

1,188 

1,440 

1,518 

1,601 

Environmental protection 


- 

- 

- 


- 

Trading services 


147,089 

149,900 

122,049 

133,659 i 

142,480 

Energy sources 


80,143 

82,274 

77,128 

83,213 | 

87,684 

Water management 


38,807 

39,206 

19,951 

19,397 

20,464 

Waste water management 


20,227 

20,349 

16,579 

22,205 

25,001 

Waste management 


7,912 

8,070 

8,391 

8,844 | 

9,331 

Other 

4 

- 

- 

- 


- 

Total Revenue - Functional 

2 

245,415 

249,517 

257,162 

279,470 1 

301,690 

Expenditure - Functional 







Governance and administration 


66,699 

67,831 

69,052 

78,270 | 

90,340 

Executive and council 


13,333 

15,848 

15,145 

16,134 

17,218 

Finance and administration 


52,148 

50,818 

52,935 

61,108 

72,035 

Internal audit 


1,217 

1,165 

971 

1,027 | 

1,087 

Community and public safety 


9,879 

10,917 

11,054 

11,799 i 

12,528 

Community and social services 


7,174 

7,726 

7,470 

7,987 

8,486 

Sport and recreation 


1,204 

1,533 

1,501 

1,593 

1,686 

Public safety 


- 

” 

- 


- 

Housing 


636 

1,137 

1,249 

1,338 

1,426 

Health 


866 

520 

834 

881 

931 

Economic and environmental services 


13,349 

13,415 

13,698 

14,548 i 

15,431 

Planning and development 


10,724 

10,710 

11,001 

11,670 

12,401 

Road transport 


2,625 

2,705 

2,698 

2,877 i 

3,031 

Environmental protection 


- 

- 

- 


- 

Trading services 


118,222 

120,979 

136,958 

141,141 i 

146,511 

Energy sources 


60,299 

65,223 

75,547 

77,384 | 

80,078 

Water management 


18,857 

19,265 

21,713 

22,301 

23,041 

Waste water management 


24,949 

24,865 

27,143 

28,418 

29,838 

Waste management 


14,117 

11,627 

12,555 

13,038 

13,554 

Other 

4 

359 

471 

466 

497 I 

541 

Total Expenditure - Functional 

3 


213,612 

231,228 

246.254 ] 

265.352 

Surplus/(Deficit) for the year 


36,907 

35,904 

25,934 

33,215 

36,339 


13 | Page 



















Table A3 


2018/19 Budget Financial Performance (Revenue & Expenditure 
by Municipal Vote 


NC082 !Kai! Garib - Table A3 Budgeted Financial Performance (revenue and expenditure by municipal vote) 


Vote Description 

Ref 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousand 


Original 

Budget 

Adjusted 

Budget 

Budget Year : 
2018/19 ] 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

Revenue bv Vote 

Vote 1 - OFFICE OF THE MAYOR AND SPEAKER 

1 

3,982 

3,982 

4,185 

4,393 

4,601 

Vote 2 - OFFICE OF THE MUNICIPAL MANAGER 


- 

- 

- j 

- 

- 

Vote 3 - BUDGET AND TREASURY OFFICE 


82,752 

92,190 

98,135 

106,615 

116,224 

Vote 4 - CORPORATE SERVICES 


2,699 

2,182 

1,447 

1,525 

1,609 

Vote 5 - TECHNICAL AND ENGINERING SERVICES 


154,315 

149,900 

131,152 | 

144,301 

155,558 

Vote 6 - PROPERTIES, PLANNING AND DEVELOPMENT_ 


1,666 

1,263 

22,244 

22,635 

23,698 

Total Revenue by Vote 

II 

245,415 

249,517 

257,162 

279,470 


Exoenditure bv Vote to be aonrooriated 

Vote 1 - OFFICE OF THE MAYOR AND SPEAKER 

1 

9,463 

11,748 

11.865 ; 

