27 March 2018
Executive Committee Decisions
The City’s Executive Committee welcomed Martin Dubbeling Vice President: Urban Planning Advisory Teams from the International Society of City and Regional Planners (Isocarp) at a meeting held today, 27 March.
Dubbeling, who has met with eThekwini Mayor Zandile Gumede, is in the City in preparation for a week-long workshop being held next month. The focus of the workshop will be to generate ideas to help implement the Inner City Master Plan, Spatial Vision and Regeneration Strategy. It is the first time the workshop is being held on African soil.
There will be a team of professionals who will help ferment ideas on how to implement the Inner City Master Plan, Spatial Vision and Regeneration Strategy. This workshop will be held under a programme called the Urban Planning Advisory Council.
Dubbeling was introduced to the core leadership of inner city councillors as per the request of Mayor Gumede.
The upcoming Urban Planning Advisory Team known as the UPAT Workshop is scheduled to take place from 29 April to 5 May and will help the City deliver on the key inner city projects based on the Local Area Plan which has received an international award under the category of Transforming Apartheid City through Planning.
Mayor Gumede welcomed Dubbeling to the meeting saying the partnership between the City and Isocarp was very important.
“The population in the City is growing as a result of urbanisation which means we have a number of challenges because of that. But I believe that by working together we can build a better City,” she said.
Briefly presenting to the Executive Committee, Dubbeling said he is from the Netherlands where Isocarp is based. He said the organisation, which has 800 members in 80 countries, was founded in 1965.
“We bring planners from different countries and cities together to exchange knowledge to build better cities.”
He said the organisation hosts an annual congress which was held in Durban in 2016.
Said Dubbeling: “In my experience the congress hosted in Durban was one of the best congresses ever, the hospitality was great and the content was marvellous.”
He is happy that the City would be hosting the UPAT workshop and said he was in the City to assist.
“The last workshop was held in Norway where the results of the workshops were published in a magazine. Great progress results from the workshop and I am looking forward to it being hosted in Africa for the first time and we hope to hold many more,” he added.
Mayor Gumede applauded the Municipal team involved in the workshop being led by Development Planning, Management and Environment Unit Head Musa Mbhele.
The Executive Committee tabled a report at a meeting today, 27 March which provided an update on the results and outcome of the EThekwini Municipality’s annual credit rating review conducted by Global Credit Rating Agency which is mandated to perform the credit rating service.
The report states that during February 2018 a review of the credit rating was conducted and resulted in an upgrade of the Municipality’s Long-Term National Scale Credit Rating by one notch from AA (ZA) to AA+ (ZA). The Short-Term Credit Rating was retained at A1+ (ZA) with a stable outlook overall.
AA+ (ZA) is a very high credit quality. It means protection figures are very strong. Adverse changes in business, economic or financial conditions would increase investment risk, although not significantly.
A1+ (ZA) has very high certainty of timely payment. Short term liquidity, including operating factors and/or access to alternative sources of funds are high. Risk factors are extremely low relative to others in the same country.
The report said the next credit rating review is due to take place in October 2018 adding that the credit rating upgrade is a good indicator for the Municipality in terms of healthy performance in the current economic climate where South Africa as a country and state owned entities are facing credit rating challenges.
It further stated that the credit rating rationale includes among others:
• The Municipality has a diverse economic base which has helped it to sustain economic growth and job creation above the national performance levels,
• Demonstrated a strong capacity to deliver on projected operating and Capex expenditure and,
• Achieved another unqualified audit during the 2016/17 financial year.
EThekwini Mayor Gumede welcomed the report saying the government of the day was transparent which allowed communities to know exactly what was happening.
“The entire report was brought to us which shows how transparent we are. We do have challenges as I have said before. But we talk about these challenges and are open about it. We do have systems in place to tackle it,” she said.
