Her Worship, eThekwini Mayor Zandile Gumede tabled her maiden draft budget for the 2017/18 financial year at the Full Council meeting held on Thursday, 30 March.

The City’s consolidated R45 billion draft budget for the 2017/18 financial is informed by the Municipality’s long-term financial strategy with emphasis on affordability and long-term sustainability focused on alleviating poverty and social imbalances through job creation, youth development and advancing the economy by creating an enabling platform for business to flourish.

And in keeping with the City’s commitment to increase communication and consultation with communities, both political and administrative officials will embark on a public participation process on the budget, Mayor Gumede said.

This will allow for every resident to have the opportunity to scrutinize the budget, engage with officials and provide their input before the budget is finalized. Regional budget hearings will be held during the months of April and May.

Details of these hearings will be published soon.
Mayor Gumede in her address referred to the budget as one that is in keeping with the promises made in her inaugural speech and would drive radical economic transformation as well as fast-track service delivery in the City.

“I am the people’s Mayor and this is people’s budget, everything that we do is for our people who have chosen us to lead this City,” Mayor Gumede said, reminding the audience that this year is a year of deepening unity and the year of celebrating President O.R. Tambo.

She also expressed her deepest condolences to the family and friends of the late stalwart, Ahmed Kathrada. “We respect your contribution in the struggle we will always remember and honour your role in the liberation of our people,” she said. She said the budget has been developed to be balanced, realistic, sustainable, cost reflective, affordable and taking into account the current economic climate.

“We believe that this is a very well balanced budget in terms of addressing the triple threat of poverty, unemployment and inequality while on the other hand also building business confidence in terms of retaining and expanding existing businesses and attracting new investors to help grow our rates base,” said Mayor Gumede.

The 2017/18 draft budget comprises of a capital budget of R7.5 billion and an operational budget of R37.5 billion (increased from R 33.1 billion in 2016/17 financial year) which funds the continued provision of services provided by the Municipality.

The growth of the operating budget is mainly due to the cost of addressing service delivery backlogs, the cost of bulk purchases of water and electricity, repairs and maintenance of infrastructure, impact of capital spending on operating expenditure and employee related costs as a result of filling of vacancies and provision for salary increase.

The main drivers of the operating budget are attributed to:
  • Water Services: R 6.5 billion, increase of R 685 million (11.7%) - Provided to approximately 956 000 consumers via 327 storage facilities, 98 pumps stations and five water purification works.
  • Cleansing and Solid Waste: R 2.1 billion, increase of R 72 million (10.5%) - A refuse removal service is provided once a week to over 956 000 households, both formal and informal. Approximately 81.3 million refuse bags are distributed and over 426 000 tons of refuse is removed annually, creating a healthy and sustainable environment for all.
  • Sanitation: R 1.9 billion, increase of R 152 million (8.4%) - The service relates to the collection and treatment of waste water produced in the city. Approximately 505 000 KL of effluent flows into the treatment works daily.
  • Electricity Service: R 13.4 billion, increase of 1.8 billion (16.9%) - Electricity services are provided to over 752 000 customers within the city and surrounding areas.
  • Engineering Services: R 2.0 billion, increase of 30.4 million (1.6%) - The unit provides engineering, buildings and built environmental infrastructure, surveying and land information services.
  • Community and Emergency Services: R 3.2 billion, increase of R 113 million – For the operation and maintenance of a range of facilities which include 336 soccer fields, 163 community halls, 141 parks, 57 cemeteries, 96 libraries, 16 museums and 52 swimming pools. The unit also maintains 260 000 ha of verges in the municipal area. Provisions in this medium term budget continue to support government’s commitment to address unemployment & create job opportunities. In doing so,
  • 1 250 caretakers are employed at ablution facilities with a further 50 to be employed as further ablution facilities are completed.
  • 943 plumbing contractors are employed on a rotational basis to undertake water related services. Additional plumbers are being considered to improve turnaround time.
  • 366 community based contractors employ about 1 770 people for refuse removal services.
  • 31 graduate engineers are employed under the Water mentorship program.
  • 140 community based contractors are utilized in the roll out of rural water and sanitation projects.
  • 753 people are employed by Durban Solid Waste through the Extended Public Works Programme grant.
  • A further 23 484 work opportunities are expected to be created through the R66.7 million grant subsidized by National Treasury.
  • R93 million has been allocated to the Zibambele Poverty Alleviation programme creating over 6 500 jobs created.
  • R21 million has been allocated to Sihlanvimvelo stream cleaning creating over 500 jobs created.
The capital expenditure is budgeted to rise to R 7.3 billion in 2017/18 and thereafter to R 7.8 billion by 2019/20. Approximately 75% of the capital budget is allocated to meeting infrastructure and household services needs and backlogs over the medium term. R 2.4 billion of this is directed to new housing developments and interim servicing of informal settlements.

The capital budget continues to reflect consistent efforts to address backlogs in basic services and the renewal of the infrastructure of existing network services.

With over 75% of the Municipality’s residents having access to basic services, the Municipality has been a front runner of accelerated delivery for many years and continues to put significant resources and effort into infrastructure delivery in order to eradicate existing backlogs. Despite the significant rollout of basic services, the service delivery backlogs remain huge.

All interventions including catalytic projects to grow our economy, food security programmes, job creation and ensuring that women as well as youth development programmes run in full steam, have all been budgeted for. “We will continue to provide basic services such as grass cutting, verge maintenance, robot repairs, as well as prioritise cleanliness and drive inner city regeneration projects to build a City we can all be proud of,” Mayor Gumede said.

Taking cognisance of the bleak economic climate, austerity measures have been applied in order to address the initial budget deficit and ensure reasonable levels of tariffs with a basket of services with an overall increase of less than 6% which is below inflation and also to confirm to National Treasury cost containment guidelines. However some of the increases have been unavoidable. As with the bulk water tariff increase by the Umgeni Water Board was 15%.

The proposed tariff increases for the 2017/18 financial year are:
Rates is 6.9% on average, an increase of 1.88% for electricity, 15% for domestic water consumers, 17% for business water consumers, 9.9% for refuse removal, and also 9.9% for sanitation.

With the City’s commitment to fast track service delivery and provide basic services our free basic services package, pensioners, child-headed households, disability grantees and the medically boarded are exempt from paying rates on the first R460 000 of their property value. Residential Properties valued up to R 230 000 (previously R 185 000) will be exempt from paying rates. All other properties valued above R 230 000, for the first R 120 000 of value no rates will be charged.

The first 6kl of water is free to households with property values under R250 000.

The first 50kwh of electricity is free to residents using less than 150kwh per month in Eskom reticulated areas. The first 65kwh of electricity is free to residents using less than 150kwh per month in eThekwini reticulated areas.

The first 6kl of effluent disposal is exempt for all properties with values under R250 000. In addition, a free basic service is also available to indigent consumer units with VIP’s, urine diversion toilets and in informal settlements serviced by means of a toilet/ablution block within 200 metres.

Residential property valued up to R250 000 are exempt from the domestic refuse removal tariff. In addition, a free basic refuse removal service is also available to indigent residents living in rural and informal settlements.

Mayor Gumede said the budget will “help uplift the quality of lives of our people, especially the poor, and help us to achieve our vision of becoming the most caring and liveable City in Africa.”

“We believe that we are on the right path as the international Mercer quality of living survey recently named our Municipality the best South African City to live in for a third consecutive year,” she added.


Issued by eThekwini Municipality.