12,645 

13,490 

Vote 2 - OFFICE OF THE MUNICIPAL MANAGER 


8,306 

8,452 

6,601 | 


7,432 

Vote 3 - BUDGET AND TREASURY OFFICE 


31,118 

30,065 

■9 

Wm 

51,664 

Vote 4 - CORPORATE SERVICES 


27,427 

27,598 

25,742 | 



Vote 5 - TECHNICAL AND ENGINERING SERVICES 


121,995 

124,840 

140,711 

145,156 

150,781 

Vote 6 - PROPERTIES, PLANNING AND DEVELOPMENT 


10,199 

10,910 

11,499 j 

12,189 

12,965 

Total Expenditure by Vote 

m§ 

208 508 

213,612 

231.228 


265.352 

Surplus/(Deficit) for the year 

El 

36,907 

35,904 

25,934 1 

33,215 

36,339 


14 | Page 








































Table A4 


2018/19 Budget Financial Performance (Revenue & 
Expenditure) 


NC082 !Kai! Garib ■ Table A4 Budgeted Financial Performance (revenue and expenditure) 


Description 

Ref 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousand 

1 

Original 

Budget 

Adj usted 
Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

Revenue By Source 







Property rates 

2 

18,355 

20,636 

22,080 

23,273 

24,553 

Service charges - electricity revenue 

2 

72,621 

74,782 

77,113 

81,277 

85,747 

Service charges - water revenue 

2 

19,152 

19,581 

18,404 

19,397 

20,464 

Service charges - sanitation revenue 

2 

10,925 

11,034 

11,564 

12,189 

12,859 

Service charges - refuse revenue 

2 

7,912 

8,070 

8,391 

8,844 

9,331 

Service charges - other 


- 

- 

- 

- 

- 

Rental of facilities and equipment 


229 

60 

69 

73 

77 

Interest earned - ex ternal investments 


169 

95 

28 

30 

31 

Interest earned - outstanding debtors 


9,556 

9,500 

9,397 

10,987 

13,336 

Dividends received 


- 

- 

- 

- 

- 

Fines, penalties and forfeits 


194 

76 

52 

54 

57 

Licences and permits 


1,635 

1,165 

1,405 

1,481 

1,562 

Agency services 


- 

- 

- 

- 

- 

Transfers and subsidies 


68,635 

67,498 

82,250 

88,148 

96,805 

Other revenue 

2 

625 

476 

479 

505 

533 

Gains on disposal of PPE 


- 

- 


- 

- 

Total Revenue (excluding Capital transfers and contributions) 


210,008 

212,974 

231,232 

246,258 

265,356 

Expenditure By Type 







Employee related costs 

2 

95,673 

103,215 

101,837 

108,266 

115,071 

Remuneration of councillors 


6,260 

6,246 

7,009 

7,491 

8,003 

Debt impairment 

3 

16,644 

6,517 

19,217 

17,267 

15,503 

Depreciation & asset impairment 

2 

1,892 

- 

3,166 

8,051 

15,558 

Finance charges 


1,890 

1,248 

1,590 

1,108 

1,134 

Bulk purchases 

2 

49,903 

57,881 

58,656 

61,824 

65,224 

Other materials 

8 

5,956 

8,089 

6,586 

6,942 

7,324 

Contracted services 


14,114 

11,826 

9,940 

10,477 

11,053 

Transfers and subsidies 


- 

- 

- 

- 

- 

Other expenditure 

4, 5 

16,177 

18,592 

23,230 

24,832 

26,485 

Loss on disposal of PPE 


- 

- 

- 

- 

- 

Total Expenditure 


208,508 

213,614 

231,232 

246,258 

265,356 

Surplus/(Deficit) 


1,500 

(640) 

- 

- 

- 

Transfers and subsidies - Capital (monetary allocations) (National 







/ Prov incial and District) 


35,407 

36,544 

25,934 

33,215 

36,339 

Transfers and subsidies - Capital (monetary allocations) (National 
/ Prov incial Departmental Agendes, Households, Non-profit 
Institutions, Private Enterprises, Public Corporatons, Fligher 







Educational Institutions) 

6 

- 

- 

- 

- 

- 

Transfers and subsidies - Capital (in-kind - all) 