A report outlining the implementation of the Value Added Tax (VAT) increase from 14 to 15 percent as proposed by National Treasury in the 2018/19 budget by applying VAT at 15 percent to all the tariffs charged by eThekwini Municipality on which VAT is levied at a standard rate was tabled at an Executive Committee meeting today, 27 March.
The report stated that the revising of the tariffs was to ensure compliance with National Treasury regulations.
It stated that the VAT rate will increase from 14 to 15 percent effective 1 April 2018. The VAT rate increase is one of the tax measures taken by National Treasury to raise an additional R36 billion as revenue for the state. The VAT rate was last changed in 1993 when it increased from 10 to 14 percent.
The Budget Office and the Revenue Unit will participate in the process of increasing the VAT rate. The Budget Office will communicate with the relevant units the resolution to revise the VAT rate to 15 percent. The Revenue Unit will assist in posting the notices in the banking halls and to notify customers by including a notice in the eThekwini Metro bills.
The report further stated that following adoption of the report by Council, the Communications Unit will be engaged to publish the notice in relevant newspapers and other media. The notice will also be displayed for a period of at least 30 days at the City Hall and on the Municipality’s official website.
The report notes that the increase in the VAT rate will affect all the standard rate supplies that eThekwini Municipality will make from 1 April. The major standard rates supplies that eThekwini Municipality makes are trading services which is water and sanitation, sewerage, refuse removal and electricity.
The eThekwini Metro Bills for the month of April will be the first bills with the revised tariffs. These bills may include both VAT rates of 14 and 15 percent since the services would have been partly supplied in March with the applicable VAT rate of 14 percent and some services would have been partly supplied in April at the new rate.
The report further noted that tariffs charged by Moses Mabhida Stadium on the attraction services including the sky car and stadium tour will be rounded off as this is in line with its normal practice. The rounding off will be to the nearest lowest rand in order to avoid increasing the tariff and also to ensure compliance with section 28(6) of the Financial Management Act.
The proposed Department of Human Settlements’ Debt Settlement Plan to recover the substantial debt owed by the Department to Council was tabled at an Executive Committee meeting today, 27 March.
The report states that since inception, the project debt on various housing projects undertaken on behalf of the provincial Department of Human Settlements (DOHS) has escalated to R3.9 billion as at 30 June 2017.
The report states that the debt has culminated over several years as a result of R2.52 billion of expenditure being incurred on projects that were in excess of the approved subsidy as well as R1.4 billion of claims being delayed due to unforeseen circumstances.
Although the R2.52 billion of excess expenditure was not covered by the contractual arrangements concluded between the Department and Council, it was however essential and necessary for the completion of the project, the report reads.
It states that the excess expenditure was incurred on the understanding that as this expenditure was in pursuant of the DOHS objectives, they would reimburse Council. In addition, the debt of R246 million is outstanding for remedial measures undertaken on R293 housing project on behalf of the Provincial DOHS.
Several discussions were held with the Provincial and National DOHS as well as with National Treasury with regard to payment of the debt.
The report outlines the proposed DOHS Debt Settlement Plan.
This includes the National DOHS and Treasury setting aside R360 million annually for the next seven years of the Urban Settlement Development Grant (USDG) allocated to eThekwini Municipality for the settlement of the DOHS debt subject to Council utilising R360 million annually of its own funds to augment the capital spend on infrastructure that would otherwise have been funded from the USDG. This is necessary so as not to compromise the anticipated service delivery outcomes of the USDG. The report adds that it should be noted that Council will yield a concomitant infrastructure asset for Council.
Further, it proposes that the National DOHS also set aside R40 million annually for the next six years of the Human Settlement Development grant allocated to eThekwini Municipality for the settlement of the R293 debt.
The report also states that while the proposed debt settlement agreement has neither future financial implications to Council nor budgetary ramifications, it would however improve the credit rating of Council.
Issued by eThekwini Municipality’s Head of Communications, Tozi Mthethwa.
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