- 

- 

- 

- 

- 



36,907 

35,904 

25,934 

33.215 

36,339 

Surplus/(Deficit) after Capital transfers & contributions 







Tax ation 


- 

- 

- 

- 

- 

Surplus/(Deficit) after taxation 


36,907 

35,904 

25,934 

33,215 

36.339 

Attributable to minorities 


- 

- 

- 

- 

- 

Surplus/(Deficit) attributable to municipality 


36,907 

35,904 

25,934 

33,215 

36,339 

Share of surplus/ (deficit) ofassociate 

7 

- 

- 

- 

- 

- 

Surplus/(Deficit) for the year 


36,907 

35,904 

25,934 

33,215 

36,339 


15 | Page 



























Table A5 


2018/19 Capital Expenditure Budget by Vote and Funding 


NC082 !Kai! Garib - Table A5 Budgeted Capital Expenditure by vote, functional classification and funding 


Vote Description 

Ref 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousand 

1 

Original 

Budget 

Adjusted 

Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

Capital expenditure - Vote 







Sinqle-vear expenditure to be appropriated 1 2 

Vote 1 - OFFICE OF THE MAYOR AND SPEAKER 






Vote 2 - OFFICE OF THE MUNICIPAL MANAGER 

- 

- 

- 

- 

- 

Vote 3 - BUDGET AND TREASURY OFFICE 


- 

- 

- 

- 

- 

Vote 4 - CORPORATE SERVICES 


- 

- 

- 

- 

- 

Vote 5 - TECHNICAL AND ENGINERING SERVICES 

35,407 

35,407 

25,934 

33,215 

36,339 

Vote 6 - PROPERTIES, PLANNING AND DEVELOPMI 


- 

- 

- 

- 

Capital single-year expenditure sub-total 


35,407 

35,407 

25,934 

33,215 

36,339 

Total Capital Expenditure - Vote 


35,407 

35,407 

25,934 

33,215 

36,339 

Capital Expenditure - Functional 







Governance and administration 


670 

- 

- 

- 

- 

Executive and council 


500 

- 

- 

- 

- 

Finance and administration 


170 

- 

- 

- 

- 

Internal audit 


- 

- 

- 

- 

- 

Community and public safety 


830 

- 

- 

- 

- 

Community and social services 


830 

- 

- 

- 

- 

Sport and recreation 


- 

- 

- 

- 

- 

Public safety 


- 

- 

- 

- 

- 

Housing 


- 

- 

- 

- 

- 

Health 


- 

- 

- 

- 

- 

Economic and environmental services 


- 

- 

- 

- 

- 

Planning and development 


- 

- 

- 

- 

- 

Road transport 


- 

- 

- 

- 

- 

Environmental protection 


- 

- 

- 

- 

- 

Trading services 


35,407 

35,407 

25,934 

33,215 

36,339 

Energy sources 


7,482 

7,482 

- 

1,920 

1,920 

Water management 


18,625 

18,625 

20,934 

21,295 

22,294 

Waste water management 


9,300 

9,300 

5,000 

10,000 

12,125 

Waste management 


- 

- 

- 

- 

- 

Other 


- 

- 

- 

- 

- 

Total Capital Expenditure - Functional 

3 

36,907 

35,407 

25,934 

33,215 

36,339 

Funded by: 







National Government 


35,407 

35,407 

25,934 

33,215 

36,339 

Provincial Government 


- 

- 

- 

- 

- 

District Municipality 


- 

- 

- 

- 

- 

Other transfers and grants 


- 

- 

- 

- 

- 

Transfers recognised - Capital 

4 

35,407 

35,407 

25,934 

33,215 

36,339 

Public contributions & donations 

5 

- 

- 

- 

- 

- 

Borrowing 

6 

- 

- 

- 

- 

- 

Internally generated funds 


1,500 

- 

- 

- 

- 

Total Capital Funding 

7 

36,907 

35,407 

25,934 

33,215 

36,339 


16 | Page 



























Table A6 2018/19 Budget Financial Position 


NC082 !Kai! Garib - Table A6 Budgeted Financial Position 


Description 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousand 

Original 

Budget 

Adjusted 

Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

ASSETS 

Current assets 






Cash 

2,148 

2,148 

1,607 

1,306 

946 

Call investment deposits 

- 

- 

- 

- 

- 

Consumer debtors 

28,300 

28,300 

52,793 

64,696 

75,435 

Other debtors 

3,846 

3,846 

- 

- 

- 

Current portion oflong-term receivables 

1,100 

1,100 

2,100 

1,890 

1,640 

Invento ry 

748 

748 

987 

1,001 

847 

Total current assets 

36,142 

36,142 

57,487 

68,893 

78,868 

Non current assets 






Long-term receiv ables 

4,258 

4,258 

4,219 

3,988 

3,890 

Investments 

- 

- 

- 

- 

- 

Investment property 

1,550 

1,550 

1,580 

1,620 

1,657 

Investment in Associate 

- 

- 

- 

- 

- 

Property, plantand equipment 

861,983 

860,681 

804,709 

803,940 

791,505 

Agricultural 

- 

- 

- 

- 

- 

Biological 

- 

- 

- 

- 

- 

Intangible 

214 

214 

410 

405 

398 

Other non-current assets 

- 

- 

- 

- 

- 

Total non current assets 

868,005 

866,703 

810,918 

809,953 

797,450 

TOTAL ASSETS 

904,147 

902,845 

868,405 

878,846 

876,318 

LI ABI LITI ES 

Current liabilities 






Bank overdraft 

- 

- 

- 

- 

- 

Borrow ing 

4,287 

4,287 

4,180 

3,990 

3,725 

Consumer deposits 

1,860 

1,860 

1,910 

1,960 

2,005 

Trade and other pay ables 

92,487 

92,487 

219,237 

192,799 

180,395 

Provisions 

6,258 

6,258 

6,387 

6,950 

7,205 

Total current liabilities 

104,892 

104,892 

231,714 

205,699 

193,330 

Non current liabilities 






Borrow ing 

5,872 

5,872 

7,580 

6,958 

6,255 

Provisions 

56,267 

56,267 

77,489 

81,352 

88,772 

Total non current liabilities 

62,139 

62,139 

85,069 

88,310 

95,027 

TOTAL LIABILITIES 

167,032 

167,032 

316,783 

294,008 

288,357 

NETASSETS 

737,116 

735,813 

551,622 

584,838 

587,961 

COMMUNITY WEALTH/EQUITY 






Accumulated Surplus/(Deficit) 

737,116 

735,813 

551,622 

584,838 

587,961 

Reserves 

- 

- 



- 

TOTAL COMMUNITY WEALTH/EQUITY 

737,116 

735,813 

551,622 

584,838 

587,961 


17 | Page 







































Table A7 


2018/19 Budget Cash Flow 


NC082 !Kai! Garib - Table A7 Budgeted Cash Flows 


Description 

Ref 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

R thousand 


Original 

Budget 

Adjusted 

Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

CASH FLOW FROM OPERATING ACTIVITIES 
Receipts 







Property rates 


18,355 

20,636 

22,080 

23,273 

24,553 

Service charges 


110,610 

113,468 

19,955 

21,033 

22,190 

Other revenue 


2,683 

1,777 

2,005 

2,113 

2,230 

Government - operating 

1 

68,635 

67,498 

82,250 

88,148 

96,805 

Government - Capital 

1 

35,407 

36,544 

25,934 

33,215 

36,339 

Interest 


9,725 

9,595 

9,425 

11,017 

13,367 

Dividends 


- 

- 

- 

- 

- 

Payments 







Suppliers and employees 


(204,726) 

(212,366) 

(184,508) 

(195,504) 

(207,208) 

Finance charges 


(1,890) 

(1,248) 

(1,590) 

(1,108) 

(1,134) 

Transfers and Grants 

1 

- 

- 

- 

- 

- 

NET CASH FROM/(USED) OPERATING ACTIVITIES 

38,798 

35,904 

(24,448) 

(17,814) 

(12,859) 

CASH FLOWS FROM INVESTING ACTIVITIES 
Receipts 







Proceeds on disposal of PPE 


- 

- 

- 

- 

- 

Decrease (Increase) in non-current debtors 


- 

- 

- 

- 

- 

Decrease (increase) other non-current receiv ables 

- 

- 

- 

- 

- 

Decrease (increase) in non-current investments 


- 

- 

67 

- 

- 

Payments 







Capital assets 


(36,907) 

- 

- 

- 

- 

NET CASH FROM/(USED) INVESTING ACTIVITIES 

(36,907) 

- 

67 

- 

- 

CASH FLOWS FROM FINANCING ACTIVITIES 
Receipts 







Short term loans 


- 

- 

- 

- 

- 

Borrowing long term/refinancing 


- 

- 

- 

- 

- 

Increase (decrease) in consumer deposits 


- 

- 

- 

- 

- 

Payments 







Repay m ent of borrow ing 


- 

- 

- 

- 

- 

NET CASH FROM/(USED) FINANCING ACTIVITIES 

- 

- 

- 

- 

- 

NET INCREASE/ (DECREASE) IN CASH HELD 


1,891 

35,904 

(24,381) 

(17,814) 

(12,859) 

Cash/cash equivalents atthe year begin: 

2 

- 

- 

6,246 

(18,136) 

(35,950) 

Cash/cash equivalents atthe year end: 

2 

1,891 

35,904 

(18,136) 

(35,950) 

(48,809) 


18 | Page 




















Table A8 2018/19 Budget Cash Backed Reserves 


NC082 !Kai! Garib - Table A8 Cash backed reserves/accumulated surplus reconciliation 


Description 

R thousand 

Ref 

Current Year 2017/18 

2018/19 Medium Term Revenue & 

Expenditure Framework 

Original 

Budget 

Adjusted 

Budget 

Budget Year 

2018/19 

Budget Year 

+1 2019/20 

Budget Year 

+2 2020/21 

Cash and investments available 







Cash/cash equivalents at the year end 

1 

1,891 

35,904 

(18,136) 

(35,950) 

(48,809) 

Other current investments >90days 


257 

(33,756) 

19,743 

37,256 

49,755 

Non current assets - Investments 

1 

- 

- 

- 

- 

- 

Cash and investments available: 


2,148 

2,148 

1,607 

1,306 

946 

Aonlication of cash and investments 







Unspent conditional transfers 


- 

- 

- 

- 

- 

Unspent borrowing 


- 

- 

- 

- 

- 

Statutory requirements 

2 






Other working Capital requirements 

3 

58,547 

58,462 

198,793 

169,582 

154,748 

Other provisions 







Long term investments committed 

4 

- 

- 

- 

- 

- 

Reserves to be backed by cash/investments 

5 






Total Application of cash and investments: 


58,547 

58,462 

198,793 

169,582 

154,748 

Surpi us(shortfall) 


(56,399) 

(56,314) 

(197,186) 

(168,276) 

(153,802) 


Section 5 - Capital Budget Item List 


Planned Project 

Estimated 

Project Costs 

Currieskamp Water 

6,843,850 

Eenduin/Loxtonvale Water 

8,209,192 

7de Laan Water 

1,731,660 

Aalheit Cemetery 

1,994,249 

Kakamas Cemetery 

664,392 

Lutzburg Streets 

5,905,502 

Ward 10: High Mast Lights 

4,830,887 

Keimoes Streets 

5,625,753 

Kakamas Waste Water 

5,000,000 

TOTAL 

40,805,485 


The council of the municipality will still decide which projects the municipality will 
prioritise in the next financial year. 


19 | Page 
































Section 6 - Municipal Manager’s quality 
certification 


I,_, Municipal Manager of 

KAI iGARIB Municipality, hereby certify that the draft 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 draft budget 
and supporting documents are consistent with the Integrated Development Plan of the 
Municipality. 


Municipal Manager of KAI IGARIB Municipality (NC082) 


Signature 


Date 


20 | Page